Michigan’s tribes trying multiple ways to enter cannabis market

The Bay Mills Indian Community near Sault Ste. Marie, Michigan is considering building a cannabis grow and processing facility on this site. (Bay Mills Indian Community)

The Michigan market is considered, within the cannabis industry, as an open and relatively regulated market. Now Native American tribes in the north part of the state are making a pair of moves which may open the market even more. But the tribes are making their entrances in different ways, each of which will have different ramifications for the state.

Sault Tribe Economic Development, which represents over 40,000 members, one of Michigan’s largest tribal groups, announced plans in August to allow Lume Cannabis to open a dispensary in Sault St. Marie, one of seven on tribal lands ranging from Petoskey and Mackinaw City north through the Upper Peninsula to Marquette and Delta Counties near Wisconsin. Meanwhile, the Bay Mills Indian Community, a smaller tribe with a few thousand members, announced plans to open a grow and processing facility on tribal lands near Sault. Ste. Marie, and possibly even a retail center and tasting room next to their casino, located about 18 miles from the city.

Without question, the Bay Mills Tribal plan is considered the most aggressive of the two, yet one that has some precedent created by tribes in western states.

“It was a process that states out west have already done,” Bay Mills tribal in-house attorney Whitney Gravelle, said in a recent video podcast. “We have other compacts with the state on gaming, tobacco, and taxes. It seemed like the natural course.”

“I’m curious to see whether the Federal administration will be tolerant of them doing this on their lands,” said Rick Thompson, cannabis legalization advocate and host of the Jazz Cabbage Cafe podcast that Gravelle appeared in. “Bay Mills tried to work with the state for over a year, to enter a compact, and the state did not do it.”

Native American tribes are considered sovereign nations, with American laws unenforceable on their lands except by treaty or compact negotiations. WIth over 570 federally recognized tribes in the United States, each one has a somewhat different series of agreements with the federal government, states, counties, and municipalities. Agreements include cooperation on and enforcement of laws, but also federal and state direct payments to tribes or social services subsidies in return for access to natural resources, for instance.

While the financial allure of cannabis’ fast growing market may be attractive, from a tribal perspective, it may not be worth upsetting a delicate balance of long sought agreements that ensure a decent quality of life for tribal members.

“Especially with state law, the fear there is that if we claim that sovereignty, say ‘Screw you federal government,’ The federal government can then say, ‘You’re right. We’ll also not give you all those grants and programs.’ Even though we can observe how the industry is going forward, we can have different [federal] departments come through and caution us, and say we’ll no longer support your housing or law enforcement if you’re mixed in [cannabis] in any way. That creates fear on tribal lands,” said Joel Schultz, executive director of Sault Tribe Economic Development.

The Bay Mills tribe tried to negotiate with Michigan, says Gravelle, but the state was non-responsive, so Bay Mills decided to go it alone.

“Shortly after we reached out to the state, we were told we couldn’t do it. We received various answers, and unfortunately the answer was just no, without having a reason to stop them. After a year and a half of trying to engage them in compact negotiations, we actually lost out on several investors who were going to work with us and help us build this up,” said Gravelle. “Once we started losing those investors and it didn’t seem like conversations were going anywhere, we decided we are sovereign, and we have the authority to do this on our own, so we’re going to.”

“I respect their decisions, because they are dealing with unclear paths. We’re all trying to figure it out. I wish them the best of luck because if they get there I’ll be right behind them,” said Sault Tribes’ Schultz. ”I think there’s risk and they have a bigger appetite.”

The power of tribal sovereignty cuts two ways: First, because they are not legally part of the United States, they can do whatever they choose on their lands. That power has an allure that excites Michigan cannabis advocates frustrated with how slowly many municipalities have moved on cannabis. The vast majority of Michigan’s 1,773 municipalities have chosen to opt out of cannabis  production and sales.

“Maybe that will help give a kick in the ass to some of the municipalities trying to do this. Maybe tribes and reservations will corner the market,” says Matt Abel, executive director of Michigan NORML. ”While these municipalities sit on their hands, the tribes are moving forward.”

The flip side of tribal sovereignty is legal agreements need to be negotiated at tribal boundaries. For instance, if cannabis is produced on tribal lands, whether or not it can be legally transported outside of the tribal lands needs to be worked out between each tribe and the State of Michigan.

“The real issue becomes anything we do on our own, on our lands. Once it goes off there, the state will have lots to say. They could prevent people from coming to us, to allow product off our reservation land. They could just enforce it,” said Schultz. “If I was a tribe, being bold, I’d have to consider what the state would react to it.”

Bay Mills’ Gravelle says they currently plan to produce cannabis products for shipment to other tribal lands for sale or consumption there. However, Bay Mills says they have not been able to negotiate a compact with the State of Michigan thus far.

In the meantime, Sault Tribes’ Shultz has advice for companies looking to do business with tribes.

“In order for us to benefit from a cannabis company on our lands, we have to make sure they are going to be successful. I want to know what’s unique about our land and what will happen when they come on and do business,” said Schultz. “We want to get involved in these relationships for wealth purposes; for jobs or revenue we can create. Not to help someone get cheaper land or help someone bypass a law for personal gain.”