How California Is Blocking Native Americans From the Weed Business

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Like most folks, the Iipay Nation of Santa Ysabel got into the weed business for the money. The 700-member tribe, situated about 45 minutes east of San Diego, California, was roughly $50 million in debt from a failed casino project when the Obama Department of Justice issued the Wilkinson memo in December of 2014, giving Native-American nations the same leeway that had been given to states like Colorado and Washington. Essentially, the feds said, if you keep marijuana regulated; keep it out of the hands of children and criminals; and keep it out of places where it’s still illegal, we’ll leave you alone.

Impoverished tribes all over the country suddenly had skunky smelling dollar signs in their eyes. Pot entrepreneurs realized that because tribes generally don’t need to pay income taxes, partnering with tribal governments might allow them to get out of paying the whopping federal tax bill necessary for anyone selling a Schedule I drug. Santa Ysabel was approached by over 300 marijuana businesses, and ultimately chose seven to set up cultivation, manufacturing and a testing lab on their land. Investors began predicting that Indian weed was going to be an even bigger business than Indian gaming.

Three years later, the future of tribal cannabis does not look quite so rosy. The DOJ memo has been rescinded by Attorney General Jeff Sessions. The cops have shut down several prominent reservation-based weed businesses, including a planned marijuana resort in South Dakota. And in California, the biggest and most lucrative marijuana market in the world, things aren’t looking great, either. Now that the state has legalized adult-use weed and is licensing pot businesses left and right, it would seem to be the right time for tribal cannabis businesses to be formally recognized by the state – but the government is making it incredibly difficult for tribes to participate in the legal industry.

Under the current regulations, the governing bodies of cities and counties throughout California can determine who will receive the local marijuana business permits, which are required to obtain a state license. But tribes are not being given this same authority. Instead, tribal cannabis businesses can only acquire the licenses that will allow them to work with state-legal operators if the tribe agrees to cede all licensing power to the state. For most tribal leaders, this stipulation was downright insulting, and constituted yet another example of the government asking tribes to give up some of their hard-won sovereignty.

“The state [of California] locked the tribes out of the market, and it’s not fair,” says Utu Utu Gwaitu Paiute chairwoman Tina Braithwaite, whose tribe began growing marijuana in the past few years on their land, close to California’s border with Nevada. “We were here first. These are our nations. They put us out in these remote areas and said, ‘Survive!’ and yet when we try to survive, then they want to suppress us.”

Last fall, as it became clear that California was not going to cooperate with tribes looking to get in on legal weed, Braithwaite teamed up with Santa Ysabel’s cannabis regulatory commissioner, former law enforcement officer Dave Vialpando, to form the California Native American Cannabis Association, or C-NACA. With the support of 19 tribes across the state, C-NACA is now working with legislators to introduce a bill that would give tribes the same authority to determine licensing for local pot operators.

This will be the third year in a row that this kind of legislation has been introduced in the Golden State.

Similar bills have passed in recent years in pot-legal states like Nevada, Oregon and Washington, allowing at least 10 tribes to negotiate deals with state governments and open up marijuana businesses. The Squaxin Island tribe opened Indian Country’s first legal pot shop in November of 2015, about 100 miles southwest of Seattle. On a reservation just off of the Las Vegas Strip, the Nuwu Cannabis Marketplace claims to be the largest marijuana store on the planet. But in California, those close to the situation say that C-NACA’s efforts are being stymied by a combination of influential pot businesses wanting to corner the market, and good old-fashioned racism.

“Tribal cannabis is probably the last big unsettled question in California cannabis policy,” says California Growers Association executive director Hezekiah Allen. “In some of the seedier, single-bottom-line corners of the cannabis community, the theme I’m hearing is, ‘There will be less competition for us if they can’t get licenses.'”

“Tribal cannabis is probably the last big unsettled question in California cannabis policy,” says one expert.

“We have a couple individuals in the cannabis industry that have been telling us they support us but then are going around behind our back and talking bad about the tribes,” Braithwaite says. “I hate to say the words ‘racist’ or ‘discrimination,’ because I don’t like those words and I’m half white, but I feel that real strong.”

Indeed, the idea that tribes are somehow not as capable as California’s cities and counties at determining marijuana business licensing for themselves is downright offensive – especially considering how poorly some cities and counties have handled this process. While some city and county governments have figured out who to license in an ethical fashion, others have used the green-rush bonanza as an opportunity to made back-door deals. In the small desert town of Adelanto, for example, the Mayor Pro Tem is facing federal charges for allegedly accepting a $10,000 bribe in exchange for rezoning land to help a marijuana business get licensed. (He pleaded not guilty, but was removed from office.)

