As Minnesota launches adult-use licensing this week, tribal nations stand to benefit from being early adaptors; industry experts predict it could bolster sovereignty and economic development within tribal nations.
Mitch Chargo, chair of Hinshaw & Culbertson LLP’s national cannabis practice, sees an opportunity for Northern Minnesota nations to increase their economies via cannabis as Mitch Chargo states in his recent blog.
Chargo believes cannabis markets provide one of the greatest advantages to tribal nations: They generate significant revenues. Chargo noted this potential benefit is especially enticing in areas with limited resources or that depend on federal funds and grants for economic strength – where tribes may need new revenue streams that strengthen their economies by tapping into cannabis markets as an economic engine.
Chargo noted that revenue generated through direct sales can help fund community needs such as education and healthcare services, creating employment for reservations in remote regions. Furthermore, industry growth brings jobs into these remote communities bringing additional economic advantages.
Factors which foster sovereignty for a population over time.
State officials have acknowledged they’ll need tribal growers and manufacturers to supply retail stores at first. Chargo had served as in-house counsel at one of Minnesota’s two medical marijuana manufacturers before entering political office herself.
Paula Savchenko cautioned against expecting too much cooperation between tribal- and state-licensed businesses, since their operations operate under two distinct frameworks. To that end, Savchenko noted:
As reported by Savchenko, there have already been issues with the implementation of state’s rollout. Officials recently had to review social equity applications for duplicates after applicants attempted gaming the system to increase their odds in an upcoming license lottery, according to Savchenko.
But Minnesota is moving forward and opening up a license window through March 14 with results expected by summer, Savchenko said. Unlike in other states, cities and counties in Minnesota don’t have the power to ban cannabis businesses outright, although they may impose license caps depending on population density.
Legality becomes murky when tribal and state cannabis markets intertwine, according to Chargo who noted that federal law places tribes in an unusual position.
As our Constitution has given Congress sole power over Indian affairs, states do not have authority over tribal governments or affairs on tribal lands unless expressly approved by Congress; furthermore, both tribes and states are considered sovereign and neither should be seen as subservient to one another.”
Savchenko said two Minnesota tribes have begun operations early, giving them time to iron out any problems before the larger market begins to expand.
“Let’s really ensure our compliance program and operational plans are effective,” Chargo stressed, noting the value in fixing issues before their impact becomes overwhelming and all employees become operationally dependent.
Regulators in Washington State are taking measures to ensure its existing hemp and marijuana rules don’t conflict with one another too heavily, creating what Chargo refers to as “distinct lanes” between both cannabis-derived industries.
“They created this kind of split or divide in the licensing apparatus,” Chargo noted, explaining how state has been scrambling ever since to figure out a way to regulate something they legislated unofficially; specifically citing hemp-derived market established during summer 2022 as an example.
Minnesota’s robust hemp industry will likely remain operating concurrent with its new marijuana market, according to Savchenko, with no restrictions imposed between them as other states have.
Tribal cannabis operators take the lead as Minnesota prepares to legalise adult-use sales – MEDCAN24
