By Brian Bahouth
Reno – Federal guidance contained in the “Cole Memo” and the “Wilkinson Memo” enable the nation’s federally recognized Native American tribes to implement their own programs for the regulation of marijuana; and Nevada Senate Bill 375 would allow tribal cannabis businesses to operate as part of the state’s medical and adult use systems of cannabis regulation. There are 27 federally recognized tribes in Nevada, and 13 have come together to form the Nevada Tribal Cannabis Coalition.
Under Nevada’s medical marijuana program more than 50 dispensaries and scores of associated grow and production facilities currently operate in locations around the state. Last November Nevada voters approved Ballot Question 2 (BQ2), and the Nevada Department of Taxation has until January 1, 2018 to write, adopt and implement a broad set of regulations to govern the production and sale of adult use cannabis products. The Senate passed SB 375 on April 25 by a 21-0 vote, and on Monday May 1, primary sponsor Senator Tick Segerblom (D-Las Vegas) presented the bill to the Assembly Government Affairs committee.
“It allows the governor to enter into compacts. The tribes are sovereign nations, as you know, so right now, they could technically have their own marijuana programs if they wanted to, but SB 375 allows them to participate in our medical marijuana program, through a compact between the governor and each tribe,” Segerblom said. “It would enable them to generate some economic interest. They operate in a lot of areas where there currently aren’t dispensaries or grows or anything. The Pyramid Lake Tribe is on the way to Burning Man, so you could see that that could be a million dollars a day just right there. Of course, you couldn’t take it on to the Burning Man property, but that’s a different story,” Segerblom chuckled.
Democrats control both the Senate and the Assembly, and so far this session, the majority of marijuana bills have passed out of committee and their house of origin on a party-line vote, but SB 375 is one of a few pieces of cannabis legislation with strong bipartisan support. During an April 6 hearing on SB 375 in the Senate Judiciary committee, Senator Michael Roberson (R-Las Vegas) took time to note his support for SB 375.
“I just think this is a momentous day, on day 60, I think there is a bill of Chairman Segerblom’s I am willing to support,” Roberson chortled.
Assemblyman Al Kramer is a Republican who represents Carson City. In January the Carson City government enacted a temporary moratorium on the issuance of “recreational” marijuana business licenses while the city awaits regulatory details from the state, and last November, BQ2 failed by a narrow margin in Carson City, but during Monday’s hearing on SB 375 in Assembly Government Affairs, Mr. Kramer said he likes the bill.
“I like a lot of what this does because, in a sense, what this will do, it’ll allow some of the counties and cities to say in a sense they can prohibit the sale of marijuana or the growing of marijuana so to speak, and yet have a reservation or tribe nearby that allows it. It is another political subdivision, so to speak, that has a way to allow it, without relying on the county or the city governments.”
Senator Segerblom agreed with Kramer’s assessment.
“And another thing it does, which a lot of these local towns are really excited about is,” Segerblom said. “Right now under state law, there can’t be any home grows, if there’s a dispensary within 25 miles, so for example if the Yerrington tribe had a dispensary that had marijuana products, then there couldn’t be any home grows within 25 miles of Yerrington, which currently there can be, so actually the local police are excited about this too, so it’s kind of a win win.”
During the April 6 hearing in Senate Judiciary, 13 of Nevada’s 27 tribes came forward as the Nevada Tribal Cannabis Coalition. Benny Tso is Chairman of the Las Vegas Paiute Tribe and the Nevada Tribal Cannabis Coalition.
“This (SB375) is going to be a great thing for the Nevada Tribes,” Tso told member of the Senate Judiciary committee on April 6. “The coalition that we have started is going to prove that the solidarity that tribes have come together for this. It’s going to be a true economic driver for tribes. For those tribes in rural areas, this is going to create capital. This is going to create jobs. This is going to create platforms for other things to come.”
Rural Nevada tribes largely depend on tourism while urban tribes like the Reno-Sparks Indian Colony have diversified their streams of income beyond smoke shops, and now the tiny nation is home to a Wal-Mart Super Center and a Mercedes dealership. With dispensaries adjacent in both Reno and Sparks, the colony is well positioned for cannabis.
The Las Vegas Paiute tribe governs land north of Las Vegas where they operate a mini-mart and smoke shop, but in January of this year the tribe announced it has partnered with an Arizona-based cannabis company, Ultra Health, to build a dispensary and grow facilities on tribal land. During the April 6 hearing on SB 375 in Senate Judiciary, Benny Tso said legal marijuana presents a distinct economic opportunity for the Las Vegas Paiute tribe.
“For us, down in Las Vegas, we’re not in the best part of town, but we have 56 tribal members. That’s it. That’s all we have,” said Tso. “This economic development opportunity is going to provide for our tribe and provide for our membership. It’s going to give us a chance to open up the enrollment process again … we have 56 tribal members … everything we do, we do it for our future, our future generations. We always talk about seven generations out. We don’t have that with the 56 members that we have now. We have maybe two. So this is going to create those opportunities for our tribe to grow and for us to go on and be successful.”
