The Seneca Nation joined the growing list of tribes who have expressed interest in the legal marijuana industry. Seneca Nation President Maurice John, Sr., recently discussed his views on the industry and said the tribe has been monitoring it closely from the sidelines.
A Waiting Game
In December 2014, the United States Department of Justice said Native American tribes can grow and sell marijuana on sovereign lands. The tribes must follow the federal guidelines in the four states where it is legal 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. Many tribes are in the process of evaluating the DOJ’s decision and will be discussing it with their respective councils.
First tribe enters legal marijuana industry
In mid-June, the Flandreau Santee Sioux Tribe became the first reservation in South Dakota to legalize marijuana. The tribe was also the first Native America tribe to legalize marijuana in a state where the use and sale of marijuana is illegal.
The tribe hired Monarch America Inc. (BTFL) to design, construct and develop a grow facility on the Flandreau reservation and the company expects it be open by the first week of December.
South Dakota Attorney General Marty Jackley is not happy with these recent developments and he called the Justice Department’s Cole Memorandum “a complex directive that has created confusion on the tribal front.”
The Cole Memorandum outlined acceptable conditions under which Native American tribes could produce and sell marijuana.
Tribe is changing the South Dakota legal landscape
Although Attorney General Jackley is not pleased with the announcement, he recently proposed a bill that would decriminalize the possession of up to one ounce of marijuana in South Dakota. The state can soon start collecting signatures to place the issue on the November 2016 ballot.
If the measure is approved by voters, the possession of up to one ounce of marijuana would no longer be a crime. Adults 18 and older would be subject to a $100 fine and must forfeit their marijuana. The fine would double if it is not paid within 90 days.
Currently, the possession of up to two ounces of marijuana is a Class 1 misdemeanor in South Dakota, punishable by fines up to $2,000 and a year in prison. The proposed initiative would not change penalties for the possession of more than one ounce, however, the possession of more than one ounce but less than two ounces would remain a misdemeanor (more than two ounces would remain a felony).
Under South Dakota law, the Attorney General is responsible for preparing explanations for proposed initiated measures, referred laws, and South Dakota Constitutional Amendments. Specifically, the explanation includes a title, an objective, clear and simple summary of the purpose and effect of the proposed measure and a description of the legal consequences. You can view Attorney General Jackle’s explanation here.
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.
The outcome of the Flandreau Tribe’s marijuana plans will serve as a catalyst for other tribes if it proves to be successful. The success of this project may also serve as a catalyst to Monarch America (BTFL) because the company will see increased demand for its services from other tribes.
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Authored By: Michael Berger
Michael Berger is the president and founder of Technical420, an independent research firm focused specifically on the cannabis sector. He was working for the equity research department at Raymond James Financial Inc., when he recognized a need for a service that provides up-to-date research and analysis on companies that operate in the cannabis industry. Mr. Berger studied finance and economics at Florida State University and is working toward achieving his CFA charter.
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