Two tribes enter into first marijuana compacts under new state law in Nevada

Thursday, August 3, 2017

Nevada tribes are getting into the marijuana industry by following a successful model from a nearby state.

The Ely Shoshone Tribe and the Yerington Paiute Tribe are the first to enter into marijuana compacts in the state, a consultant group announced. The agreements were made possible under Senate Bill 375, which became law in June.

"We quickly learned that no one tribe is the same as another. They each have very unique values, histories, and membership that reflect the opportunities they have or don't have with the cannabis industry," Cassandra Dittus, a co-founder and president of Tribal Cannabis Consulting, said of the need for individualized compacts.

Gov. Brian Sandoval (R) signed the bill into law on June 2. At the time, his office said the measure was "supported by all of Nevada’s 27 tribes and will present economic development opportunities for these communities."

Senate Bill 375 recognizes the authority of tribes to grow, sell and market marijuana in a state where the drug is legal for medicinal and recreational purposes. Compacts, while not necessary, are encouraged to address law enforcement, jurisdiction and other issues.

A similar model first emerged in Washington in 2015. Since then, a handful of tribes have successfully entered the marijuana market and several more are interested. That's a big difference from other states, where tribes have faced raids or have been threatened by state and federal authorities.

Long lines have been seen at marijuana dispensaries in Nevada since widespread sales began on July 1, 2017. Photo: Beverly Yuen Thompson

It's also big business. Marijuana operations in Washington sold nearly $1.4 billion in fiscal year 2017, which ended on June 30, according to the Liquor and Cannabis Board. While tribes are not required to pay taxes, commercial retailers generated $314.8 million in taxes for the state during that time.

Tribes in Nevada are sensing similar opportunities for their communities. According to Nevada Tribal Cannabis Alliance, which lobbied for the compact bill, marijuana sales are expected to generate $7.5 billion in economic activity in the first seven years.

"The cannabis industry will create opportunities for the 27 federally recognized tribes and 40,000 Native Americans living in Nevada," the alliance states on its website.

There are signs the tribes are right about the numbers. After recreational marijuana was legalized by voters in November 2016, sales were initially limited to qualified liquor distributors. But full-scale operations began on July 1 and the response was so strong that supplies ran low, prompting the Nevada Tax Commission to adopt emergency rules aimed at bringing more products to the market.

Despite the change in state law, marijuana remains illegal under federal law and, by extension, in Indian Country. A Department of Justice policy that was issued during the Obama administration seemed to recognize the ability of tribes to legalize the drug on their own yet Washington so far has been the only state where operations have begun without problems.

The Trump administration has not rescinded the policy but Attorney General Jeff Sessions, the new head of the department, has vowed to take a harder stance against marijuana.

Department of Justice Document:
Policy Statement Regarding Marijuana Issues in Indian Country (October 2014)