Business
Opinion: Native American cannabis businesses spread across United States
Native American tribes throughout the United States are investing in cannabis.
Tribal-owned stores are becoming more common, often as part of vertically integrated businesses, including cultivation, manufacturing and retail.
This story provides a high-level survey of tribal cannabis stores: where they are, what they look like and what the future might hold.
The U.S. government recognizes 574 Native American tribes, approximately 350 of which are located in the contiguous 48 states.
In addition, there are dozens of tribes that are recognized by the state within which their reservation is located but are not currently recognized by the federal government.
Tribal laws might differ
As sovereign nations, tribes often enforce marijuana laws that differ from the state laws applicable off-reservation.
Tribal laws can be more restrictive, banning cannabis use even in states where recreational marijuana has been legalized.
But they can also be more permissive than state laws.
As of January 2023, there were 44 tribal-owned cannabis retailers in eight states.
Four of these stores have opened since April 2022 and more are expected in 2023, demonstrating continued growth in the industry.
Many are located on reservations, but some are on non-tribal land. The map above presents a summary of tribal-owned stores by state.
Thirty-five different tribes own the stores cited in the map.
Nationwide, the average tribal retail outlet footprint is roughly 6,300 square feet, although the size ranges from humble establishments of less than 1,000 square feet to elaborate complexes exceeding 25,000 square feet.
The vast majority of tribal retailers offer recreational cannabis products, but many also offer medical marijuana to cardholding patients.
There are also tribal-owned dispensaries in Minnesota and South Dakota that currently offer only medical marijuana.
Washington state No. 1
Washington state has the most tribal retailers, 19, as well as the most tribes operating stores, 15.
The success of tribal retailers in Washington stems partly from the market’s early legalization and partly from state leaders’ cooperation with tribal governments in the form of compacts: agreements between the state and individual tribal governments that structure how cannabis sales will be regulated and taxed on and off tribal land.
Nevada has the second-highest number of tribal stores with 10, which are owned by eight different tribes.
The remaining stores are in states with legalized recreational marijuana such as California, Michigan, New Mexico and New York as well as in South Dakota and Minnesota, which currently have more restrictive marijuana laws.
The stores in the map above do not include businesses that are owned by a tribal member but not by a tribal government.
There are scores of such tribal-member-owned stores across the country.
In New York, more than 100 stores have been opened by tribal members on tribal land. Most of those businesses are relatively small operations in upstate New York.
In some cases, the businesses are licensed by the tribal government. For example, the Saint Regis Mohawk Tribe Cannabis Control Board has licensed 17 retailers and five cultivation businesses.
In other circumstances, the tribal governments in New York either tolerate unlicensed businesses or actively work to shut them down.
Native American tribes are expected to continue to invest in cannabis and open new stores going forward.
Much of the growth is expected in New York, where state-licensed retailers are opening at a glacial pace.
For example, the Shinnecock Nation is expected to open a store with a lounge (as part of a vertically integrated cannabis operation) on Long Island later this year.
The tribe is also expected to license other stores along the Montauk Highway.
Also in New York, the Seneca Nation and the Oneida Indian Nation are expected to open retail outlets in 2023.
In North Carolina, the Eastern Band of Cherokee Indians are planning to open a medical cannabis dispensary as part of a vertically integrated business later this year.
The state has not yet legalized medical marijuana sales, so the tribal operation would be unique in North Carolina.
Growing importance of cannabis
Those examples clearly show the increasing importance of cannabis to many tribes.
This trend is primarily the result of three forces:
- Acceptance of recreational and medical cannabis is spreading throughout the United States, including among Native American communities. Some tribes have been among the earliest adopters of cannabis-friendly laws.
- Tribes across the country are diversifying their economies. Cannabis can be a profitable investment, generating important funds for tribal governments.
- Some tribes are especially well-positioned to open successful cannabis businesses. They might offer products that are not otherwise available in the state for regulatory reasons, or they might be able to leverage tax advantages. Tribal land might also be located near the border of counties or states where cannabis sales are more restricted or even illegal, making tribal stores the most practical option for consumers in those areas.
The result is a rising number of tribal-owned retail outlets in Indian Country, some of which have experienced enormous success.
As acceptance of marijuana use as a medicine and recreational activity continues to grow, tribes can be expected to continue to invest in cannabis to diversify their economies and safeguard their sovereignty.
Source: https://mjbizdaily.com/native-american-cannabis-businesses-spread-across-united-states/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
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