Sioux Falls Mayor Paul TenHaken is proposing to cap the number of medical marijuana dispensaries in Sioux Falls at five, saying the limit “provides us an opportunity to learn from and react to the impacts that medical cannabis will have on our community.”

The limit comes as part of the city’s proposed medical cannabis licensing ordinance, which will go before the Sioux Falls City Council for a first vote at their Aug. 17 meeting.

Licenses would be placed into a lottery system once received by the city to determine the order in which they would be considered.

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The ordinance sets the initial license fee at $100,000, which would be refunded if an application was denied. An initial license would cover the rest of the calendar year during which the license was issued, as well as the following year.