L.A. Weekly’s Native American Issue last week explored the possibility that legalized marijuana might be a bigger “white buffalo” for many tribes than gaming has proven to be.
Many tribes are looking hard at cannabis growing, especially in California, which has more tribes and tribal land than any other state. Three weeks ago voters approved Proposition 64, which lifted the remaining state laws against growing and using marijuana.
The article followed CannaNative, a Native-owned LLC that is leading the way for marijuana not only in the Golden State but with hundreds of tribes. It acts as a partner or business development consultant with tribes exploring pot and industrial hemp cultivation.
Now that the voters on the entire West Coast have lifted the ban on pot CannaNative is focusing not just on recreational pot cultivation but also medical uses and retail. All activities have the potential to lift poor tribes that haven’t had the ability to build casinos out of poverty. But it also has the opportunity for gaming tribes to make even more money.
So far the company has consulted with 500 tribes nationwide. Anthony Rivera Jr. a founding partner of CannaNative, told L.A. Weekly: “California has the highest population of Native Americans and the largest concentration of Indian reservations of anywhere in the country. With the passage of Proposition 64, California sets the stage for the rest of the nation and Indian Country as well.”
Another founding member, Cedric Black Eagle, former chairman of Crow Tribe of Montana, said that Indians, “can see the window of opportunity to get into the business. A lot of tribes just want to make the most money.”
California has 63 gaming tribes that operate 72 casinos, which earn a total of $7.3 billion. Some of those casinos are extremely successful, such as the Morongo Casino Resort & Spa in Southern California, which generates $250 million a year, employs 3,000 workers and operates many non-gaming facilities, including farms, restaurants and factories.
But not every tribe can come even close to that kind of success. California addressed this issue by negotiating compacts that the non-gaming tribes get money from the Revenue Sharing Trust Fund. However, the amounts disbursed from that fund a relatively small: about $1.1 million per year per tribe.
Newly installed California Nations Indian Gaming Association Executive Director Susan Jensen told L.A. Weekly: “One million dollars is a lot of money to an individual, but for a government that is trying to operate and build roads and infrastructure, $1.1 million is not a lot. It’s helpful, but it still doesn’t make them self-sufficient. Other business opportunities are always something tribes are looking for.”
The difference between cannabis growing and casinos is that all tribe start out on a relatively even playing field. CannaNative can work with tribes that are in remote reservations where a casino would never be practical. And it is possible that pot growing could ultimately dwarf gaming as a source of income for tribes.
Although gaming revenue from Indian casinos nearly reached $29 billion in 2014, during that same year, when Colorado and Washington legalized recreational pot use, they collected a total of $767.5 million. Now with states lining up to legalize pot, CannaNative hopes for tribes to tap into that wealth.
Unlike gaming, tribes won’t have to hire third parties to operate their pot businesses. They will have a direct control over their business—and keep a much larger percentage.
Some tribes made a mistake and tried to jump into the business too soon, which brought about raids from the federal Drug Enforcement Administration.
CannaNative formed in 2015 to avoid this problem. What made it possible was a memo from the Department of Justice saying that Indians could grow hemp on tribal land. This basically equated tribes with states in their ability to set their own laws. Marijuana remains illegal under federal law.
Says Black Eagle, “We have the land and we have the water. We believe this is the best opportunity for Indian tribes to look. We’re not fly-by-night.”
