Native American tribes that want to participate in Michigan’s fledgling cannabis industry face many bureaucratic hurdles.
While the federal government has largely taken a hands-off approach to the states that have legalized cannabis for medical and recreational use, the same cannot be said in Indian country.
Attorney Tanya Gibbs, a partner at Rosette LLP in Grand Rapids, said tribes that have identified economic opportunities with cannabis have expressed “dissatisfaction” with that “unfortunate reality.” Many tribes have started to ramp up their lobbying efforts at both the federal and state levels to ensure tribes have the ability to get involved in cannabis without fear of reprisals, she said.
“In Michigan, any old white guy can open up a cannabis store and make a bunch of money, why can’t we?” Gibbs said of the discussions happening in Indian country in Michigan and other states that have legalized cannabis.
Federally recognized tribes operate as sovereign nations, meaning that activities occurring on land held in trust for the tribes are subject to federal law, which currently considers cannabis a controlled substance. As such, tribes face a “huge risk” in operating marijuana-based businesses on trust lands, Gibbs said.
“Many of the tribes in Michigan are still heavily reliant upon federal grant money,” she said. “Those grant dollars come with certain restrictions and ties and requirements. That poses a problem for some of the tribes who are considering the (cannabis) business. How do we do this in the right way without risking those federal dollars that provide real services to our people?”
However, operating businesses on “fee land,” properties owned by the tribes or tribal members that are not held in trust by the federal government, poses less risk because they fall under state legal jurisdiction, she added.
Even so, Grand Rapids-based Waséyabek Development Co. LLC, the non-gaming economic development arm of the Nottawaseppi Huron Band of the Potawatomi, has opted to avoid cannabis-related businesses entirely in a move to protect its access to federal contracting.
“It is our opinion that until State and Federal laws agree, cannabis-related businesses are unproven and speculative,” Waséyabek President and CEO Deidra Mitchell told MiBiz via email, noting the industry “doesn’t match our risk tolerance.”
The investment strategy for Dowagiac-based Mno-Bmadsen, the non-gaming arm of the Pokagon Band of Potawatomi Indians, “does not address these types of investments directly,” said President and CEO Troy Clay. However, Mno-Bmadsen is monitoring cannabis and other “market trends” for investment opportunities.
Kurtis Trevan, CEO of Grand Rapids-based Gun Lake Investments, the Match-e-be-nash-she-wish Band of Pottawatomi Indians’ economic development organization, declined to comment for this report.
Tribes that want to get involved in cannabis-related businesses could look to the state of Washington for a possible roadmap. Tribes in Washington, where cannabis is legal for medical and recreational use, formed a compact with the state to define jurisdictions around marijuana on reservations, an agreement similar to how Michigan tribes work with the state for tribal gaming.
“We’ve had a lot of success with the tribal-state tax agreements defining some of those jurisdictional issues and also providing a pathway for economic development,” said Gibbs, the attorney at Rosette. “I don’t know if anyone will come to a compact, but certainly I don’t think that’s out of the question.”
To date, only the Brimley-based Bay Mills Indian Community in the Upper Peninsula has legalized recreational marijuana in a policy mirroring state law.
Gibbs, who serves on the board of directors for Odawa Economic Development Management Inc., the non-gaming business arm of the Little Traverse Bay Band of Odawa Indians, said she knows of other tribes around the state that are considering similar changes.
“Every tribe is just so different in how they view it,” she said of cannabis, noting tribes seem to be more accepting of medicinal uses of the plant, including cannabidiol (CBD), or hemp production. “Some tried to look at it as a vice: ‘Why do we want marijuana within our jurisdiction and why do we want to expose our people or encourage our people to do that kind of thing?’ Others who look at it say, ‘Well, we own a casino and we sell alcohol, so what’s the difference?’”