For now, the bumpy rollout of legal marijuana in California has left both Santa Ysabel and Braithwaite’s tribe in a legally ambiguous situation. Licensed marijuana businesses are only supposed to be working with other licensed marijuana businesses, but many thousands of operators remain unlicensed, creating parallel markets: a fully legal market of licensed dispensaries and producers, and a quasi-legal market of unlicensed dispensaries and producers. Santa Ysabel has continued to send its marijuana to the quasi-legal market, while Braithwaite’s tribe, the Utu Utu Gwaitu Paiute, has stopped sending product off-reservation until the situation becomes more legally clear. No one knows when the state is going to begin shutting down unlicensed operators, but the general consensus is that if C-NACA’s legislation does not pass in 2018, the California tribes that are growing and producing cannabis will need to shut their businesses down.

From a jurisdictional standpoint, the issues surrounding cannabis and tribal lands are complicated. When a crime is committed on a reservation, the question of which government will step in can depend on everything from the race of the victim to the severity of the offense. Cannabis lawyers often advise tribes working with weed entrepreneurs to communicate their intentions to every possible interested government official, from the local U.S. attorney down to county supervisors and sheriffs. But even those efforts can prove futile. Tribal marijuana operations that remained in communication with local law enforcement – including the $30 million cultivation and manufacturing site run by the Pinoleville Pomo Nation in Northern California – have also been known to find their plants and equipment abruptly seized.

At the same time, centuries of mistreatment and sidelining by the U.S. government have made tribal communities some of the most economically disadvantaged in the country. Allowing some of California’s 109 tribes to participate in the cannabis industry could provide what Braithwaite describes as “small, broke tribes” an opportunity for economic development that does not depend on luring in tourists to gamble.

“I hate to say the words ‘racist’ or ‘discrimination,'” says one tribal leader. “But I feel that real strong.”

As is the case in many poor communities of color, Native folks are arrested, sentenced and brutalized by the police at rates far beyond those of white people. For other minorities that have been disproportionately affected by the war on drugs, California has been relatively progressive in making amends. Some of the tax dollars from legal weed will go to jobs training in over-policed neighborhoods. A few cities in California, including Oakland, San Francisco and Los Angeles, are implementing so-called “equity” programs in order to give a leg up in licensing to low-income, black and brown entrepreneurs.

However, part of the justification for these programs has been that drug use rates and drug arrest rates between white and black communities are so misaligned. Critics of the movement to bring marijuana businesses to Indian Country often point out that tribes generally struggle with substance abuse at much higher rates than the rest of the population – a troubling factor if you consider marijuana to be a dangerous or addictive drug. A recent study found that 15.3 percent of high school seniors living on reservations reported regular marijuana use, as compared to the national average of 6.6 percent.

Ariel Clark, a cannabis attorney in Los Angeles who initially trained in Indian law and hails from the Grand Traverse Band of the Ottawa tribe, has been serving as a legal advisor to C-NACA. She says that the issue of substance abuse on reservations should not affect the conversation in the California legislature about allowing tribes an equal opportunity to get involved in the legal cannabis business.

“It is for tribal governments and communities to have that conversation,” says Clark. “It is 100 percent not appropriate for that critique to come from outside the community.” After all, many people see cannabis as a healthier, non-toxic replacement for more harmful legal drugs like alcohol and opioids. One tribal leader in Washington State has said that increased availability of marijuana has helped improve the health of his people, and provided a higher quality of life for the elderly. Clark says she is familiar with a tribal health clinic centered around using cannabis to help people who are suffering from alcohol and drug addiction.

Vialpando, the Santa Ysabel cannabis regulatory commissioner and the executive director of C-NACA, says that confusion about how cannabis differs from other drugs created an early obstacle, but that the tribe ultimately came to see marijuana as a promising and worthwhile business.

“There was a huge learning curve in educating our general membership about the health benefits and medical application of cannabis. But now, we’re shipping hundreds of pounds of product to about 50 different dispensaries throughout California,” says Vialpando. “We’ve done everything right, and we’re in total compliance. The longer we’re blocked from entering the legal cannabis market, the more handicapped we’ll be when eligibility finally occurs. Right now, it’s not a level playing field.”

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