From Marijuana Moment by Ben Adlin September 7 2023
The Eastern Band of Cherokee Indians (EBCI) passed a referendum Thursday in favor of legalizing marijuana, becoming the first jurisdiction within the borders of North Carolina—or any of its surrounding states—to commit to the policy change. But it will be a while before would-be customers can make a purchase.
According to unofficial results posted by the EBCI’s Board of Elections, members approved the measure by a margin of 70 percent to 30 percent. Although the referendum does not legalize cannabis automatically, tribal leaders have said they’ll follow voters’ lead when they ultimately take up the issue.
The referendum asked the tribe’s enrolled members, “Do you support legalizing the possession and use of cannabis for persons who are at least twenty-one (21) years old, and require the EBCI Tribal Council to develop legislation to regulate the market?”
Sales would be open to all adults over 21, regardless of tribal membership.
Passage of the measure is simultaneously an assertion of the tribe’s autonomy and a calculated risk. Some Republicans, including U.S. Rep. Chuck Edwards (R-NC), had warned the tribe against legalization. Ahead of the election, Edwards authored an op-ed in the tribal news publication, Cherokee One Feather, in which the he said legalization on the tribal land “would be irresponsible, and I intend to stop it.”
EBCI Principal Chief Richard G. Sneed called the move “a big misstep.” He told Marijuana Moment that he believed pushback from Edwards and others may have emboldened tribal members to support the measure.
“The worst thing that a non-Indian elected official can do is tell a sovereign, federally-recognized Indian tribe how they ought to handle their business,” Sneed said in an interview.
Edwards last week followed up on his threat by introducing in Congress the Stop Pot Act, which would cut 10 percent in federal transportation funding from all tribal governments, as well as U.S. states, with legal recreational marijuana.
But EBCI isn’t flinching. “I can tell you that, in D.C. right now, a bill like that would go nowhere,” Sneed said.
Rob Pero, founder of the Indigenous Cannabis Industry Association (ICIA), applauded the tribe’s handling of the measure.
“How EBCI has approached the referendum and determined their course of action is a great example of what sovereignty can look like when it’s done in a good way,” he told Marijuana Moment in an email. “This is just one small aspect of their government, but this is a powerful opportunity to showcase what that actually means for government-to-government relations in an emerging industry.”
Pero noted that while the vote may be over, the next steps might be even harder. “We will continue to monitor and be there for them,” he said, “as they have a lot to navigate and the roadblocks they’ve encountered in pursuing this initiative, specifically around the feasibility of jurisdictional issues surrounding transportation, may still be looming.” (EBCI is not a member of the ICIA.)
Marijuana legalization on EBCI’s 57,000-acre Qualla Boundary is expected to eventually bring in millions of dollars in revenue for the tribe. Forrest Parker, general manager of the tribe’s cannabis company, Qualla Enterprises LLC, said in July that “If adult-use were legalized, revenue could conservatively reach $385 million in the first year and exceed $800 million by year five,” according to a Cherokee One Feather report.
Already the Qualla Boundary is the only place in North Carolina where medical marijuana is legal. The Tribal Council passed regulations for the system in 2021, and it opened registration to all North Carolina residents this past June. Projected revenue from that program “starts at $206 million and approaches $578 million by year five,” Parker said.
But after growing nearly $30 million worth of product, Qualla Enterprises has yet to make a single sale. Instead the tribe has run into numerous delays over obstacles such as marijuana transportation, lab testing and banking.
Part of EBCI’s production procedure involves transporting medical marijuana along a short stretch of state-owned roadway, which Swain County officials have said presents a problem. And despite the need to test marijuana products for quality and safety, the tribe-approved testing lab is months behind schedule.
Sneed has attributed the issues to a “lack of foresight” by the tribe’s non-native vendor. “The program is probably six months or more behind schedule,” he said, adding that he expects the tribe’s governing board over Qualla Enterprises will be “taking the appropriate action to have these situations rectified.”
Actual sales of medical marijuana, tribal officials recently told The Charlotte Observer, currently aren’t expected to start until later this year.
