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Native American role in California cannabis economy contested

Posted on April 1st, 2019 by Bill Weinberg and tagged , , , , , , , , .

CaliforniaCalifornia's Native American nations were completely overlooked in the text of Proposition 64, and its enabling legislation. Now one tribe in San Diego County has staked its economic future to legal cannabis—and is standing up for its rights.


A glaring omission in the language of Prop 64, California's 2016 cannabis legalization initiative, was any provision whatsoever for the sate's indigenous inhabitants. The Golden State's native nations are sovereign entities under federal law, and this unique status leaves them with no legally defined role in the adult-use market.

Now, the Iipay Nation of Santa Ysabel in the rural northeast of San Diego County has opened a dispensary in the former site of a casino that closed in 2014. The Mountain Source Dispensary offers both bud and edibles, with an adjacent cultivation site operating as the Santa Ysabel Botanical Facility. The complex employs some 100, and a Santa Ysabel Tribal Cannabis Regulatory Agency has been established to oversee the new local industry.

The problem is that none of this has any legal recognition by the state of California. The state won't interfere with on-reservation sales, but there is no space under California law for Mountain Source to move its product beyond the borders of Santa Ysabel. The tribe and its supporters say this has to change.

Left behind by the law
Sacramento's cannabis bureaucracy acknowledges that as sovereign nations, tribes can do whatever they want with cannabis on their reservations. "But they cannot operate in the licensed California market," Alex Traverso, a representative of the California Bureau of Cannabis Control, told the San Diego Union-Tribune. That means no off-reservation sales, shipments or locations.

David Vialpando, head of Santa Ysabel's Tribal Cannabis Regulatory Agency, said that this matter needs to be resolved. "As predicted, there will be additional dispensaries opening up on tribal lands throughout California," he told the Union-Tribune.

Vialpando said that for the past two years, 23 of California's 109 federally recognized Native American nations have been working on legislation in Sacramento that would allow tribes to enter the state's general cannabis market. They've met with lawmakers and hired lobbyists to press their case—including former lieutenant governor Cruz Bustamante.

Vialpando also serves as executive director of the California Native American Cannabis Association (C-NACA), which includes five of San Diego County's 18 federally recognized tribes: the Campo, Los CoyotesSycuan and Manzanita as well as the Iipay of Santa Ysabel. (All these are members of the Kumeyaay indigenous people of Southern California.) 

But the Iipay Nation's attempts to get their facility licensed by state authorities have been rebuffed. As reporter Brooke Staggs explains in the Orange County Register: "California law requires local jurisdictions to approve cannabis businesses before the state will issue its approval, and cities and counties near tribal lands insist—correctly—that they have no authority over tribal land. To date, none of the three agencies that license cannabis businesses in California have issued permits for projects in Indian Country, though they said they're reviewing applications."

Those three agencies are the Department of Consumer Affairs' Bureau of Cannabis Control, the Department of Public Health's Manufactured Cannabis Safety Branch, and the Department of Food and Agriculture's CalCannabis Cultivation Licensing Division.

"It's a long pattern in this state," Vialpando told Staggs. "There's a history of marginalizing tribes. There's a history of not wanting to engage with tribes."

Cannabis versus tribal sovereignty?

That failure to engage was unfortunately also seen in Prop 64's enabling legislation, the Medicinal and Adult-Use Cannabis Regulatory Safety Act (MAUCRSA), which took effect at the start of 2018—again, with no provision for Native Americans.

The new rules promulgated by those three relevant state agencies in November 2017 in preparation for the adult-use market taking effect did attempt to close this gap in the law. But the way the Bureau of Cannabis Control regs tried to address the issue was to demand that tribes applying for a license submit to a "Limited Waiver of Sovereign Immunity."

Ariel Clark, a partner in the Los Angeles-based Clark Neubert law firm, specializing in the cannabis industry, was contacted by Cannabis Now for a perspective on this attempted compromise measure. It is something of a personal issue for her, as the Michigan-born Clark is part Native American—her father was a member of the Grand Traverse Band of Ottawa  & Chippewa

"The state of California does not have jurisdiction over businesses on tribal land," Clark says. "Proposition 64 completely left out tribal land. The new Bureau of Cannabis Control regulations demand that tribes waive tribal authority to participate in the legal market. For the 109 federally recognized tribes in California, casinos and other avenues for economic development are few and far between. About 80% of California's Native Americans are at or below the poverty level, and a lot of tribes are in rural areas that could really benefit from cannabis. But waiving their sovereignty is a non-starter for them, because that is their nation identity."

