As the cannabis industry grows and evolves, issues that deserve attention keep emerging—including the often-overlooked impact the state’s cannabis rules have had on Native American tribes.
After voters passed Proposition 64 in 2016, the state developed a hefty set of regulations and enforcement mechanisms to allow cities and counties to permit the commercial cannabis supply chain, starting in 2018. Five cities in the Coachella Valley, as well as Riverside County, currently allow some sort of commercial cannabis activity, and they are benefitting from special taxes and new jobs. However, nearly two-thirds of California municipalities have chosen to keep the industry out.
One problem: The state’s regulatory scheme left out tribal lands, as cities and counties have no jurisdiction in these areas.
As sovereign nations, tribes are able to regulate, grow and sell cannabis on reservation lands. However, to sell products off-reservation and become part of the state’s legal supply chain, tribal operators need a state license—but in order to get those licenses, the state is forcing tribes to sign partial waivers of sovereign immunity that would give state agencies, like the Bureau of Cannabis Control and California Department of Food and Agriculture, complete regulatory control on tribal lands. That doesn’t sit too well with the tribes.
“The state has locked us out of the supply chain and wants us to give up civil jurisdiction, in addition to waiving sovereign immunity, and that’s not fair,” said Tina Braithwaite, the founder of Sovereign Nations Cannabis Consulting, and a former tribal chairperson of the Benton Paiute Tribe.
Braithwaite said there is an assumption that the tribes don’t have the capacity to self-regulate—an all-too-familiar attitude that invokes many of years of oppression and marginalization.
Tribes have traditionally been forced onto marginal lands in rural areas, where economic opportunities are often few and far between. According to a study done by the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis in April 2020, more than a quarter of the Native American workforce (26.3 percent) was unemployed, the highest rate of any ethnic group. Additionally, the challenges of life on reservations sometimes result in substance abuse and mental-health challenges. Cannabis businesses could offer tribes a way to create new economic opportunities.
To complicate matters, many tribes have made a conscious choice not to enter the cannabis marketplace—because tribal authority is subject to limitations imposed by federal law, and cannabis remains illegal under federal law, meaning tribes could face a risk of potential federal censure and prosecution if they entered the cannabis industry. Tribes with gaming licenses face further risks, since the federal government passed the Indian Gaming Regulatory Act in 1988.
In addition, Braithwaite said some tribal elders are reluctant to allow cannabis activity based on past trauma they have experienced, as well as long-held stigmas regarding cannabis.
Just one tribe, Elk Valley Rancheria, has thus far gotten a California state license for cannabis, through a complicated agreement with Del Norte County in 2019 that does not require the tribe to give up civil jurisdiction. This agreement has not been reproduced in any other county. Statewide, there are 110 recognized tribes, and according to Braithwaite, only seven have entered the cannabis marketplace in any way.
However, Braithwaite said that over time, she’s confident that tribes will be able to create their own beneficial cannabis-business ecosystem. As sovereign nations, tribes have exclusive power over members and territory. They can create their own laws and do business with other tribal nations in California. They have the expertise to create their own regulatory structures and oversight mechanisms that could meet or exceed state standards. Indeed, many have already created cannabis commissions and issued their own licenses, complete with robust operating standards, security practices and inspection regimens. Oh, and one more thing: None of the income on tribal lands, including retail sales to California residents, is subject to state taxes. That means the products could be less expensive than those from the state’s regulated supply chain.
Kate Anderson, the director of public relations for the Agua Caliente Band of Cahuilla Indians, did not respond to a request for comment.
Tribal leaders and advocates point to neighboring states as examples of how California could create a successful regulatory partnership with tribes. Washington, Oregon and Nevada have all passed legislation that empowers them to sign individual compacts with each tribe, allowing for the sharing of regulatory responsibilities. However, it’s unclear whether those systems used by other states can work here, because the strict criteria laid out for legal business under Prop 64—which cover everything from water usage to labor agreements—offer little wiggle room.
What will the future bring? That depends—although federal legalization would certainly help cannabis become a normal part of life on tribal lands.