California Tribes Expanding From Casinos To Cannabis

marijuana crops in greenhouse

California tribes are already the only people in the state that can operate California casinos. That market exclusivity serves them well. With that in mind, some tribes are thinking about another exclusive market: marijuana.

Santa Ysabel turned failed casino into marijuana greenhouse

While Las Vegas casinos are distancing themselves from the soon-to-be-legal marijuana dispensaries in Nevada, California tribes do not have to worry as much about regulations.

While regulated marijuana faces major tax questions at the state level, tribes are realizing they can set their own parameters for the industry. More than one California tribe is getting in on the action already.

The Santa Ysabel tribe tried and failed to operate a casino in the crowded San Diego casino market. Now the group is putting the closed casino space to use as a greenhouse.

The tribe started the Santa Ysabel Cannabis Regulatory Agency and Cannabis Commission and proceeded to start growing marijuana in the space in early 2015. Santa Ysabel works with several dispensaries in California. The Sunshine State is one of 29 states where medicinal marijuana is legal.

The federal government has its eyes on Santa Ysabel. However, the tribe does not appear to be violating any state laws. This means, for now, there is nothing stopping them.

Seminoles in Florida also partnering with marijuana vendors

Elsewhere, the Florida-based Seminole tribe is getting into the marijuana game as well. The tribe recently partnered with cannabis development company called Electrum Partners. In a recent Forbes article, Leslie Bocksor, who founded Electrum Partners, explained the appeal of the deal:

“Investors, cannabis industry entrepreneurs and American Indian tribal governments have reason to rejoice over a 50%-60% competitive advantage in cash flow and federal taxes… We believe in tribal sovereignty and its advantages for tribal economic development, thus by adding tribal sovereignty as an economic advantage, we simply decrease the cost and increase the profits for every business partner who takes advantage of the structure we’ve set up.”

Without involvement from the US government, the tribes can establish regulations for their own marijuana industries which give them a massive edge in the burgeoning industry.

Marijuana not without its concerns

Many tribes may be enthusiastic about expanding into a new industry, but it is not without risks. A tribe in South Dakota learned that the hard way.

The Flandreau Santee Sioux started planting marijuana on tribal lands two years ago. This month that went up in smoke–literally. Facing pressure from federal and state officials, the tribe pulled the plug on the project. The Sioux burned their crops rather than face charges.

In other words, the law being in a gray area is a blessing and a curse. It gives tribes room to expand into the industry, yes. However, it also puts them at risk for legal action too.

Jessica Welman

About

A graduate of USC and Indiana University, Jessica Welman has long been involved in the poker industry. She has worked as a tournament reporter for the World Poker Tour, co-hosted a podcast for Poker Road, and as the managing editor for WSOP.com.