Updated 11:40 a.m. Jan. 9

SIOUX FALLS (AP) – Gov. Kristi Noem is relenting on blocking South Dakota's development of a hemp industry, provided the proposed law meets “guardrails” she has laid out to lawmakers.

Noem announced on Thursday that she still doesn't think hemp is "a good idea” but would not veto a hemp bill passed by the Legislature if it meets her requirements. She wants the crop to be tightly regulated and for legislators to come up with a way to pay for the hemp program. Noem first detailed her shift in an interview with KELO.

House Majority Leader Lee Qualm, R-Platte, said lawmakers already have a draft of the bill and planned to introduce it early in the legislative session that starts next week. He said the bill already meets most of the requirements laid out by Noem.

The bill would allow people to grow hemp if they have a minimum plot size of 5 acres and keep the THC level of the plant below 0.3%. THC is the compound that produces a high in marijuana. It would also allow hemp to be processed into CBD oil and other products. Producers would need to obtain a license from the state and a permit to transport it.

Qualm said the current version of the bill contains an emergency clause that would make it go into effect in March so that farmers could begin planting hemp seeds in the spring. But Qualm was not sure if that provision will survive. South Dakota would still need to get its hemp plans approved by the Department of Agriculture, which might not give farmers enough time to to take advantage of this year's hemp season.

Noem's office estimated it would cost about $1.9 million to start the program and another $1.6 million to run it. She also wants law enforcement to have the ability to inspect and search hemp fields and facilities.

The governor used her veto power last session to block a hemp bill from becoming law and had previously said she would do so again this year. She argued that legalizing hemp would lead to the legalization of marijuana.

On Thursday, the governor said, “things have changed."

In the last year, the Department of Agriculture released guidelines for industrial hemp, but Noem's veto kept South Dakota as just one of three states that did not allow it. Several Indian tribes in the state have also submitted hemp plans to the USDA for approval, and the Flandreau Santee Sioux Tribe has gained approval to grow hemp. The governor also acknowledged that the state had to allow hemp to be transported across state lines.

A statement from Noem's office released Thursday said:

“Over the last year, we’ve had a long conversation about legalizing hemp, and everyone knows that I don’t think it’s a good idea.

“Last year, I vetoed a bill that didn’t address concerns surrounding public safety, law enforcement, or funding. I asked the legislature to wait until we had direction from the federal government and a plan to address those concerns. Now since that time, things have changed. Federal guidelines have been put in place, a South Dakota tribe has been given the green light on production, and other states’ actions mean we need to address hemp transportation through our state. The legislative summer study also did great work, and they included some good ideas.

“Today, I am outlining for the legislature a path forward – four guardrails, if you will – on hemp. These include: 1) reliable enforcement standards; 2) responsible regulations regarding licensing, reporting, and inspections; 3) an appropriate plan for safe transportation; and 4) an adequate funding plan.

“Given all that we need to accomplish this session, if we can get this done in the coming weeks, it would be a good way to kick off this year’s legislative session.”

Click here to download Governor Noem’s Four Guardrails on decriminalizing industrial hemp.

Click here to download cost estimates associated with decriminalizing industrial hemp.​