Editor’s word: This is an expanded model of the report that appeared within the Feb. 22 version of The Brookings Register.
Legalization of marijuana in South Dakota may present a brand new, profitable economic-development alternative for Native American tribes and tribal members who’ve traditionally struggled to search out prosperity and stability within the state economic system.
Voter-approved measures to legalize marijuana in South Dakota could also be on maintain or stalled in the intervening time, however planning and analysis into making a regulatory framework and enterprise alternatives surrounding authorized pot are persevering with.
As these discussions and proposed laws transfer slowly ahead, it’s changing into more and more clear that South Dakota Native tribes and communities have benefits in coming into the authorized marijuana market shortly and with a excessive likelihood of success.
As proven in Western states which have already legalized marijuana, Native tribes that function as sovereign nations have discovered the marijuana trade to be a path to creation of recent jobs, era of tax revenues and redevelopment of communities which have typically suffered financial hardship.
“It’s a new industry that brings new challenges to a tribal government, but it also brings forward a demographic of people who weren’t welcomed at the table before,” stated Laurie Thom, enforcement director on the Inter-Tribal Marijuana Enforcement Commission of Nevada. “Not only does it allow tribes to thrive, but it allows individual tribal members to spread their wings and their skill sets.”
South Dakota voters in November permitted a statewide initiative to legalize medicinal marijuana and handed a constitutional modification legalizing the possession, use, development and sale of leisure marijuana for adults. Both measures had been set to take impact on July 1.
But Gov. Kristi Noem is looking for to delay legalization of medical marijuana for a 12 months and has led a courtroom problem to legalization of leisure marijuana. A state choose not too long ago declared the leisure marijuana modification unconstitutional, however an attraction of her determination to the state Supreme Court is seen as probably.
South Dakota Sen. Troy Heinert, D-Mission, stated marijuana legalization and companies related to marijuana can present a lift to Native American reservations which have lengthy confronted financial challenges. South Dakota tribal communities have traditionally seen higher-than-average unemployment charges and low median incomes in contrast with the remainder of the state.
“I think it has a very good chance to provide an economic engine that could transform tribal communities,” he stated.
Heinert, a member of the Rosebud Sioux Tribe who’s the minority chief within the South Dakota Senate, stated a number of components might give an edge to tribal governments or particular person tribal members who pursue financial improvement associated to authorized marijuana.
Heinert stated tribal governments are smaller and extra nimble than state authorities in regard to issuing permits or licenses associated to the expansion, manufacturing or sale of marijuana.
Reservation communities even have the pure sources and potential workforce to assist speedy improvement of marijuana-related companies.
“The biggest thing is that we can move faster,” Heinert stated. “We have a land base; we have lots of people who are looking for work, and it is something that would be new.”
Heinert stated residents on reservations and in tribal communities in South Dakota voted overwhelmingly in favor of legalization of each medical and leisure marijuana in November 2020.
Rep. Mike Derby, R-Rapid City, is a frontrunner of the legislative Cannabis Caucus who has submitted an in depth plan to create a regulatory framework for authorized leisure marijuana within the state. His measure, House Bill 1225, remains to be transferring ahead regardless of the latest courtroom ruling, Derby stated.
The caucus has invited tribal members and officers to its conferences to debate potential alternatives for financial improvement surrounding marijuana legalization.
“This is part of answering the question, What can we do legislatively to help residents of our tribes and reservations?” Derby stated.
Derby stated he has realized that the potential exists for companies owned by tribes or tribal members to develop a vertical trade platform, or “Seed to Sale” operation, wherein a enterprise grows, checks, packages after which sells marijuana and associated merchandise.
“We absolutely see an opportunity there,” Derby stated. “It’s about jobs and job creation.”
Heinert stated tribes should be cautious to not jeopardize any federal funding by transferring too shortly to implement authorized marijuana gross sales, which stays unlawful underneath federal legislation. The signing of administrative compacts between tribes and state or federal governments associated to marijuana is frequent in different states.
“They wouldn’t want to do anything that could jeopardize federal support for public safety or for the Indian Health Services, for example,” Heinert stated. “We wouldn’t want to have something that is legal on reservations and illegal when you cross reservation lines.”
Heinert added that the administration of President Joe Biden seems prepared to assist Indian tribes and any efforts that create financial improvement in tribal populations.
The improvement of a extremely regulated system of rising and promoting marijuana could possibly be a option to quickly develop improvement of infrastructure and the economic system of Native communities, Heinert stated. Many reservations now see vital spending by tribal members off of reservations as a result of there may be not a robust retail economic system on reservations.
“That money would be turning over in our communities and that’s something we really need,” he stated.
One S.D. tribe prepared to have interaction
The Flandreau Santee Sioux Tribe in japanese South Dakota is conserving an in depth eye on marijuana legalization and is positioning itself to be an early adopter relating to creating new companies associated to marijuana, stated Monte Lovejoy, coordinator of Native Nations Cannabis, a enterprise run by the tribe.
“Once everything is figured out and all the wrinkles are ironed out, we definitely want to be a player in the state,” Lovejoy stated. “We want to have a certified business and be a player in this industry.”
The Flandreau tribe already operates a thriving cannabidiol, or CDB, enterprise that sells authorized hemp-derived medicinal merchandise on-line. The established CDB enterprise may assist the Flandreau Sioux transfer extra seamlessly into authorized marijuana industries, both by cultivating or promoting marijuana, Lovejoy stated.
