Cannabis On Native American Lands: Lessons From the Pit River Raid

You do not want the FBI at your door. Follow these four rules to improve your odds.
You do not want the FBI at your door. Follow these four rules to improve your odds.

Last week, government authorities raided a cannabis cultivation operation on the Pit River reservation. According to a press release issued by the U.S Attorney’s Office for the Eastern District of California, agents from the Federal Bureau of Investigation, Bureau of Indian Affairs, Drug Enforcement Agency, and the California Highway Patrol, executed a search warrant on a pair of grow operations on Pit River tribal lands located in northeast California.

The Pit River Raid came despite the Department of Justice’s recent guidance clarifying the applicability of the Cole Memorandum to tribes. In the Wilkinson Memo, the DOJ expressed its intent to treat tribes no differently than states for purposes of enforcing federal controlled substances law (for more background on the Wilkinson memo, check out Tribes And Cannabis: This Will be Big). This raid was the most high-profile federal raid on a tribal cannabis operation since the Wilkinson Memo was issued last year.

In a somewhat unusual move, the federal government unsealed a 28-page affidavit that the Bureau of Indian Affairs used to obtain and execute the search warrants, revealing extensive details about the character of the reservations cannabis operations. Though we want to be clear that the government has not proven any of its alleged facts, the affidavit still provides examples of what NOT to do if you are looking to grow or sell cannabis on tribal land. If you are a tribe looking to get into the cannabis industry, you should do the following four things, at minimum.

  1. Make sure everyone (or nearly everyone) is on the same page.

The Wilkinson Memo mandates that tribes looking to get into cannabis first consult with proper federal aw enforcement officials before beginning operation. Certain tribes may also have to also consult with state officials, depending on whether the state in which it is located can exercise criminal jurisdiction on tribal lands.

In the Pit River case, the principals, to their credit, did appear to have had these meetings, but it seems that they didn’t go very well and the tribe never received any approvals from the Feds. The government alleges that the tribe’s principals were specifically advised by the U.S. Attorney’s Office that the tribe’s plan for cannabis would violate federal law and could lead to a criminal enforcement action. Though it is not likely that any tribe will get anything in writing from the Feds stating the opposite, it should have been a red flag. It is also alleged that the principals met with county officials to discuss its cultivation plan after they already began operating.

Even if you get all outside law enforcement on board, it’s still necessary to build intra-tribe consensus on whether to grow and/or sell cannabis. It appears that the principals involved in this case did not have approval from the Pit River tribe and a number of tribe members contacted the feds to get them to shut the operation down. Though it is unlikely that any tribe could reach total consensus on whether to grow and how to regulate cannabis, some general consensus is necessary.

  1. Vet your partners. 

It should go without saying that it is a bad idea to do business with shady people, especially in an industry like cannabis that draws heightened scrutiny from regulators and law enforcement. According to the government allegations, the operation’s primary financier has a cigarette company current targeted in multiple lawsuits for unpaid taxes to the IRS. Vetting potential partners’ civil and criminal histories early can save a lot of headaches later on. For ancillary companies looking to contract with tribal cannabis operations, you should make sure that you are dealing with tribal representatives authorized to act on the tribe’s behalf.

  1. Use proper traceability software.

Seed-to-sale software is an important tool in preventing product diversion and it gives regulators easy oversight by allowing them access to real-time data about the operation. The government is alleging that the Pit River operators posted pieces of paper on the doors of each greenhouse and prepared only very generic shipping manifests for distribution. In the modern cannabis industry, papers and pencils have been replaced with RFID tags and barcode scanners and a proper traceability system reduces enforcement risk.

  1. Don’t assume that because another tribe is doing it, you can do it too.

Every tribe is unique in how it governs and how its sovereignty intersects with state and federal governments. Just because another tribe has started growing cannabis does not mean that your tribe can or should  too. Tribes looking to grow or sell cannabis should lay their own groundwork by building community consensus, developing a regulatory framework, and then having that framework reviewed by the proper authorities. This cannot be accomplished overnight, but it is far from impossible. When it comes to cannabis businesses, slow and steady usually wins the race.