26 April 2016

Most Tribes Hit the Brakes on Marijuana; a Few Move Aheadwrites article author John Schroyer

The anticipated “green rush” on Native American lands has failed to materialize, contrary to earlier signs that dozens of tribes were poised to capitalize on the opportunity to grow and sell cannabis.

The turnaround has dampened, for now, the opportunity for entrepreneurs in states without legalized medical or recreational cannabis.

It also has quashed opportunities for ancillary businesses to target a new crop of retail stores/dispensaries, cultivation sites and infused products companies.

The change in tack follows raids by local and federal law enforcement on existing tribal cultivation operations, as well as one tribe’s decision to scrap a recreational marijuana resort. The handful of tribes moving forward in the business are taking a go-slow approach, which so far has succeeded.

“The lesson we’ve learned from the last year is to be cautious, deliberate, no pie-in-the-sky,” said Lael Echo-Hawk, a Washington DC-based attorney and general counsel for the National Indian Cannabis Coalition. “For a lot of tribes, it is just wait and see.”

Raids Quell Initial Enthusiasm

Hopes for a Native American cannabis industry were fanned in 2014, after the U.S. Department of Justice issued a memo that seemed to grant tribes the go-ahead to grow and sell marijuana as long as certain guidelines are followed.

The decision unleashed a rush of marijuana-related companies that sought to persuade Native American tribes to sign on with them to begin growing and selling cannabis.

Moreover, many observers speculated that tribes could enjoy a major advantage over traditional cannabis companies, because they aren’t required to pay federal taxes and could conceivably undercut competing retailers on price.

But much of that has failed to come to pass.

Instead, tribes that tried to jump at the chance of a quick marijuana-related buck were cut off at the knees over the past 18 months.

Three developments suggested a go-slow approach would be more prudent:

  • Last September, local law enforcement raided a high-profile Native American cultivation operation in California.
  • In October, federal agents raided the Menominee Indian Reservation in Wisconsin, alleging the tribe was growing marijuana. The tribe maintains it was growing hemp legally.
  • In November, the Flandreau Santee Sioux in South Dakota cancelled plans for a recreational marijuana resort next to its existing casino, and instead burned its cannabis crop before it could sell a single gram.

By contrast, tribes that moved slowly and cautiously have succeeded in setting up cannabis ventures.

That includes the Squaxin Island Tribe in Washington State, which opened the first-ever Native American recreational cannabis shop on its reservation last November, southwest of Seattle.

Read the rest of the article at  http://mjbizdaily.com/most-tribes-hitting-the-brakes-on-mj-but-some-moving-ahead/