Tribal marijuana resorts should give pause to legislators
Petitions certified by the Michigan Board of Canvassers have been circulating all summer to provide voters with a 2016 ballot initiative to legalize marijuana and, by September, one group — Michigan Cannabis Coalition led by a former Republican legislative staffer — was passing the half-way point of signatures needed for the statewide ballot proposal.
The Grand Rapids Business Journal exclusive report this week on marijuana growing and sales on sovereign Indian Tribal land, however, presents an interesting competitive business model to capture any marijuana sales revenues and what tax the state may or may not collect. The state clearly should be prepared for the new possibility of Indian tribal marijuana resorts that may or may not split revenues between tribes and state treasury.
The Business Journal report focuses on the National Center for American Indian Enterprise Development and the Jan. 1, 2016, opening of a marijuana resort on tribal lands of the Santee Sioux in South Dakota, where marijuana use remains illegal. Another tribe near Seattle, where both medical and recreational marijuana are legal, is negotiating a compact with the state in regard to revenue splits.
Business Development Director Blake Trueblood at the NCAIED told the Business Journal as states continue to face budget issues, “they are looking at the gaming industry overall and saying, ‘If we open it up wider, it could generate substantial revenues for us. We might be better off not giving tribes exclusive gaming rights.’”
Tribes in Michigan recently halted casino payments to the state when the state moved forward with online lottery games, in violation of most tribal compacts. The Michigan Economic Development Corp. in September cut 65 economic development staffers across the state because of the loss of tribal revenues to the MEDC related to tribal non-payments in the dispute.
Trueblood explained that, as more states renegotiate tribal compacts for more of the tribal gaming revenues, tribes are turning to marijuana sales and using the business model that created the tribal casinos.
Gun Lake Tribe spokesperson James Nye told the Business Journal the Allegan tribe “does not have interest in taking part” in the marijuana resort business.
Trueblood told the Business Journal the tribes see “a lot of parallels with Indian gaming … and tribal marijuana.” Michigan is home to 19 casinos owned and operated by 14 federally recognized tribes plus three state-licensed casinos in Detroit. The Bureau of Indian Affairs moved forward in September on the Little River Band of Ottawa Indians planned casino in Muskegon.
Michigan legislators need to prepare for such new business models, regardless of the success of the 2016 petition drive to legalize marijuana.