In my capacity as general counsel for the National Indian Cannabis Coalition, I (and the rest of the industry) have been closely tracking the President-Elect’s Cabinet nominations.  Cannabis legalization is perched precariously on the two prongs of (1) states’ rights; and (2) the Department of Justice’s policy position allowing United States district attorneys to decline to enforce cannabis-related violations of the Controlled Substances Act.  Congress doubled down by passing legislation withholding funding for the prosecution of marijuana crimes when the activity is legal under state law.

Those thinking about this issue and trying to gaze into the crystal ball to see past January 19, 2017 generally think that the costs associated with infringing on a state’s right to make its own laws by federal enforcement of federal marijuana laws may be to high to be realistic.  The fact that over half the states have some form of legalized marijuana, the number of potential unhappy constituents, loss of tax revenue from a $7 billion dollar industry and number of jobs lost if the marijuana violations were prosecuted also creates a political reality that would be difficult to overcome.

However, the DOJ’s policy is just that – a policy, not a law.  It can be changed with the stroke of an Attorney General Session’s pen.  And while I believe the states’ rights argument may protect the states from federal enforcement, I am concerned that same argument might not apply to tribes.

The Wilkinson Memo allows a United States District Attorney the discretion to determine whether to expend resources prosecuting marijuana violations in Indian Country located within their district.  Indian Country is federal land.  Given his previous statements on marijuana, I can see how an Attorney General Sessions might leave the states legalization alone while taking a hard line position on enforcement and prosecution of marijuana violations on all federal land, including Indian Country.  After all, “good people do not smoke marijuana”.  

For now, we do not know whether the Senate will even confirm Sen. Sessions or if this will be an issue that the Trump Administration will care anything about.  What is clear, however, is that for there to be stability in the industry and for tribes to be able to participate in this booming economic development opportunity without fear of losing their investment or other federal funding, Congress will need to act.

“trying to see the future”

Lael

If you are reading this blog from time to time, then likely you know about the protest against the Dakota Access Pipeline that has been happening on the Standing Rock Reservation in North Dakota.  Native America has gathered to support our cousins at Standing Rock and today, when the Court turned its efficient back on Indian Country, the Obama Administration stood with us.

In a Joint Statement from the Department of Interior, Department of Justice and Department of the Army issued mere minutes after the release of the Court’s opinion,  the Obama Administration put a halt to the construction near the reservation and asked the oil company to voluntarily cease construction on the pipeline within 20 miles of Lake Oahe!  Then, they said:

“Furthermore, this case has highlighted the need for a serious discussion on whether there should be nationwide reform with respect to considering tribes’ views on these types of infrastructure projects.  Therefore, this fall, we will invite tribes to formal, government-to-government consultations on two questions:  (1) within the existing statutory framework, what should the federal government do to better ensure meaningful tribal input into infrastructure-related reviews and decisions and the protection of tribal lands, resources, and treaty rights; and (2) should new legislation be proposed to Congress to alter that statutory framework and promote those goals.”

Continuing, the Statement says,

“In recent days, we have seen thousands of demonstrators come together peacefully, with support from scores of sovereign tribal governments, to exercise their First Amendment rights and to voice heartfelt concerns about the environment and historic, sacred sites.  It is now incumbent on all of us to develop a path forward that serves the broadest public interest.”

And all I can say is “Wow”.  Just “Wow”.

I was an employee of the Obama Administration and I cannot over-emphasize what a phenomenal effort this must have been by our friends and family working so hard on our behalf inside the government.  It can take weeks to get an even seemingly “simple” document approved by one Agency, let alone three.  And make no mistake, the POTUS himself had to approve this decision.

We have work to do still, no doubt.  We cannot relax.  We must remain vigilant.  Google’s dictionary defines vigilant as “keeping careful watch for possible danger or difficulties” and offers synonyms such as “watchful”, “observant”, “alert”, and my personal favorite, “hawk-eyed.”  There will be a ton of work to do.  Consultation will move forward as mandated by Executive Order 13, 175 which provides for meaningful consultation with Indian Tribes.  But this requires us, you and I, to be as vocal as we have been while on the front lines of the protest throughout the process.  For my tips on how to effectively “consult” check my blog “The Art of Consultation.”

Indian Country knows that the judicial system is not with us.  Some of you readers may not know that in 2001, the Native American Rights Fund started the Supreme Court Project whose purpose is to strengthen tribal advocacy before the U.S. Supreme Court by developing new litigation strategies and coordinating tribal legal resources, and to ultimately improve the win-loss record of Indian tribes. The Project is staffed by attorneys with the Native American Rights Fund  and the National Congress of American Indians (NCAI) and consists of a Working Group of over 200 attorneys and academics from around the nation who specialize in Indian law and other areas of law that impact Indian cases.

As I sit here in D.C.,  I am inspired by the work of the Standing Rock people, the protesters, the legal teams, and our friends in the Obama Administration.

Thank you, thank you very much.

Mni Wiconi. Water is Life.

Lael Echo-Hawk

On October 23, 2015 federal DEA agents raided a Menominee ‎hemp grow destroying approximately 30,000 plants. While the Tribe is claiming that the plants were all industrial hemp containing less than 3% THC, the DEA alleges that the plants were in fact marijuana. The Tribe has promised to bring the matter to federal court.

The recent federal and state law enforcement activity on federal land calls into question the true efficacy of the “Wilkinson Memo” that was widely advertised by industry, some legal advocates, and some tribes as “legalizing” cannabis on tribal land. These recent raids illustrate that if anything, the Wilkinson Memo simply opened a can of worms.

