February 8, 2019 11:48 am

CA’s Tribal Nations Are Shut Out of The Legal Cannabis Industry

Unless they give up their sovereignty, native tribes of California are excluded from participating in the regulated cannabis market. How does this fit into California’s “social equity” program?

The former tribal hall for the Iipay Nation of Santa Ysabel is disintegrating; its stucco walls sloughing off like the skin of diamondback rattlesnakes, a slithering native to these rolling hills in rural San Diego County. The decay is a stark contrast to the Native American tribe’s economic development venture two miles down the highway: a state-of-the-art cannabis cultivation and manufacturing campus. The facility sits atop a chapparal-covered hill, overlooking a pastoral valley with grazing cattle and farmland plowed into neat rows. The hub of the tightly secured compound is the former casino building, now the home of cannabis industry tenants and the Mountain Source dispensary the tribe opened last week.

Like many other Native American communities, the tribe at Santa Ysabel hoped to create jobs and a source of revenue through gaming. But when the gamblers didn’t come, opting instead for larger, flashier casinos closer to metro San Diego, the tribal community was left with 50 million dollars of debt and an empty building. Santa Ysabel then turned to cannabis as a solution to its financial woes. With the guidance of the 2014 Wilkinson memorandum from the Obama administration, the tribe drafted California’s first comprehensive cannabis regulations the following year. The tribe transformed its vacant casino, already bristling with robust security, into a cannabis business park.

Ten tenants were chosen from 300 applicants vying to locate their operations on the reservation. Advanced greenhouses utilizing a mix of sunlight and high-tech lighting were erected at tenant expense and manufacturing equipment was installed. Besides cultivation and production companies, an organic waste processor was selected to transform cannabis waste into marketable products. The tenants pay rent and the tribe assesses a tax on any cannabis products that leave the reservation. Proceeds from the enterprise are used to pay down the debt on the failed casino and fund tribal infrastructure projects.

The cannabis producers at Santa Ysabel were supplying medical dispensaries operating in the state’s grey marijuana market. But Prop. 64 requires everyone in the market to obtain a license from the state. Native American tribes and their non-tribal tenants are being denied the opportunity to obtain licenses, however, and are thus prohibited from participating in California’s cannabis economy.


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