The small tribe with about 800 enrolled members drew nationwide consideration when it tried to launch a marijuana operation in 2015 wherein it started rising marijuana and deliberate to open a resort. The strikes got here after the U.S. Justice Department outlined a brand new coverage to permit Native tribes to develop and promote authorized marijuana. Those plans had been scuttled and the marijuana crops had been burned after South Dakota authorities cracked down on the plans.
Lovejoy stated the tribe will take a cautious method to implementing a marijuana framework that follows or exceeds security and regulatory requirements put in place by the state of Colorado, the primary state to legalize leisure marijuana.
“In everything we’re doing [with CBD], we are taking the approach that we want to be as legitimate as possible. We’re raising the bar higher than expected,” Lovejoy stated.
The tribe sees authorized marijuana as one other income driver for its folks and reservation, which is contained nearly wholly throughout the metropolis of Flandreau, about 45 miles northeast of Sioux Falls. In addition to its CBD enterprise, the tribe additionally manages an industrial park, raises a buffalo herd and operates a on line casino, resort, RV park and restaurant advanced.
“Anything we can do will be an injection of revenue into the local economy,” Lovejoy stated. “Once this all gets worked out, this new industry is going to bring more jobs.”
Nevada units instance of tribal success
South Dakota tribes and entrepreneurs can look to Nevada for steerage on learn how to promote and information development of marijuana-related industries on reservations or in tribal communities.
Nevada voters permitted authorized use of home-grown marijuana for medical functions in 2000; authorized gross sales of medical pot started in 2015. Voters permitted legalization of leisure adult-use marijuana gross sales beginning in July 2017. As of September 2018, marijuana development and gross sales on reservations have been regulated by a brand new division of state authorities often known as the Tribal Marijuana Enforcement Division of Nevada, which incorporates the Intertribal Marijuana Enforcement Commission.
As of early 2021, 11 tribal entities have signed compacts, or administrative agreements, with Nevada, setting cross-jurisdictional tips for authorized development, sale and use of marijuana on reservations. In all, about 1,100 companies are licensed to take part within the authorized marijuana trade, together with cultivation, product testing, distribution and gross sales, in accordance with state information.
Increasingly, Native American tribes in Nevada have gotten licensed to develop, course of or promote marijuana, in accordance with Cassandra Dittus, co-owner of Tribal Cannabis Consulting group, which helps tribal entities enter the marijuana market.
Successful relationships solid between the consulting group and Nevada tribes resulted in improvement and operation of medical and leisure marijuana dispensaries by the Ely Shoshone Tribe in Ely, Nevada, and the Yerington Paiute Tribe in Yerington, Nevada.
Both have tribally run dispensaries that opened in 2018 and created about 15 new jobs every, with a possible for 40 to 50 extra full-time positions at every.
In April 2020, the consulting group additionally helped the Winnemucca Indian Colony open a marijuana dispensary that employed eight folks to begin and turned a revenue after simply three months of operation, regardless of providing solely curbside service for many of that point because of the COVID-19 pandemic. The dispensary has since generated tax revenues for the depressed colony economic system, and has helped pay for a brand new police station and spurred improvement of a brand new housing venture, Dittus stated.
The consulting group makes use of a proprietary seed-to-sale software program system it developed, and has years of expertise working with Native communities to assist tribes set up a sound regulatory framework, endure feasibility research, discover current or new buildings to be used and to determine and run cultivation and retail companies, she stated.
The consulting group has helped tribes construct and function cultivation services in rural areas that in any other case can be unlikely to see such vital infrastructure funding, and has repurposed current buildings to assist in neighborhood redevelopment, Dittus stated.
“TCC works with Native American tribes to better the entire community by helping them enter the lucrative cannabis industry,” Dittus stated. “TCC has the industry expertise to radically impact the quality of life for Native communities across the country.”
Dittus stated tribal sovereignty has enabled tribes to jot down rules and go legal guidelines extra shortly and at any time of 12 months, in contrast with state authorities.
“Where states have to pass laws in their legislative sessions, tribes have smaller governments that can move more quickly,” she stated.
Five Native tribes in Nevada are sanctioned for marijuana development and gross sales by the intertribal enforcement fee, stated Thom, the state regulator.
Tribes arrange their very own programs of regulation and enforcement of marijuana legal guidelines, typically working underneath the rule of thumb of imposing guidelines which are “as strict as if not stricter” than current state legal guidelines, Thom stated. The compacts signed with the state enable for authorized gross sales on reservations and likewise allow individuals who purchase marijuana merchandise on reservations to hold and use them off the reservation.
Just as states that had been early adopters of legalization have aided different states in organising efficient regulatory frameworks, Native tribes throughout Nevada have realized from each other in learn how to legally function companies that create jobs and tax revenues of their communities, Thom stated.
“It’s created a sisterhood of sorts between the tribes,” she stated.
One main profit for tribal marijuana companies is that the taxes collected on licensing and gross sales go on to tribal governments the place the enterprise are situated, Thom stated.
“They’re able to collect those tax dollars and funnel those right back to tribal nation specialty programs or education programs,” Thom stated. “They don’t have to turn that money over to the state so they’re able to use that money almost immediately.”
South Dakota News Watch is a nonprofit information group. Find extra in-depth reporting at www.sdnewswatch.org.