There’s clearly strong interest in the program. The night before Thursday’s vote, hundreds of people lined up outside the tribe’s medical dispensary, Great Smoky Cannabis Company, for a three-hour open house. “A lot of people are curious about what we’re doing, and a lot of people are coming out to show support for what we’re doing,” said plant technician Jared Panther.
Qualla Enterprises itself has also been trying to build support for the expansion into adult use. A sign on the dispensary building facing the freeway reportedly reads, “Vote Yes! for Adult-Use.”
The company also published an op-ed in Cherokee One Feather this week championing the benefits of adult-use sales, comparing the opportunity to when, “thirty years ago, the Cherokee People decided to build a casino.”
“This was highly controversial at the time, in part because nowhere in the surrounding region allowed gaming,” it says. “But we were not afraid to be different. Harrah’s Cherokee Casino has benefited this Tribe and its members in more ways than we ever imagined.”
Expanding eventual marijuana sales to all adults would create “400 new and well-paying jobs right here in Cherokee,” the company said, the majority of which would be filled by enrolled members. Currently 84 percent of cultivation employees are tribal members, “which represents the highest of any business owned by the tribe.”
A third-party analysis projected legalization could also generate thousands of dollars in payouts to individual tribal members, who share in the proceeds of tribe-owned businesses. In the first year of legal sales, payouts could be “as high as $5,600″—a number that could climb as high as $12,000 after five years.
“This amount is 50 percent larger than what payouts under a medical cannabis-only system could be,” Qualla Enterprises said. “Plus, when North Carolina, South Carolina, Tennessee, and other states eventually follow the Cherokee’s lead and legalize Adult-Use Cannabis (as they will), our employees will have unrivaled experience.”
The op-ed also pointed to a statewide poll that found 73 percent of North Carolina residents support legal medical marijuana. And it cited estimates suggesting the state’s illicit cannabis activity amounted to nearly $3.2 billion in 2022.
At the state level in North Carolina, a Senate-passed medical marijuana bill stalled in the House this session, the casualty of an informal rule that requires bills to have support from the majority of the chamber’s Republican caucus in order to bring them to the floor. It’s still possible the legislation could be taken up next year.
“It’s a policy change—a major policy change here in the state—and there’s passion on both sides,” House Majority Leader John Bell (R) said in July. “We have members of our caucus that are 100 percent supportive of it and we have other members that are 100 percent against it.”
Sneed, in the interview with Marijuana Moment, noted that many state lawmakers have expressed interest in EBCI’s marijuana operation and have even toured the site, including the North Carolina House and Senate majority leaders as well as House representatives of both political parties. “North Carolina has toyed with the idea of a medical bill for the last two sessions,” he noted. “We thought it was going to pass.”
Despite the public flap between EBCI and outside critics of the referendum, Sneed emphasized that cannabis is just one piece of the tribe’s relationship with state and local officials. And from where he sits, it represents “very little” of the whole.
“While it seems to be a big issue in the media, it’s kind of a blip on the radar screen. You know, this doesn’t come up that often in our discussions,” he said, then added: “Maybe it’s the elephant in the room, I don’t know.”
Tribal governments in a handful of U.S. states have entered the marijuana business as more jurisdictions legalize. Notably, in Minnesota, where state lawmakers passed an adult-use marijuana program earlier this year, tribes are leading the way.
The White Earth Nation voted in July to authorize marijuana sales and has since opened an adult-use cannabis shop. And the Red Lake Nation, which also began sales in August, recently announced plans to launch a mobile marijuana retailer—effectively a cannabis “food truck” that can travel and do business on tribal land throughout the state. Another tribe located within the state, the Leech Lake Band of Ojibwe, is also moving to legalize.
Under Minnesota’s marijuana laws, the state’s governor can also enter into compacts with tribal governments, allowing them to operate on non-tribal land within the state. Many have seen that option as a way to allow the sale of legal cannabis in Minnesota ahead of state licensing, which isn’t expected until 2025. Cannabis regulators said last month that “several” tribes have expressed interest in the arrangement so far.
It’s believed that in 2020, the Oglala Sioux Tribe, located in South Dakota, became the first tribe to vote to legalize marijuana within a U.S. state where the plant remained illegal.
Comments are closed.