Most dispensary operators plan for the license. They plan for the inventory. They plan for the buildout.
Few plan for the reality of operating in a market where the rules are still being written — where your construction contractor charges a premium because you're working with a Schedule I substance, where your biggest competitor set their own patient card price at $50, and where the state pulled recreational cannabis away from operators after voters already approved it.
That's South Dakota. And Cameron Young, co-founder of East River Farms Dispensary in Sioux Falls, has been operating inside that reality since the beginning.
In the new episode of The Green Margin Podcast, Cameron broke down the financial and operational decisions that shaped East River Farms' early trajectory — and the ones that continue to drive growth in a market with roughly 20,000 registered patients and significant untapped potential.
Here's what cannabis operators in any emerging market can extract from that conversation.
The "Green Tax" Is Real — and It Starts Before You Sign a Lease
When East River Farms went to bid out their dispensary buildout, the initial construction estimates came in between $200,000 and $250,000. Cameron didn't have that capital available in the early launch phase, and even if he had, he recognized the numbers were inflated.
"We got some construction bids early on that were $200, $250,000. And we didn't have that type of money to play with early on trying to launch this thing." — Cameron Young
This is what operators in cannabis refer to as the "green tax" — the systematic price inflation that vendors, contractors, and commercial landlords apply the moment they learn a project involves cannabis. It's not illegal. It's not even unusual. It's the market responding to perceived risk and limited competition for cannabis-compliant work.
The defense is straightforward but requires discipline: get three to four competitive bids on every major project before committing. Cameron's team paired competitive bidding with significant sweat equity — doing non-licensed work themselves to keep total buildout costs well below those initial quotes. That capital discipline in year one preserved runway that most operators spend before they hit their first profitable month.
The green tax extends beyond construction. It shows up in commercial lease negotiations, security system contracts, point-of-sale vendor pricing, and yes — accounting and professional services. Cameron interviewed multiple CPAs before selecting a cannabis-specialized accounting firm that understood both the compliance requirements and the cost sensitivity of an early-stage operator.
Competing Against Tribal Dispensaries: The $50 vs. $225 Problem
South Dakota was among the first states to pass both medical and recreational cannabis simultaneously at the ballot — but the state legislature subsequently blocked recreational implementation, leaving operators with only the medical program. That regulatory whipsaw was difficult enough. Layered on top was a competitive dynamic unique to states with tribal sovereignty: dispensaries operating under their own regulatory framework, outside state rules, and with structural cost advantages.
When East River Farms opened, tribal dispensaries had already been serving patients. More critically, the path to becoming a patient at a tribal location was dramatically cheaper — approximately $50 per card at one point, compared to roughly $225 for a state-regulated medical card.
"We had to be the forefront of not only education, but dealing with misconceptions of what the tribe was doing with all their initial action with the patient, because they had a huge head start in the state." — Cameron Young
East River Farms couldn't compete on the card cost. They couldn't compete on price alone against operators with their own cultivation infrastructure. So they competed on something more durable: patient experience and pricing transparency.
Three tactics drove patient acquisition:
First, education. Many incoming patients were transitioning from informal or black-market sources and had no framework for navigating a regulated dispensary. East River Farms' bud tenders were trained to walk new patients through the full experience — explaining how loyalty points work, how discounts stack, how ordering works — reducing friction and building trust in a single visit.
Second, passing vendor savings directly to patients. When East River Farms negotiated better pricing with a cultivator or manufacturer, that margin compression went to the patient through lower prices, not to the P&L. In a small state with limited cultivators and manufacturers, patients noticed the price differences between dispensaries quickly.
Third, structured discount programs. Weekly and daily discounts, combined with a loyalty program, gave patients a tangible reason to choose East River Farms over the tribal locations. "I can't tell you how discounts, you know, kind of maybe stole some of that market share from the tribal nation," Cameron said.
Multi-Hat Operations: The Real Day-to-Day of an Early-Stage Operator
Before East River Farms had the revenue to build a finance team, Cameron was running dispensary operations, managing vendor negotiations, handling accounting functions, and coordinating with partners — simultaneously. He described his management style with a sports analogy: "You have to go from being willing to be a coach to referee to a player, depending on who you're talking to."
One decision Cameron identified as critical to early success: engaging a cannabis-specialized accounting firm before the dispensary opened, not after. "When we met, we met in kind of like the maybe construction phase... I was like, no, you need to get this money that you spend and organize and know where your dollars are going."
Getting organized pre-opening allowed East River Farms to track every dollar and every gram from day one. For a medical cannabis operator, inventory tracking accuracy isn't just operational — it's a compliance requirement with direct audit exposure. Starting organized is categorically different from trying to reconstruct records after the fact.
The 3-Partner Structure: Why It Worked
East River Farms operates with three partners. Cameron was direct about why that structure contributed to early success: in a business where bank financing is largely unavailable to cannabis operators and every major decision carries financial and regulatory consequence, having partners to pressure-test decisions reduces costly unilateral mistakes.
All three partners came from real estate backgrounds, which built a shared intuition for lease negotiation, vendor pricing, and capital allocation. The partnership structure also solved the capital problem that stops most emerging market operators before they start — cannabis operators largely cannot access traditional bank financing, making investors or partners a necessity rather than a preference.
South Dakota's Market Ceiling — and the Minnesota Threat
Four years in, East River Farms operates in a city of approximately 200,000 people as one of only five dispensaries. The entire South Dakota medical cannabis program has roughly 20,000 registered patients — a number Cameron believes is 50–75% below where it should be, with less than 10% of patients under age 24.
That underpenetration represents real growth potential. But it also creates urgency around a threat that's already materialized: Minnesota recreational cannabis.
A South Dakota cannabis patient is approximately 45 minutes from a Minnesota dispensary where they can purchase up to 2 ounces per day. South Dakota's medical program limits patients to 3 ounces every two weeks.
"South Dakota is going to see a lot of our tax dollars, you know, go there." — Cameron Young
The long-term solution requires advocacy: working with state lawmakers to reactivate recreational cannabis, which South Dakota voters originally approved. In the near term, the playbook is the same one that beat the tribal competition — education, pricing transparency, loyalty, and patient relationships that don't replicate in a drive-by purchase at a neighboring state's retail location.
The Single Most Important Thing Before Opening
When asked what operators don't realize until they're already in it, Cameron's answer wasn't about product selection, real estate, or licensing strategy.
It was about financial infrastructure: "Knowing where your money is at, having a good team, having regular meetings, and just being a little bit organized goes a long way. You never want to get into a situation where you don't have the sales tax dollars, you don't have the federal tax dollars."
In cannabis, that risk is amplified. The combination of 280E disallowances, state excise taxes, sales tax obligations, and the absence of banking normalization means that an operator who isn't tracking cash flows with precision can be technically profitable and simultaneously unable to meet their tax obligations.
Cameron specifically called out GreenGrowth CPAs' break-even reporting as one of the slides he relies on most: "What needs to be done on day to day just to simply be in the green."
If you're opening a dispensary in an emerging market — South Dakota, Ohio, Minnesota, Delaware, or anywhere else — the time to get that financial infrastructure in place is before you open, not after your first audit notice.
This content is for informational and educational purposes only and does not constitute legal, tax, financial, or investment advice. Cannabis laws and regulations vary by state and are subject to change. Consult a licensed attorney, CPA, or financial advisor for guidance specific to your situation.
— Daniel Sabet, CFO Manager, GreenGrowth CPAsReady to build your dispensary's financial infrastructure before you open? Book a strategy call: https://meetings.hubspot.com/daniel833/blogs
