Legal Marijuana Generates a Mixed Reaction with Native American Tribes Following the DOJ Decision

On Thursday, December 11, 2014, the United States Department of Justice changed the landscape of the legal marijuana industry. They did so by stating that Indian tribes across the country can now grow and sell marijuana for recreational use on their sovereign lands. The tribes must follow the federal guidelines in the four states where the drug has been legalized for recreational use.

The United States is home to 326 federally recognized reservations and 566 federally recognized tribes, most of which are located in states that ban the use of marijuana for recreational purposes.

A Mixed Reaction

Even though recreational marijuana has been a major success in Colorado and Washington from a revenue perspective, many Native American tribes want nothing to do with it. The Hoopa Valley Tribe in California has been trying to rid its land of marijuana growing for years. The Yakama Nation of Washington, whose tribal lands cover 1.2 million acres (1/5 of the state), strongly opposed statewide legalization for years and has been trying to ban marijuana on its land.

“The Cherokee Nation has zero interest in growing or selling marijuana,” said Amanda Clinton, communications director for the tribe. “Most importantly, all use of marijuana is still illegal in Oklahoma. The statement only means the DOJ won’t prosecute marijuana cases against the tribes.” Clinton said the Nation has not issued any official communication or opinion about the ruling because marijuana legalization is not a priority.

“People keep calling and asking about it,” she said. “We’re just saying that we are surprised by the opinion. We did not know of any political push for this. We were not aware that the DOJ was even considering it.”

In fact, only three tribes have said they would be interested in legalizing recreational marijuana. These tribes did not want to disclose their names, but are located in California, Washington and the Midwest.

A Waiting Game

Many tribes are in the process of evaluating the DOJ’s decision and will be discussing it with their respective councils. The Navajo Nation, whose lands stretch into New Mexico, Utah and Arizona, has been one of the tribes on the fence with marijuana. After the DOJ announced their decision, some tribal leaders came out in favor of allowing the sale of marijuana and some came out opposing it. Their split reaction reflects a common division on reservations around the country.

The Poarch Band of Creek Indians, whose tribal lands are in Alabama, are one of the tribes that are contemplating the idea. The Mohegan Tribal Council of Connecticut stated that they are “looking at numerous opportunities to diversify into new emerging markets.”

The decisions made by Native American tribes will be interesting to watch during 2015. The outcome could expand the legal recreational marijuana market from both a geographic and revenue perspective.

Outlook

When states consider legalizing marijuana for medical or recreational use the answer is not always clear. If the federal government provided any insight on the matter or had a list of guidelines to follow, the decision might be an easier one to make. For this reason, it makes sense that many tribes did not hop on board following the DOJ’s decision. Technical420 expects to see a number of tribes enter the legal marijuana market after they weigh the pros and cons of its legalization. This in turn, will lead to the opening of new markets in states where marijuana was previously illegal. If legal marijuana is successful in these new state markets and proves to be a new cash crop for the tribes, we may see those states enact their own policy for marijuana legislation. Any way you look at it, this new policy is great for the marijuana industry because even if it does not generate significant revenue for the tribes, it will prove to the state that the legalization of marijuana did not cause the sky to fall.

http://www.washingtonpost.com/news/morning-mix/wp/2014/12/12/native-american-reservations-now-free-to-legalize-marijuana/

http://www.washingtontimes.com/news/2014/dec/12/native-american-reservations-federal-ok-marijuana/

http://www.tahlequahdailypress.com/news/cherokee-nation-tribe-is-not-interested-in-marijuana-market/article_6b2409c2-910f-11e4-a647-d7e96136e753.html

http://whnt.com/2014/12/15/alabama-tribe-evaluating-decision-that-could-allow-pot-sales-on-reservations/

http://news.yahoo.com/tribes-tread-carefully-marijuana-discussions-190311492–finance.html

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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