I have seen:
How to fix "Run Configuration Error: [No Rails found in SDK]"?
RubyMine kept telling me [No Rails found in SDK]
No rails found in sdk intellij
Build #RM-162.1812.23, built on September 5, 2016
JRE: 1.8.0_112-release-b343 x86_64
JVM: OpenJDK 64-Bit Server VM by JetBrains s.r.o
MacOs 10.12.1 (16B2555)
gem update --system
gem install rails
If you haven't, update your X-code installation by running:
then rebuild all your gems by running:
gem pristine --all
Updating to sierra messes up with your dev environment. The above worked for me.