In addition to the proposed state legislation, Clark says native nations are exploring options for "inter-tribal commerce" in cannabis, to get around current state law.

To an extent, this is a replay of the controversy over gambling on tribal lands, which took off in the 1980s. It was a California tribe, the Cabazon Band of Mission Indians in Riverside County, that launched a critical test case concerning tribal sovereignty in this regard. The 1987 US Supreme Court ruling in California vs. Cabazon Band held that states had no authority to regulate gaming on reservations unless specifically granted that authority by Congress. The ruling led to the following year's passage of the Indian Gaming Regulatory Act, providing a mechanism for states to enter into "compacts" with tribes to oversee reservation casinos.

A history primer on the website of the Santa Ynez Band of Chumash Indians relates how 61 California tribes finalized their tribal-state compacts for reservation gaming in 1999. In March 2000, California voters passed Proposition 1A, approving gaming on reservation lands. The tribal-state compact received approval from the US Bureau of Indian Affairs in May of that year, and became effective immediately. Reservation gaming is now a $7 billion industry in California.

As the casino economy began to falter in the Great Recession, many tribes started looking to cannabis. In 2014, the US Justice Department issued the Wilkinson Memo, instructing fedral prosecutors not to interfere with cannabis sales or cultivation on tribal lands. Several California tribes subsequently legalized medical marijuana on their reservations. But high hopes were tempered by state interference. In summer 2015, federal agents raided cannabis operations run by the Pit River and Alturas tribes in Modoc County, seizing more than 10,000 plants. That fall, Mendocino County deputies raided a cannabis grow run by the Pinoleville Pomo Nation.

The first attempt to remedy the situation in Sacramento was Assembly Bill 924, which died in committee last year, on its third try at passage. Its sponsor, Assemblyman Rob Bonta (D-Oakland), told the Orange County Register, "We should have solved this by now. Our tribes absolutely deserve a right to participate in the same legal cannabis market as other stakeholders."

A federal solution?
In the case of the Iipay Nation, the situation is further complicated by a 2017 San Diego County ordinance that bans cannabis cultivation in the unincorporated parts of the county. San Diego Board of Supervisors chair Dianne Jacob has equivocated on whether this applies to reservations.  "I'm really concerned mainly because the County of San Diego has a ban on dispensaries," she said Union-Tribune. "Our preliminary review of this is that they do need a license. We’re going to find out from our counsel and pursue it from there."

A big help in straightening all this out would be some clarity from the federal government, as was ultimately provided on the casino question. Reached for comment by Cannabis Now, the National Congress of American Indians (NCAI) pointed hopefully to the Strengthening the Tenth Amendment Through Entrusting States Act (STATES Act). Introduced last year, this would bar federal cannabis enforcement in states that have legalized—and on the lands of Native American nations that have done so. It was recently re-introduced by Sens. Elizabeth Warren (D-MA) and Cory Gardner (R-CO)

"The NCAI strongly advocates for the recognition of tribal sovereignty and inclusion of tribal governments in national legislation," said the organization's president, Jefferson Keel. "We appreciate the re-introduction of the STATES Act, which would bring certainty in federal law for tribal nations as separate jurisdictions. Tribal nations, as sovereign governments, and in the spirit of self-determination, must be able to make independent decisions about their own economic, cultural, and social futures at the local, tribal level."

An effort specifically crafted to address the Native American question is the Tribal Marijuana Sovereignty Act, introduced this year by Rep. Don Young, an Arkansas Republican. 

Returning to the state level, Ariel Clark is encouraged that the C-NACA "has reached out to the politicians and is trying to have that conversation." But despite California's passage of a "cannabis equity" law last year, awareness of the indigenous dimension is only just taking hold. "Tribes are not considered in the discussion of social equity and justice," she says.

Cross-post to Cannabis Now

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