Tribes have the option to own and operate the marijuana businesses on tribal land, but commercial cultivation and processing of marijuana are highly technical areas of agriculture and botanical manufacturing, so the tribes would benefit from partnerships with experienced operators to not only comply with a demanding set of state regulations but to compete. During the April 6 hearing on SB 375, Benny Tso said a marijuana compact with the state would help tribes attract outside investment.
“Everybody that’s going to want come do business with the tribe, this is going to solidify it, and that doing business with tribes is real.
“If I can speak for the Nevada tribes, that’s one of the hardest things for us … is to have business with no-tribal, with non-natives. Because they see the sovereign boundary. They see those things, but this right here will, I think it will blow that out of the water and prove the point that business can be done with tribes.”
During Monday’s hearing in Assembly Government Affairs, Assemblyman Kramer asked Senator Segerblom about the distribution of tax collected by businesses on reservations. The details of exactly how much tax will be levied on recreational marijuana are officially forthcoming, but the initiative and current legislation would charge the marijuana farmer a 15 percent excise tax when cannabis is sold to a processor or retailer, and Nevada Governor Brian Sandoval has proposed legislation that would add a 10 percent tax on the retail sale of marijuana, but according to Senator Segerblom, should tribes operate marijuana businesses, it his intention that they collect and use revenue from cannabis taxes as they see fit.
“It’s my understanding that tribes are allowed to tax the same way that we on non-tribal land would, but that tax would stay with the tribe,” Segerblom said. “So like for example if they did the 10 percent excise tax if the governor required that, that money would be used for their own educational purposes as opposed to coming out into the General Fund. But the goal would be that they would tax and make a substantial amount of money on this process, but it would be used within the tribal community for their own needs, which theoretically, would then help us help the rest of the state which gives assistance to the tribes.”
Trent Griffith is Secretary/Treasurer of the Ely Shoshone tribe and Secretary of the Nevada Native Cannabis Coalition. Mr. Griffith spoke in support of SB 375 during Monday’s hearing and said his tribe and the Ely area sorely need a medical marijuana dispensary. Griffith said the nearest access to medical cannabis is a three hour drive away in Las Vegas.
“Through taxes and revenue we would be able to provide scholarships for the surrounding community as well as our own tribal members, and with the other revenue, we’ll be able to donate to sports programs in our community because they are in dire need of it. That’s something that these kids really need. Something that will get them so they are not going towards drugs and alcohol, and we could use this money to do that,” said Griffith.
Alan Mandel is Chairman of the Pyramid Lake Paiute Tribe and spoke in support of SB 375 at Monday’s hearing. Chairman Mandel said the tribe has a long and good relationship with the Nevada Department of Taxation and local governments regarding the collection of taxes. Compacts between state and tribal governments is not unusual, and 10 tribes have current gaming compacts with the state. According to Alan Mandel, and the Pyramid Lake Paiute tribe has worked fruitfully within the confines of such a compact since 1997.
“We have a fully capable Tax Commission that’s independent of the tribe, with its own court system, the whole bit,” Mandel told lawmakers. “Most of the revenue that comes in from the taxation goes to law enforcement, education and a lot of emergency response for us. As you know, Pyramid Lake is about 755,000 acres, and our number one industry is tourism, and so we need to ensure the safety and health of those individuals, and so we spend a substantial amount of our tax revenue protecting not only the environment but all the people who come out to the lake, all the visitors.”
Assemblywoman Dina Neal (D-Las Vegas) is a member of the Assembly Government Affairs committee and asked about potential conflicts between tribal and non-tribal police departments regarding legal marijuana. Chairman Mandel responded.
“We have MOAs (Memorandum of Agreement) with the local surrounding, Lyon County, Storey County, Washoe County with our police department, and so we already have a working relationship in place in order to do that. I’m sure we’ll have to work a little harder to supplement this because this is a new industry, a new area for us, but we’re fully supportive of this bill.”
Neal Tomlinson spoke on behalf of the Nevada Dispensary Association in opposition to SB 375 as written. Mr. Tomlinson reiterated an amendment proposed, but not adopted, in the Senate that would mandate the tribes maintain standards of marijuana regulation as stringent as state requirements.
“The reason this is important is because if you want to have and maintain like we do now, a safe and federally compliant marijuana industry, it’s essential that the tribes adopt regulatory standards such as testing, packaging, advertising, all those things that are at least as restrictive as those adopted by the state,” Tomlinson said during Monday’s hearing. “The proposed amendment requires that any agreement ensure that this is the case. Tribes have said on the record that they intend to do this anyway, so we think it’s a very good amendment to the bill, which we believe is also a good bill, especially with the amendment. The amendment does not require the tribes to comply with state law. They are free to adopt their own standards, as long as they are at least as stringent as the state’s. The amendment is no more an infringement of tribal sovereignty than any other requirement in the bill.”
Senator Segerblom responded.
“I fully supported the idea that he (Neal Tomlinson) brought forth and the Dispensary Association did, but when we brought it to the tribes, they were very concerned because of tribal sovereignty. They don’t want, in the statute, to be told anything about what they have to do or not do.”
The Assembly committee on Government Affairs took no action on SB 375 on Monday. The deadline for second house passage is May 26.