By: Caitlin Locurto – Hofstra Law School – Law Student Contributor
In December, 2014, the United States Justice Department issued a memorandum extending to American Indian tribes the same freedom to legalize the cultivation and sale of marijuana that the federal government had previously extended to the states: U.S. attorneys will no longer enforce federal laws prohibiting the growth or sale of cannabis on American Indian Reservations so long as the businesses engaged in marijuana distribution operated in compliance with the principles outlined in the Cole Memorandum. Dozens of the 326 recognized American Indian tribes have explored the possibility of capitalizing on this opportunity, but tribes may have more at stake than states when deciding whether to legalize marijuana. Far from a carte blanche for American Indian tribes to cultivate and sell marijuana, the 2014 Indian Country Memorandum dangles a potentially lucrative venture before a financially vulnerable population.
By way of background, the Cole Memorandum was issued to “guide the United States Attorney’s marijuana enforcement efforts.” While marijuana remains federally illegal, the DOJ indicates in the Cole Memorandum that its marijuana enforcement efforts will be focused on eight principles. Some of the Cole Memorandum principles are geared toward preventing the collateral damage traditionally associated with drug distribution. These include distribution of drugs to minors, funneling of revenue from drug sales to criminal enterprises, using firearms and other forms of violence in the course of distribution, and facilitating driving under the influence. Other principles are related to protecting states’ rights and preventing marijuana businesses from infringing on federal jurisdiction. These include preventing the transportation of marijuana from states where it is legal to other states, preventing growing marijuana on public lands, and preventing marijuana use and possession on federal property. While the Cole Memorandum is a guide for federal enforcement, it also has become a list of “what not to do” for marijuana proprietors in states, and in tribal territories, that have legalized marijuana.
The 2014 Indian Country Memorandum must be understood in the context of the interplay between state, federal, and tribal laws on American Indian land. Tribes are domestic dependent nations with sovereign powers. They have the ability to independently determine the extent to which marijuana is regulated, permitted, or criminalized on tribal lands. Tribes are subject to federal law, but are generally immune from state and local law. A huge caveat however, is Public Law 280, which grants certain state governments jurisdiction over tribal lands. In P.L 280 states, state laws banning marijuana laws may be enforceable on tribal land. To what extent a state has or has not legalized marijuana alters risk/return ratio for tribe-operated marijuana ventures. Three scenarios illustrate this point.
-1. States where marijuana is illegal for recreational and medical purposes.
In states where marijuana remains completely illegal, the enforceability of state laws prohibiting marijuana on tribal enterprises would depend on whether P.L. 280 applies. But even in states where P.L. 280 does not apply, marijuana ventures on tribal lands would be more likely to infringe on the Cole Memorandum’s admonition against transporting marijuana from areas where it is legal to states where it is not legal. Whether P.L. 280 applies or not, tribes risk federal prosecution. Tribes located in states that have not legalized marijuana for any purposes have the greatest risk of violating one of the Cole Memorandum principles, but they also have the greatest market advantage because they are the only distributers in the states.
-2. States where marijuana is legal for medical use.
Tribes that legalize marijuana for recreational purposes in states that have legalized marijuana for medical purposes only still have a market advantage, albeit reduced. The degree to which they risk of prosecution hinges on an unresolved issue: whether the distinction between medical and recreational marijuana is a criminal or a regulatory issue. Public Law 280 jurisdiction does not extend to matters that are regulatory in nature. The critical question, then, is whether state marijuana laws are regulatory in nature. If a court finds that the distinction between medical and recreational marijuana is a regulatory issue, the marijuana laws of that state would not extend onto tribal land. Thus, a state law legalizing medical marijuana may transform a normally criminal issue into a regulatory issue. Of course, the federal government may always choose to prosecute if Cole Memorandum priorities are jeopardized.
-3. States where marijuana is legal for recreation and medical use.
In states where both medical and recreational marijuana are legal, tribal market advantage is minimal. Tribal enterprises would compete with state-authorized marijuana distributors. Risk of prosecution is also lowest because the likelihood of violating a Cole Memorandum principle is greatly reduced. Tribes do retain some advantage over state-authorized marijuana distributors. For example, the federal government must engage in consultation before enforcing federal law on tribal land. Additionally, tribes have their own system of taxation and regulation, which may be more favorable to marijuana cultivation businesses than state regulatory and tax schemes.
The Flandreau Santee Sioux Tribe of Flandreau, South Dakota, was the first tribal nation to legalize marijuana. The growth, distribution, and consumption of marijuana would be illegal anywhere else in South Dakota, which, like many states, has not legalized marijuana. South Dakota state law enforcement cannot enforce state marijuana law on tribal land. Pursuant to the December 2014 Memorandum, American Indian Tribes located in states that have not legalized marijuana may grow and sell marijuana provided that distributors are in compliance with the Cole Memorandum.
