MITCHELL — After sitting vacant for three years, the former Shopko building on the north side of Mitchell could be welcoming a new business.

According to Mitchell Mayor Bob Everson, the Flandreau Santee Sioux Tribe is planning to transform the large building into a medical marijuana cultivation facility.

Davison County property records show the Flandreau Santee Sioux tribe recently purchased the large building, located at 1900 N Main St., for $1.6 million, marking about a $400,000 decrease from the initial $2 million listing price.

“It’s encouraging to see an entity buy one of our largest vacant buildings that is in a good location,” he said.

Although Everson was informed that the Flandreau-based Native American tribe bought the building to grow marijuana plants, the tribe’s medical marijuana business, known as Native Nations Cannabis, has yet to submit an application for a cultivation and manufacturing license that’s needed to legally grow and distribute cannabis in Mitchell. Native Nations Cannabis is one of the three entities that’s awaiting a decision on its variance request to allow the group to open a dispensary at 1620 S. Burr St. in Mitchell.

Attempts to reach officials with the Flandreau tribe were unsuccessful.

The 71,846-square-foot building housed a Shopko for several decades until the company closed the Mitchell location in 2019 after filing for bankruptcy. Mitchell was among all of South Dakota’s Shopko stores to close in 2019.

Sam Fosness / Republic

With the sizable amount of square footage in the building, Everson said it’s encouraging to see the group purchase it for future use. But Everson has fielded questions and concerns from Mitchell residents concerned about the odor that the marijuana cultivation facility could emit around the area.

Since marijuana plants are known to emit odors, Everson said it’s exactly why the city’s ordinance includes regulations to prohibit odor emissions from becoming noticeable away from the cannabis facilities.

“There are ways to mitigate the odors, and we would have to make sure they do,” he said.

As part of the city’s regulations included in the medical marijuana ordinances, a cannabis establishment shall not allow the emission of any “gas, vapors, odors, smoke, dust, heat, or glare that is noticeable at or beyond the property line of the cannabis establishment.”

While Mitchell’s ordinance prohibits medical marijuana establishments from causing noticeable odor that extends beyond the respective property that’s manufacturing cannabis, the city hasn’t had to enforce regulatory measures involving marijuana odor issues since there has yet to be a manufacturing or cultivation facility to open in Mitchell.

Everson said a group of Mitchell city officials toured the Flandreau tribe’s cultivation and dispensary facility in Flandreau. Everson was informed by some of the city officials who toured the facility that marijuana odor wasn’t noticeable from outside the Flandreau building where the cultivation process takes place.

“I was told you can’t tell there is a smell from outside, but obviously they said you can when you are inside,” Everson said, noting the city’s ordinance doesn’t prohibit odor inside the cultivation facility.

The city’s ordinance also outlines remedies for establishments that are emitting odor that’s noticeable beyond the respective property. The ordinance states that “in the event that any gas, vapors, odors, smoke, dust, heat, or glare or other substances exit a cannabis establishment, the owner of the subject premises and the licensee shall be jointly liable for such conditions and shall be responsible for immediate, full clean-up and correction of such condition.”

If the tribe moves forward on opening a cultivation business, the Mitchell City Council would be the governing body to consider approving the plan. During the application process, the council could address the tribe’s plans to mitigate odors in line with the city’s ordinance.

With Coborn’s grocery store being connected to the old Shopko building, it’s unclear whether marijuana odors could travel into the grocery store that’s connected to the south side of the building.

If the tribe’s plan to open a cannabis cultivation facility at the building materializes, it could be the first marijuana cultivation establishment in Mitchell. As of now, the city has yet to receive any applications for cultivation and manufacturing licenses.

The only medical cannabis licenses that have been issued in Mitchell since the city began accepting applications in October 2021 are for dispensaries – the establishments where medicinal marijuana products are sold to customers.

Cultivation facilities are the establishments that grow the marijuana plants, which are then packaged and distributed to dispensaries. Under federal law, marijuana — whether medicinal or recreational — cannot be transported across state lines. That means Mitchell’s dispensaries must receive its marijuana inventory from a licensed cultivator and manufacturer within South Dakota state lines.

With two dispensaries approved to operate in Mitchell and three tabled due to pending variances, including Native Nations Cannabis’ proposed dispensary, opening a cultivation facility in Mitchell could be a business opportunity for the tribe and other entities. The maximum number of dispensary licenses in Mitchell is capped at five, while there is no cap for cultivation and manufacturing licenses.

Native Nations Cannabis is the only company in the state that has been cultivating marijuana at its Flandreau facility since the state legalized the medical cannabis industry that went into effect in July 2021.

“They have experience in the cultivation side of things, so that’s a good thing,” Everson said.

Everson anticipates more cultivation license applications will come in soon. He pointed to a Missouri-based company, known as BesaMe Wellness, that received a dispensary license in Mitchell as a potential applicant for a cultivation license. BesaMe Wellness’ dispensary will be located at the former Runnings building on Burr Street, which Everson noted is very large and similar in size to the Shopko building.

“With that big of a building, I’m guessing the Missouri group will eventually be looking at cultivation there as well,” he said. “It’s good to see some of our large vacant buildings attract new tenants.”