As I have been saying since the release of the DOJ Policy Guidance aka Wilkinson Memo, there are ‎very real legal hurdles that need to be overcome before a tribe should invest resources in developing an operation or allow industry access to tribal lands. It appears that the Menominee Tribe was in contact with the state and federal authorities regarding the grow which begs the question – what must a tribe do in order to participate in this emerging industry?

Menominee’s location in a state without any legalized marijuana is problematic. And if the plants are in fact marijuana plants and not hemp, then the tribe and/or its partner took a very risky gamble. If the plants are truly hemp, then it is clear that the feds are not going to allow tribes to participate in an agricultural project for a crop that, according to a Congressional Research Service report, has the potential to earn the second highest revenue‎ per acre (after tobacco).

I’ve been preaching the merits of hemp cultivation as a major economic opportunity for tribes. But it is not an opportunity to “get cute” and mix marijuana plants into the grow. Stay clean and I believe that investment could be very lucrative provided you are doing so within the framework provided by the 2014 Farm Bill.

At this point, it is clear that unless a tribe is located in a state with some form of legalized marijuana, engaging in this industry (even hemp) is very risky. And for tribes even in states with legalized medicinal or recreational marijuana, careful evaluation and coordination of the state regulations is a necessity. Yes, I know, we are sovereign governments but we can be both sovereign and smart… particularly when the risks are so high.

Take care,
L

An October 12 LexBlog article examines the possible implications of the federal government giving Native American Tribes the right to legalize, cultivate and distribute marijuana on their lands. We have seen the economic benefits provided by the Indian Gaming Regulatory Act of 1988 (IGRA), which is underscored by tribal gaming’s 116 percent revenue growth between 2001 and 2013. While I am skeptical that marijuana alone will bring the same level of economic growth as gaming, it is becoming clear that there is some economic benefit to be derived if only from the tax collected.

In the article, I briefly described what IGRA has meant for tribes and what it has allowed them to accomplish in the past three decades:

“With the gaming agreement [in 1988] came the ability of tribes to fund their own government and hire lawyers that weren’t legal aid attorney, and that 30 years have really yielded a boom in economic development and access to financial independence. Litigation takes a lot of time and money…[and now] there’s this ability for tribes to look at their legal situation and do something about it.”

We recently saw the signing of the Suquamish Marijuana Compact—the first tribal marijuana compact in the nation. While I like the tried-and-true compact model, I also believe that if tribes get involved in legalization efforts early on in the process in their states, some of the concessions made by the Washington tribes will not need to be replicated elsewhere. For example, by the time the Tribal DOJ policy guidance was released, Washington State had already locked down the recreational marijuana industry and allocated all the licenses. A tribe trying to get into the market would have to agree to State enforcement – which was a non-starter.

House Bill 2000 allows the tribes to participate in the State industry while preserving tribal sovereignty BUT Tribes utilizing these compacts must agree to a tax rate equal to the State. For obvious reasons, industry was concerned that Tribes would do what we have done with gas and cigarettes and impose a smaller tax on the products sold thus creating incentive for customers to come to the reservation in order save money. I do not think this has to be the case in other jurisdictions so long as Tribes participate in the legislative and rulemaking process from the beginning.

In a memo made public yesterday, the United States Department of Justice revealed that US Attorneys around the country have been instructed to treat any Indian Nation choosing to legalize marijuana consistent with the priorities DOJ previously outlined for all states in the August 2013 Cole Memorandum.  By treating Indian Country the same as states, the DOJ is recognizing the inherent right of tribes to make their own decision whether to participate in the marijuana industry.  The Cole Memorandum indicated that DOJ would focus its resources on the following eight law enforcement priorities:

  • Preventing the distribution of marijuana to minors;
  • Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
  • Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
  • Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
  • Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
  • Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
  • Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
  • Preventing marijuana possession or use on federal property.

For Tribes Considering Whether to Enter the Marijuana Industry
The decision to enter into the marijuana industry should not be taken lightly.  There are a number of policy issues to be evaluated, such as the impact on the tribal court system, Indian Child Welfare programs and employment.  Compliance with other federal grants for housing, foster care funding and 638 contracts also needs to be considered.  Robust regulatory systems must be implemented and enforced.  Tribes should also consider entering into MOU’s with the Department of Justice and the U.S. Attorney Office.

As in any other emerging area of law and industry, these first steps are the most important and should be carefully evaluated before taking action.

Warning Regarding Federal Law: The possession, distribution, and manufacturing of marijuana is illegal under federal law, regardless of state law which may, in some jurisdictions, decriminalize such activity under certain circumstances. Federal penalties for violating the federal Controlled Substances Act (the “CSA”) are serious and, depending on the quantity of marijuana involved, can include criminal penalties of up to 20 years in prison and/or a fine of up to $2,000,000. 21 U.S.C. § 841. The penalties increase if the sale or possession with intent occurs within 1,000 feet of a school, university, playground, or public housing facility. 21 U.S.C. § 860. In addition, the federal government may seize, and seek the civil forfeiture of, the real or personal property used to facilitate the sale of marijuana as well as the money or other proceeds from the sale. 21 U.S.C. § 881. Although the U.S. Department of Justice has noted that an effective state regulatory system, and compliance with such a system, should be considered in the exercise of investigative and prosecutorial discretion, its authority to prosecute violations of the CSA is not diminished by the passage of state laws which may permit such activity. Indeed, due to the federal government’s jurisdiction over interstate commerce, when businesses provide services to marijuana producers, processors or distributors located in multiple states, they potentially face a higher level of scrutiny from federal authorities than do their customers with local operations.