The Flandreau Sioux hope that the marijuana business will generate much-needed revenue. In an interview with Time Magazine in September, 2015, Anthony Reider, President of the Flandreau Santee Sioux Tribe Executive Committee, said that plans were under way to transform a bowling alley into a pot lounge, modeled after an Amsterdam coffee shop, on tribal land. In it, customers could purchase one gram of marijuana at a time, and purchase or consume up to two grams of marijuana per day. The lounge would also include four rooms designated for medical marijuana treatments. New Approach South Dakota is a lobbying organization devoted to the legalization of medical marijuana. New Approach Director, Melissa Mentele, was “hopeful that the FFST facility would provide access to life-saving medicine . . . for the hundreds of suffering South Dakota residents” with conditions that can be treated or ameliorated with medical marijuana. To ensure compliance with the Cole Memorandum objectives, the movement of each marijuana plant would be tracked by a state-of-the-art barcode system from “seed to sale.” By taking advantage of the December memorandum before other tribes, Reider hoped that his people would be able to “corner the market.” Reider told Time Magazine that he hoped to host an event on December 31 to welcome the new year and celebrate making their first sales for consumption of marijuana. The Flandreau Sioux marijuana business was expected to generate approximately $2 million in profit each month.
In November, 2015, two months after the Time Magazine interview, the Indian Country Today Media Network reported that the Flandreau Santee Sioux Tribal Council voted to temporarily suspend its marijuana business plans. Later that evening, the first Flandreau Sioux marijuana crop was in flames. At the instruction of tribal officials, the tribal police destroyed the crop by burning all plants. The decision to suspend marijuana cultivation was in response to concerns (read: threats) raised by South Dakota state officials. South Dakota state officials, including Attorney General Marty Jackley, had been scrutinizing the Flandreau Sioux marijuana venture. Jackley noted that changes in tribal law are only binding and enforceable on members of that tribe; non-tribal members who consumed marijuana on tribal land could still be subject to prosecution under South Dakota state law. Even non-tribal members who were not transporting marijuana, but returned to South Dakota land with marijuana in their systems, would be violating state law. State officials also mentioned that jurisdictional issues were a “major point of concern.” After a consultation with the United States government, Seth Pearman, an attorney for the Flandreau Santee Sioux, released a statement saying that the temporary suspension is essential to the success of the Tribe’s marijuana venture. According to Pearman, “[t]he tribe will continue to consult with the federal and state governments, and hopes to be granted parity with states that have legalized marijuana.” Although the release ensures that the Tribe will continue to pursue its marijuana venture, the underlying message is that, even after the December 2014 memorandum, the guidance from the Cole Memorandum, and actual consultation with the DOJ, the tribal council was not sufficiently assured that customers and proprietors of marijuana businesses would be immune from federal prosecution, despite their best efforts to comply with existing guidance. Mentele commented that New Approach would continue to support the FSST “in their mission to provide safe, legal access within the reservation and within the guidelines of the Cole Memorandum.”
Like states that have legalized marijuana, American Indian tribes must weigh the potential economic boon of the marijuana business against the potential legal and social ramifications of participating in a federally illegal business venture. Proprietors that enter the marijuana business must consider that compliance with the Cole Memorandum does not absolutely guarantee immunity from federal prosecution. Changes in the social climate or political regime of the United States may create pressure new pressures for the federal government to enforce its ban on marijuana. A key difference between American Indian tribes and states is that American Indian tribes are economically vulnerable and may become dependent on revenue from marijuana sales. Unlike states, which are largely economically solvent without engaging in “risky business,” American Indian tribes have historically engaged in “vice” ventures, such as gambling to generate revenue. States that have legalized marijuana do not have to worry about economic dependence on marijuana ventures should the federal government decide to enforce marijuana laws. Tribes however, are at a greater risk of developing an economic dependency on a federally illegal activity.
 Memorandum from Monty Wilkinson, Director, Policy Statement Regarding Marijuana Issues in Indian Country (Oct. 28, 2014).
 Memorandum from James M. Cole, Deputy Attorney General, Guidance Regarding Marijuana Enforcement (Aug. 29, 2013).
 Controlled Substances Act, 21 U.S.C. §§ 812, 841, 844, 846.
 Jonathan Kaminsky, Indian Tribe Seeks Pot Business Ban in Part of Washington State, Reuters (Mar. 24, 2014).
 Pub. L. 83-280 (1953).
 Cabazon v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987).
 Sarah Sunshine Manning, Flandreau Santee Sioux Tribe Burns Crop, Suspends Marijuana Operation, Indian Country Today Media Network (Nov. 8, 2015).