Cannabis Business Blog

A little over a year ago, the Department of Justice released the infamous “Wilkinson Memo” containing DOJ policy guidance to U.S. District Attorneys on Marijuana in Indian Country.

Chaos ensued.

Media and industry began shouting “Marijuana is legal in Indian Country!” from the rooftops. Tribal leaders were swarmed by tribal members demanding that marijuana be immediately legalized. State and local jurisdictions were worried about the impact of legalization on their jurisdictions. Some tribes immediately announced their intent to open large marijuana operations; other tribes issued strong statements against legalization, and lawyers all started scratching our heads.

As the debris settles, we look back at a year with several tribes attempting to enter into the industry. The federal government either closed down their operations or the tribes shut down their operations themselves. Two tribes successfully opened two retail shops.

The truth is that there is just too much uncertainty in the law for most tribes to confidently enter into the industry. But there does seem to be economic opportunity available and some tribes will be able to take advantage of that.

Here are some highlights from 2015:

• • Development of the National Indian Cannabis Coalition. In February 2015, Jeff Doctor (Seneca) announced the establishment of NICC. NICC’s mission is to educate tribal leaders and elected officials on the emerging regulated cannabis industry while advocating for parity on behalf of Indian Country. NICC has been on the forefront of cannabis policy development in Indian Country, speaking at conferences around the country and weighing in on policy development at the Congressional and Administrative level.

• • Development of a draft tribal marijuana bill. Congress has been paying attention to the concern in Indian Country that dabbling in the cannabis industry could lead to the termination of federal grants or other funding. House representatives drafted a bill that would clarify that tribes would not lose federal funding if they were engaged in economic development in the cannabis industry.

• • HHS Secretary Burwell promised that tribes engaged in the cannabis industry will not lose their federal funding so long as they do not use HHS funds in those endeavors. (Now we need more such statement from other Agencies).

• • Suquamish and Squaxin Island open and operate (successfully) two retail marijuana stores on their reservations. While other tribes were being raided, these tribes in Washington were quietly negotiating with the State and preparing to open their retail stores. Now I hear that several other tribes are in negotiations with Washington State to do the same.

What should we look for in 2016?

• • Ruling in Menominee v. DEA and DOJ determining whether a tribal college is an “institute of higher learning” for the purposes of growing hemp under the Farm Bill.

• • Congressional legislation protecting federal funding for tribes engaged in the cannabis industry.

• • Development of a single federal policy regarding legalization of cannabis in Indian Country.

• • Development of tribal cannabis businesses in states with some form of legalization.

There have been a couple tribes who have tried unsuccessfully to open marijuana operations within states that have no form of legalized marijuana. The logistics of ‘legalization on an island’ are at this point, in my opinion, too difficult to overcome. Instead, the focus should be on developments within states with some form of marijuana legalization. I understand that this means that tribes in restrictive states without other forms of economic development will lag behind others – but cannabis remains a schedule 1 Controlled Substance carrying severe penalties for those convicted of possession, intent to manufacture or distribute. It is just not worth the risk unless you KNOW your intergovernmental agreements are strong and protect tribal people and tribal investments.

We are still in the infancy of this industry, both in Indian Country and the “outside” world. Growing pains are inevitable. What is both encouraging and frightening is that for the first time since gaming, non-Native businesses are coming to Indian Country. A word of caution - be careful who you work with – the sharks are circling and while they can leave and change their name, we are tribal people and members of our tribal nations from the beginning of time to the end of time and these businesses will remain part of our tribal history forever. Make sure that history tells a good story of developing cutting edge industries in a good way.

Garvey Schubert Barer will be sponsoring and attending the Cannabis Collaborative Conference at the Portland Expo Center on February 3 and 4. The conference will kick off with a keynote address from former NBA All-Star and Portland Trail Blazer Cliff Robinson, a cannabis advocate, and will feature 80 cannabis industry speakers and more than 90 exhibitors.

The numerous sessions are devoted to informing both existing businesses and new ventures about recent industry developments, including interactive workshops and hands-on demonstrations hosted by the Oregon Liquor Control Commission. This year’s conference is shaping up to be a can’t-miss event for members of the cannabis community.

You can find us at the following events on Wednesday, February 3:

• 2:15-3:00 PM - “Ask the Experts” Roundtable

Emily Harris Gant, Scott G. Warner and William K. Kabeiseman will participate in this informal round table session and will be available to answer attendees’ questions about corporate, intellectual property and real estate & land use issues, respectively, as they relate to the cannabis industry.

• 3:15-4:00 PM - The Status of Investing in the Cannabis Industry

Harold E. Snow, Jr. will review the law and regulations concerning who can invest in the cannabis industry and how, both directly and indirectly, and he will offer suggestions on maximizing investor participation in the emerging cannabis industry.

• 7:00-10:00 PM - Evening Reception

GSB is hosting the conference’s Wednesday evening party.

We hope to see you there!

Looking for a location for a licensed marijuana premises? Changes to the buffer zone requirements may be headed to your fair city.

Previously, the Washington State Liquor and Cannabis Board (“LCB”) would not issue a license for any premises within one thousand (1,000) feet of various sensitive uses, namely, elementary or secondary schools; playgrounds; recreational centers or facilities; child care centers; public parks; public transit centers; libraries; or game arcades admitting minors. RCW 69.50.331(8) (2013).

This requirement caused headaches for many applicants, as they scrambled to find compliant locations. This was particularly true for retailers in larger cities, where much of the prime real estate was near a public transit center, by a public park, or otherwise within the 1,000 foot buffer zone.

Thinking about opening a recreational store or medical cooperative in Tacoma? Better sit tight, at least for the time being.

On Tuesday, January 13, 2016, the Tacoma City Council passed a “temporary moratorium on new marijuana retail uses and a prohibition on the establishment of marijuana cooperatives.” Substitute Ordinance No. 28343.

From a practical perspective, this means that Tacoma will not accept or process applications for city licenses, or for land use, building, or other development permits.

The moratorium does not impact existing State- and city-licensed recreational marijuana retailers, which can continue to operate.

The Tacoma Planning Commission is currently revising the Land Use Regulatory and Nuisance Codes. The Commission is expected to forward recommendations to the City Council in March 2016.

The moratorium is set to expire within six months. Although the City Council could technically renew the moratorium, it apparently expects to lift the moratorium after voting on the amended Land Use and Nuisance Codes in April or May 2016.