NEW YORK (MainStreet) — Some 56.2 million acres of land are held in trust by the U.S. for various Indian tribes and individuals, which could one day facilitate trading cannabis supply among tribes now that the Department of Justice has announced it would allow marijuana sales on sovereign land.
However, until marijuana is legal federally, only reservations that are continuous from state to state can transport by ground without breaking the law.
“If it’s non-continuous and you have to leave sovereign land with marijuana in hand, the tribe then becomes subject to federal laws,” said Marc J. Ross, a corporate and litigation attorney in Manhattan who is teaching a marijuana business class at Hofstra University School of Law in New York. “Intra-state isn’t a problem but inter state triggers a federal question.”
Sovereign land refers to the inherent authority of indigenous tribes to govern themselves within the borders of the United States of America, but even if reservations are continuous, current differences in state law around the possession of marijuana still pose a problem.
“The only states that have a realistic possibility of transferring supply is Oregon and Washington because other neighboring states maintain criminalization policies,” said Rob Porter, a tribal law expert and former president of the Seneca Nation in New York.
“Even if you leave the reservation by airplane, that’s crossing state lines with an illegal substance and there are Federal Aviation Administration, freight and cargo rules, which would also apply,” said Adam Laufer, co-founder with MJ Holdings, a marijuana real estate investment firm.
Regardless if they traded supply or not, cannabis businesses on tribal land would still each be their own enterprise just as the casinos Mohegan Sun and Foxwoods in Connecticut are operated independently by the Mohigan Tribe and the Mashantucket Pequot Tribe, respectively.
“They don’t have to work with other reservations,” Ross told MainStreet. “Each could have their own marijuana cultivation and sales while operating autonomously and separately.”
The overall advantage of a pot dispensary operating independently on an Indian reservation in a legal state such as Colorado is the lack of bureaucratic requirements.
“For those with an ownership interest who are not on tribal land in Colorado, you would have to be a resident for two years in order to get a license and submit to a background check,” Laufer told MainStreet.
The downside for CEOs that locate their pot business on a reservation in partnership with an Indian tribe is that they can never own the land.
“We are a public company that certifies in our SEC filings that we are not violating federal law, which would include any activities in which we are in contact with marijuana or the chain of possession, whether on Indian land or not,” Laufer said.
For now, selling marijuana on Indian reservations is at the planning stage with Porter organizing the first annual tribal marijuana conference in Seattle on February 27.
“This is extremely early stage in terms of what the best business model will be on Indian reservations and whether the industry would be nationalized across state lines and how much trade there will be if at all across tribal territories,” Porter told MainStreet. “At this point it’s unwritten so anything is possible.”
-Written for MainStreet by Juliette Fairley