New York’s Cayuga Nation Native American tribe is preparing to launch an adult-use cannabis cultivation enterprise, months before state-licensed recreational pot retailers begin serving customers.
Under the Marijuana Regulation and Taxation Act (MRTA) passed by lawmakers last year, possession of cannabis became legal for adults in September. But regulators are still working to manage and license adult-use cannabis businesses, with retailers not expected to open until spring of 2023.
As sovereign nations, however, Native American tribal governments have the power to regulate cannabis production and sales on tribal lands. Last summer, the Shinnecock Nation on Long Island announced that it was beginning a commercial cannabis operation on its land. And now the Cayuga Nation, which is already the home of hemp and CBD brand Arrowhead Hemp, is also delving into the recreational weed industry.
Freeman Klopott, a spokesperson for the state Office of Cannabis Management, says that New York’s tribal nations have the right to enact and implement their own cannabis regulatory structure.
“Native Americans living on federally recognized, sovereign tribal land are legally allowed to operate dispensaries that are not regulated under the New York State cannabis law,” Klopott told Politico.
He also said the state “has the ability to enter into agreements with tribes through tribal compacts to integrate them into the state program if all parties can agree to terms,” although no tribes have established such an agreement.
Tribal lawyer Lee Redeye said that state regulators’ delay in implementing cannabis legalization presents an opportunity for tribal governments to get a head start on the recreational cannabis market.
“There’s a considerable amount of money to be made in the industry, especially with New York lagging behind,” said Redeye.
Cultivation Facility Under Development
The Cayuga Nation has decided to exercise its authority to self-regulate cannabis and is currently creating a cultivation facility at Gakwiyo Garden, the tribe’s 100-acre agricultural development in Seneca Falls, New York. The tribal enterprise currently grows more than 35 crops at Gakwiyo Garden, which includes a 3,000 square foot greenhouse.
The new cannabis cultivation facility will reportedly have 15,000 square feet of indoor growing area. Cannabis produced at the facility will then be packaged and sold at an undisclosed location on tribal land. The tribe is banking on the new financial endeavor to provide revenue for the tribe and employment opportunities for its members.
“Developing our cannabis business is the next step in expanding and diversifying the Cayuga Nation’s economic opportunities and providing long-lasting benefits to the community,” the Cayuga Nation of New York said in a statement to the Cornell Sun.
The tribe has contracted with Rochester-based architectural firm Bergmann Associates to direct an overhaul of the current Gakwiyo Garden greenhouse operation. Construction on the project is expected to begin early this year, with an anticipated completion date before 2023. Maria Stagliano, a spokesperson for the Cayuga Nation, said that the tribe has hired Jake Brewer, the former head grower for a Colorado-based cannabis company, to head the Cayuga Nation’s cannabis operation.
In its statement, the Cayuga Nation said that it would work with state and local officials to ensure a smooth rollout of its recreational cannabis venture.
“Our vision for the future of the Cayuga Nation remains focused on bettering the lives of our members, our community, and our neighbors,” the Cayuga Nation said in their statement. “As we venture forward in our economic development, we remain committed to working closely with local governments to ensure the health and safety of our community.”
Customers of tribal cannabis businesses will be able to avoid the state’s 9% cannabis excise tax tacked onto New York’s sales tax rate of 4%. But attorney Redeye fears the state government may eventually try to tax cannabis sales on tribal lands, a move that would likely result in a lawsuit in federal court.
“My suspicion is that, eventually, the state will seek to try to tax those sales,” Redeye said. “New York state is always greedy. New York state will always seek to extract revenue from tribes. It has historically, and I don’t expect that to end anytime soon.”