State-Tribal Marijuana Compacts: Will Tribal Marijuana Look Like Gaming?

In October 2014, the federal government announced that (if done correctly) Native American Tribes are free to legalize, cultivate, manufacture, and distribute cannabis on tribal lands without federal intervention. As we wrote in Tribes And Cannabis: This Will be Big, the Feds are giving the impression that they will no longer prosecute federal laws regulating the growing or selling of marijuana on reservations, even when state law bans the drug. But it will enforce those federal laws if so requested by a given tribe. The memo authored by Monty Wilkinson, Director for the Executive Office for U.S. Attorneys, reflecting this new policy can be found here.

A Native American Peyote Set
A Native American Peyote Set

Since the release of this memo, we held the nation’s first ever Tribal Marijuana Conference at the Tulalip Resort and Casino. The event was a great success with over 450 people in attendance and tribal government representation from over 75 tribes. Speakers covered a multitude of topics, including federal marijuana policies and laws, various state law marijuana regimes from California, Nevada, Colorado, and Washington, business considerations for tribes contemplating getting into the marijuana industry, and complicated intersections of federal, state, and tribal law when it comes to marijuana. Since the Conference, several tribes have indicated significant interest in taking advantage of the Wilkinson memo, but we have yet to see a tribe actually undertake the development of a marijuana grow operation on tribal lands.

In Tribal Marijuana: Patience is a Virtue, we talked about how there is no rush for tribes to get into the marijuana industry. The tribes have plenty of time to ensure that they are making the right (and educated) decision on marijuana for their particular tribe. At the same time, states are beginning to get proactive about their own visions for tribes getting into the cannabis industry and any tribe considering the marijuana industry should at least be aware of the position of the state in which their tribal lands sit.

As a for instance, the State of Washington is looking to pass a bill that would allow the governor to enter into compacts with willing tribes regarding marijuana commerce. Washington has legal medical and recreational marijuana marketplaces — which both compete against each other and against the illegal market for consumer turf and many Washington lawmakers are worried about putting tribal marijuana into this already volitile mix. Washington State House Bill 2000 would require that tribes that want to interact with the state’s already existing cannabis marketplaces go through the state first. This would mean that tribes would need to work with state-licensed producers, processors, and retailers and also work first with the state in implementing their own marijuana regulations regarding the same.

HB 2000 stipulates that agreements under the compact may include, but are not limited to, the following provisions and subject matter:

(a) criminal and civil law enforcement;

(b) Regulatory issues related to the commercial production, processing, sale, and possession of marijuana, and processed marijuana products, for both recreational and medical purposes;

(c) Medical and pharmaceutical research involving marijuana;

(d) Taxation;

(e) Any tribal immunities or preemption of state law regarding production, processing, or marketing of marijuana; and

(f) Dispute resolution, including the use of mediation or other nonjudicial process.

A spokesperson for Governor Jay Inslee told the media that “the state has the infrastructure for [the marijuana] marketplace, we have the retail outlets, the inspection process, the labeling. We think that’s one of the things that’s going to draw tribes to the compact.” Essentially, if a tribe wants to be a part of the state’s marijuana medical or recreational system, either by selling or buying marijuana outside of the tribe’s borders, the contract with the state would detail how to proceed.

Tribes are no strangers to compacts with states. Tribal gaming laws and the litigation surrounding them established that tribal-state compacts are mandatory for Class III gaming on tribal lands under the Indian Gaming Regulatory Act of 1988 (IGRA). According to Congress, “the express purpose of the IGRA was to balance the Indians’ interest in tribal sovereignty with the states interest in guarding its citizens from corrupt gaming activities and organized crime infiltration.” The compacts were designed to allow tribal and state governments to come to a “business” agreement regarding gaming, a major source of revenue for gaming tribes. Many tribes view IGRA as an excessive restraint on tribal sovereignty and resent how it can constrain their ability to generate tribal income.

Though HB 2000 does not mirror IGRA, it clearly reflects the State’s desire to control tribal interactions with the state’s marijuana industry and we have already heard from some tribes that are not keen to sign on. All this leaves us to wonder about what tribal marijuana will look like in various states. Will it eventually become like tribal gaming or something else entirely different?