Will Marijuana Be a Bigger, Better Industry for Native Americans Than Casinos?
Native American tribes are looking toward cannabis as their next big industry now that the green rush is here to stay. California company CannaNative is partnering or consulting with hundreds of tribes across Indian Country, including the Navajo Nation — the largest federally recognized tribe — to enter the weed market efficiently and legally.
CannaNative provides business development consulting to tribes that are interested in growing industrial hemp and creating other cannabis-based products for commercial purposes. With recreational pot legal on the entire West Coast, the Native-owned LLC is eyeing larger grow operations, CBD medication and other retail opportunities that could potentially uplift impoverished tribes and help create an alternative revenue stream outside the multibillion-dollar gaming industry. CannaNative already has partnered or consulted with more than 500 tribes across the United States in what could become the next big venture for Indian Country.
“California has the highest population of Native Americans and the largest concentration of Indian reservations of anywhere in the country,” says Anthony Rivera Jr., CannaNative founding partner and member of the Juaneño Band of Mission Indians in Acjachemen Nation of Orange County. “With the passage of Proposition 64, California sets the stage for the rest of the nation and Indian Country, as well.”
Cedric Black Eagle, CannaNative founding member and former chairman of Montana’s Crow Tribe, says Native people have a chance to bring business and much-needed income to their struggling communities. “They can see the window of opportunity to get into the business. A lot of tribes just want to make the most money.”
The idea behind using cannabis to boost individual tribal economies stems from tribes’ conflicted relationship with casinos. As of 2014, California has 72 Indian gaming facilities operated by 63 tribes. Those facilities earned a total of $7.3 billion, according to a recent report issued by Casino City. Located just outside L.A. on the much-traveled road to Palm Springs, the Morongo Band of Mission Indians and their gaming facilities are among the most popular in the Los Angeles region, generating an estimated $3 billion in local revenue, the tribe reports. Built in 2004, the Morongo Casino Resort & Spa is a $250 million veritable adult playground, providing roughly 3,000 jobs in various industries, with holdings in everything from gaming and restaurants to agriculture and manufacturing. This cushion allows the Morongo to provide community enrichment programs, and even contribute $250,000 to people affected by the recent San Bernardino shootings.
While some gaming sites, such as Morongo’s and the nearby Pechanga Resort & Casino in Temecula, rake in millions of dollars annually, the current industry prevents countless tribes from building casinos on their lands, Black Eagle says. His tribe, for instance, is located in rural Montana, far from any urban center or tourist attraction. As a result, gaming isn’t a viable option for his tribe because, like any hotel or resort, casinos are population-based business ventures. Tribes nestled deep in rural regions can’t draw the kind of clientele easily available to those closer to cities.
To counterbalance that problem in California, the Legislature ratified 61 compacts with Indian tribes that stipulated nongaming tribes or those operating fewer than 350 gaming machines would each receive $1.1 million annually from a Revenue Sharing Trust Fund administered by the California Gambling Control Commission. In other words, gaming tribes would contribute a portion of their revenue to be distributed among nongaming tribes statewide.”One million dollars is a lot of money to an individual, but for a government that is trying to operate and build roads and infrastructure, $1.1 million is not a lot,” says Susan Jensen, executive director of California Nations Indian Gaming Association. “It’s helpful, but it still doesn’t make them self-sufficient. Other business opportunities is always something tribes are looking for.”
CannaNative works with tribes like Black Eagle’s remote Montana community to rev up their economies through marijuana.
“With cannabis it’s different, because everybody is on a level, even playing field,” Black Eagle says. “Not everyone is equal in Indian gaming.”
Black Eagle and other tribal chairmen working with CannaNative see pot as an untapped resource. Gaming revenue throughout Indian Country nationwide exceeded $28.9 billion in 2014, according to the Indian Gaming Industry Report. That same year, when Colorado and Washington legalized recreational weed, those states brought in $700 million and $67.5 million, respectively, in revenue, Bloomberg reports. Now that California, Oregon, Massachusetts, Nevada, Maine and Washington, D.C., have recreational pot on the books and more than a dozen other states recognize medical marijuana, CannaNative is hoping to connect indigenous communities to this cash stream.
“They did a pretty good job building up the Indian gaming industry over the last 30 years,” Rivera says. “We believe the Indian cannabis industry will far exceed the Indian gaming industry as we move along.”
