South Dakota’s medical cannabis industry continues to contract, extending a multi-year decline in licensed establishments. Official Department of Health figures show the total number of certified establishments fell from 118 in FY 2025 to 105 as of the July 14, 2026, public list—a decline of 11.0%, from 118 establishments to 105.¹ Measured from the SFY 2023 peak of 139 establishments, the reduction totals roughly 24.5%.
South Dakota Numbers
– SFY 2023: 139 total establishments (79 dispensaries)
– SFY 2024: 124 total establishments (68 dispensaries)
– FY 2025: 118 total establishments
– July 2026 (current): 105 total establishments (60 dispensaries)
Breakdown as of July 14, 2026:
– 60 dispensaries
– 30 cultivation facilities
– 14 manufacturers
– 1 testing facility²
The Department has not published a detailed list of which specific licenses were surrendered, not renewed, or otherwise removed between the FY 2025 total and the mid-2026 count. Earlier reporting documented a wave of at least eight dispensary closures in late 2024 and early 2025 following the failure of recreational legalization.³
Despite the decline in licensed businesses, registered patient participation has continued to recover. The Department reported 19,383 approved patient cards in early July 2026, suggesting that patient demand has remained relatively resilient even as the number of operating establishments has declined.⁴ The divergence between increasing patient participation and declining business counts suggests the market may be consolidating, with fewer operators serving a growing share of registered patients. Rising patient enrollment does not necessarily translate into additional dispensary demand when existing operators can serve the market more efficiently. As markets mature, excess retail capacity often contracts even while patient participation stabilizes or grows.
National Context
National licensing data likewise show active cannabis business licenses declining for seven consecutive quarters through the first quarter of 2026.⁵ Over the past two years, the total number of active U.S. cannabis licenses fell approximately 9%. Full-year 2025 saw a roughly 4% reduction.⁶
Some mature markets experienced steeper contractions. Oklahoma recorded declines approaching 22% in recent periods; Colorado roughly 10%; and both Michigan and California approximately 8% in recent quarterly data.⁷
Industry analysts attribute the national decline primarily to chronic oversupply, sustained price compression, elevated operating costs and taxes, and the exit of smaller operators as multi-state companies consolidate or restructure.⁸ U.S. cannabis sales dollars declined year-over-year for the first time on record in 2025, even as unit volumes in many markets remained stable or increased.⁹
Assessment
South Dakota’s reduction sits on the higher side of the national range but follows the same underlying pattern visible across both medical-only and mature adult-use markets. The state’s smaller overall market size, limited patient base relative to the number of early licenses issued, and the absence of adult-use sales have likely increased competitive pressure on smaller operators.
South Dakota’s experience mirrors a pattern seen across many newer cannabis markets. Initial licensing periods often produce more businesses than the long-term market can support. Over time, weaker operators exit through nonrenewal, consolidation, or closure while patient participation stabilizes. Whether South Dakota has reached a sustainable market equilibrium—or whether additional consolidation remains ahead—will become clearer as the Department releases future licensing and patient data.
The official SFY 2026 annual report, which will provide year-end totals and additional detail, has not yet been released. Historical release patterns place that report in late 2026.
Footnotes
¹ South Dakota Department of Health, Medical Cannabis Establishments List (updated July 14, 2026); South Dakota Department of Health, 2025 Annual Report (noting 118 establishments in FY25).
² South Dakota Department of Health, Medical Cannabis Establishments List (updated July 14, 2026).
³ South Dakota Searchlight, “Medical dispensaries are closing after SD’s rejection of recreational marijuana” (Dec. 27, 2024).
⁴ South Dakota Department of Health, Medical Cannabis Data (July 6, 2026 update).
⁵ CRB Monitor, Q1 2026 Cannabis Business Licensing Activity (2026).
⁶ CRB Monitor, 2025 U.S. & Canadian Cannabis Business Licensing Activity (2026); CRB Monitor, Q1 2026 data.
⁷ CRB Monitor licensing reports (2025–2026) summarizing state-level changes in Oklahoma, Colorado, Michigan, and California.
⁸ MJBizDaily, “The cannabis industry is having a price compression crisis” (July 27, 2026); Whitney Economics / industry analyses on oversupply and consolidation (2025–2026).
⁹ MJBizDaily / MJBiz Factbook data on 2025 U.S. cannabis sales (reported July 2026).
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