On May 30 Minnesota became the 23rd State to legalize recreational cannabis. It joins a much smaller list of states that included Tribes in their cannabis regulatory scheme.
One perk that Minnesota Tribes will enjoy under this new law (that is not the case in Washington state) is that Tribes can enter into tax agreements to keep certain taxes from Tribally owned off-reservation retail cannabis locations, which can make expanding a Tribe’s brand to off-reservation locations much more attractive. The team at mctlaw are experienced negotiators with Tribal-State compacts, including cannabis compacts. We have drafted many tribal codes and ordinances expanding the regulatory authority of Tribal Governments including tribal cannabis codes and advising tribal cannabis businesses.
Minnesota has followed a path similar to Washington’s, that allows Minnesota Tribes to compact with the State of Minnesota to resolve any lingering jurisdictional issues. The bill to legalize cannabis also makes it clear that Tribes retain the sovereign authority to regulate both medical and recreational cannabis within the Tribe’s jurisdictional territory and that compacting is not required in order for a Tribe to support cannabis businesses and medicine or to participate as a state licensee.
However, Tribes may still find a benefit to compacting with the State to help create certainty that any activity authorized by the Tribe, provided it falls within the parameters of the compact, will not face any action by the State of Minnesota. Of course, Marijuana remains a schedule I controlled substance under Federal law, and neither the State law nor a compact would entirely shield a tribe from federal enforcement, though we haven’t seen that in States like Washington, where the Tribes and States work cooperatively to regulate cannabis within the State boundaries.