Tribes choose paths into cannabis industry

An aerial photo of a potential site for the community-owned marijuana business.

TRAVERSE CITY — Tribal chairman Bryan Newland said he was looking for help during one of his early encounters with Andrew Brisbo, the director of Michigan’s new Marijuana Regulatory Authority.

A state-licensed cannabis company was delivering its product to tribal citizens on the Bay Mills Indian Community’s reservation, in violation of tribal and federal law. Newland said when he raised his concerns, Brisbo simply responded “That’s not my problem.”

According to Newland, many of the tribe’s interactions with the MRA have been equally unhelpful, and disrespectful of sovereignty.

“It’s not how governments do business with one another,” he said.

Bay Mills announced this week the tribe plans to develop a community-owned cannabis business on its lands across the state of Michigan, where the operation will be licensed and regulated under tribal law.

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When Michigan legalized cannabis in November of 2018, Newland was immediately concerned about the risks for tribal citizens if cannabis was not legalized by the tribe.

So, in short order, the Bay Mills tribal council passed laws that mirrored the state’s.

One of those laws prohibits anybody but the tribe from engaging in the cannabis business on the reservation, which is why Newland asked Brisbo for assistance: a state-licensed seller was violating tribal law.

Newland said Bay Mills’ relationship with the MRA didn’t improve once the tribe began researching what it would take to grow, process and sell cannabis on the reservation. A spokesman for the Marijuana Regulatory Agency declined comment for this story both on behalf of Andrew Brisbo and the agency.

A risk for any cannabis operation, whether state-licensed or tribal, is that cannabis still is illegal under federal law.

However, according to Newland, federal law enforcement usually will not bother tribal operations as long as tribes pass laws similar to the state where they are based, and as long as they have an agreement with that state’s government.

“If you have a state like Washington, where the tribes in the state have reached an agreement about how it’s regulated, how it’s taxed on and off the reservation, what happens when they move marijuana across the reservation boundary, their direction,” Newland said. “The feds usually leave that alone.”

While Washington State and their tribes have come to an agreement, it hasn’t been that easy for the Bay Mills Indian Community. The tribe proposed an agreement with the state of Michigan more than a year ago, and so far has been met with “flat-out refusal” to even sit down and negotiate.

According to Newland, Gov. Gretchen Whitmer, her administration, and Marijuana Regulatory Authority said they don’t have the authority to sign such an agreement with any tribe.

Instead, they said that if tribes agree to be regulated and licensed by the state, then the state will work with them. Such an arrangement is a violation of tribes’ sovereignty, Newland said.

“So the state is telling companies, ‘if you do business with tribes, you could lose your license and face a lot of fines and penalties’”, said Newland. “So they essentially scared off a lot of companies from working with tribes unless tribal governments themselves agree to be taxed directly by the state, and submit to state jurisdiction on our own lands.”

Newland said given the sovereign-to-sovereign frameworks that govern things like fishing regulations or law enforcement, it is “hard to overstate how intellectually dishonest” the state’s policy proposal is.

“There’s no precedent for that in Michigan,” he said. “It’s plainly contrary to all of federal Indian law. And it’s a power grab.”

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Not all northern Michigan tribes are interested in launching their own cannabis production operations. Some have decided to strike agreements with state-licensed operators.

The Sault Ste Marie tribe of Chippewa Indians and Little Traverse Bay Bands of Odawa Indians have both made their own deals with Lume, leasing tribal trust lands to the company to build and run its dispensaries.

In such arrangements, the tribes are essentially acting as landlords, which means they are getting rent from Lume. They have both expressed that the reason behind getting into the industry this way was to avoid possible intervention from a federal level.

Having a state-licensed dispensary on the tribal trust land minimizes that risk. Fred Harrington, a tribal council member from the Little Traverse Bay Bands of Odawa Indians said “When you take the money and move it from one place to another it’s risky business. It’s still federally illegal and they can seize it...What we came up with was the absolute least risk was to simply lease it to someone who would take all the risk.”

The Sault Tribe publicly announced its deal with Lume in late July, and tribal officials said they received mixed reviews from the community, and positive responses from those in the cannabis industry.

MiBiz reported that Lume benefits because putting dispensaries on tribal trust land allows them access to municipalities like Mackinaw City and Petoskey that outlawed cannabis dispensaries.

Joel Schultz of the Sault Tribe’s Economic Development Corporation said there isn’t anything preventing them from doing it any other way, or opening tribally-owned dispensaries sometime in the future.

MiBiz also reported the arrangements with Lume on tribal trust land benefits the tribes by providing revenue through a long-term lease.

While Schultz says it would be creating jobs for tribal citizens, who get hiring preference over comparably skilled applicants.

Schultz said his only issue with the state is that it’s slow to give regulatory blessing.

“At first they wouldn’t issue licenses on tribal lands which put us in a tough spot,” he said.

Schultz says his tribe’s legal team spent a lot of time working to get the approval from the state. When they got it, that’s when they started looking for opportunities to have the best state-licensed operated dispensary on their lands, leading them to Lume Cannabis Co.

In the meantime, the Little Traverse Bay Bands of Odawa Indians quietly made a deal for Lume to open dispensaries in early July on its lands in Petoskey and Mackinaw City.

LTBB planned an event more than a year and a half ago with more than 100 tribal citizens, to involve them in the decision making, according to Fred Harrington.

“I did a show of hands and almost everybody in the room was in favor of doing it,” he said.

Harrington is happy with the arrangement so far, and said Lume took care of everything, including getting all the permits and licenses and even tearing down the old buildings.

Harrington has also said working with Lume has been a good situation for LTBB because the tribe didn’t need to invest anything.

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Newland said that he “doesn’t begrudge” the ways other tribes have entered the industry, but that Bay Mills’ citizenship “expressly prohibited” its government from doing the same when it voted on regulations

“We are at a point now where we’re ready to share our intentions with the public,” he said.

In a press release Wednesday, the tribe announced its plans to open an operational dispensary on tribal land under tribal laws and regulations.

The chairman told the Record-Eagle that Bay Mills had “tried to extend a hand to work with the state” but that they’re no longer waiting to move forward with their plans to generate revenue.

“We’re not asking the State’s permission to use our own land,” he said.

Newland said the tribe plans to build a full-service operation: grow the cannabis, process it, cultivate it and sell it.

“[It’s] going to create job opportunities for folks with varying degrees of skills and educations,” he said. “The folks involved often have a highly skilled science background, you need people to manage the financial aspects, there will be building and trades for the construction.”

Tribes across the country have undertaken similar economic development efforts for decades, exercising their sovereign rights as independent nations.

The initial site for Bay Mills’ operation will be about 5 minutes south of Sault Ste.Marie, where M-28 and I-75 intersect, but Newland said the tribe “intends to make use of” its land holdings all over Michigan.

Bay Mills’ would be the first tribally-owned dispensary but Newland hopes to set up an intertribal network to supply other tribes.

Newland doesn’t expect pushback from the state of Michigan on the tribe’s new plans.

“Their top regulator said it wasn’t his problem,” he said.

This reporting project was produced in partnership with the Mishigamiing Journalism Project, a grant-funded effort that provides journalism fellowships to emerging Indigenous journalists.

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