Part of the problem with Indian gaming, Rivera says, is how little return tribes see of their own money. With cannabis cultivation, tribes can assert more control over their economic destiny. “Gaming involves contracts with the state and distribution to other gaming companies,” he says. “We’re hoping through cannabis, tribes will retain more revenue.”
Yet some tribes acted too soon on marijuana cultivation, Rivera adds. By hurrying to join the green rush and planting crops, these tribes have opened themselves up to raids by the Drug Enforcement Administration. Just last year, federal agents descended on the Menominee Tribe in rural Wisconsin and confiscated 30,000 cannabis plants. According to local news outlets, tribal leaders were “confused and alarmed,” and insisted the plants had been legally grown for research on industrial hemp, which can be used for fiber, food and oil. Raids by federal agencies on Native lands is a particularly contentious issue within American Indian communities. The 1973 Wounded Knee incident, where FBI, U.S. Marshals and the National Guard enacted a sometimes violent standoff with protesters, and the current protests in Standing Rock are front of mind.
CannaNative was founded in 2015 to avoid this legal challenge. It was formed by a consortium of tribal leaders after the Department of Justice issued a memo allowing hemp cultivation on tribal land. In essence, the Wilkinson Memo gave tribes the same power that states have to set their own weed laws. The goal of CannaNative is to encourage economic development and help tribes legally enter the cannabis market.
“Native Americans have a long, rich cultural history with natural medicines and remedies that come from Mother Earth,” Rivera says. “This is an extension of that.” In fact, before European colonists came to the Americas, tobacco was part of spiritual ceremonies, and used as a pain killer by pre-Columbian doctors and shamans. In the early Virginia colonies, such as Jamestown, tobacco was even used as a form of currency to trade with the native people. Tobacco quickly became an essential cash crop for colonists, sprouting America’s early form of capitalism, which led to the Southern plantation system.
Indigenous people lost control of their spiritual plant. But now marijuana could become a way for tribes to reconnect with their ancient economy.
In addition to offering legal aid to tribes interested in entering the weed market, CannaNative develops its own line of CBD (cannabidiol) products, hemp oils and other marijuana-based goods to sell commercially. For tribes looking to grow weed, CannaNative helps source seeds, buy equipment, develop distribution models and even teach cultivation best practices.
Poverty runs rampant on many reservations throughout the country, and CannaNative hopes cannabis can help combat that. For instance, the Pechanga Band of Luiseño Indians reported a 91 percent unemployment rate in 2013, according to the Indian Country Today Media Network. The poverty rate among American Indians lingered at 23.6 percent during the 2009 U.S. Census, which reported that 32.4 percent of Native American and Alaskan Native youth live below the poverty line, according to the Center for Native American Youth at the Aspen Institute. The report also found that the average household income for tribal homes is $33,000.
Marijuana provides an attractive opportunity to bring in revenue and also tackle some of the health disparities plaguing the poorest reservations. “We have one of the largest, highest levels of … diabetes, heart disease, arthritis,” Rivera says. “We wanted to provide possible solutions to solve that health disparity.”
Recreational pot is still taboo among many tribes, just as it is among some non-Native Americans. It is seen as something to be reviled and avoided despite a tribal connection to Mother Earth. Countless reservations battle fatally high levels of alcoholism and drug addiction. According to the Aspen Institute, “Alcoholism mortality rates are 514 percent higher than the general population. Suicide rates are more than double, and Native teens experience the highest rate of suicide of any population group in the United States.”
Because of these alarming statistics, some in Native communities are resistant to the idea of marijuana, which presents a major roadblock to building a new cannabis-based economy. “Today the older generation are still looking at marijuana as a gateway drug,” Black Eagle says. “The younger set is using and researching medical marijuana, but it’s still a cultural struggle.”
That’s why CannaNative will first tackle industrial hemp. Relatively benign thanks to its barely detectable THC levels, industrial hemp can be used in the manufacturing of clothing, oils, food and even construction materials. Total retail value of hemp products in 2013 totaled approximately $581 million, according to the Hemp Industries Association. CannaNative is hoping to capitalize on this growing market by partnering with Southern California–based Medical Marijuana Inc. to produce oil products from more than 560 tribes. Its deal with the Navajo Nation will expand Indian hemp production to tribal lands in Arizona, Utah and New Mexico.
“We have the land and we have the water. We believe this is the best opportunity for Indian tribes to look. We’re not fly-by-night,” Black Eagle says. “We are approaching cannabis as economic nation-building.”