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Members of the Confederated Tribes of Warm Springs will vote Thursday on a proposal to grow and process marijuana on the reservation and sell the product at tribal-owned stores in Portland and other Oregon cities.
If the referendum passes – and the state signs off on the plan – Warm Springs would be among the first tribes in the country to enter the commercial cannabis market. The tribes expect to have results Friday.
It’s a trend fueled by a federal memo issued last year that said the government would treat tribes as they do states when it comes to legal pot. But debate over cultural, economic and health risks, as well as complex legal issues, has most Native American tribes moving slowly on marijuana initiatives.
Warm Springs is the first in Oregon, home to nine federally recognized tribes, to put the issue to its members.
The tribes’ proposal calls for a production and processing facility on about five acres of the tribes’ 650,000-acre reservation, the largest in Oregon. Marijuana would be grown in a greenhouse that would range from 10,000 to 36,000 square feet, said Don Sampson, CEO of Warm Springs Ventures, the tribes’ economic development corporation and the group behind the proposal.
Sales would only be allowed off the reservation at three stores operated by the Warm Springs, he said. The proposal would not change the law on the reservation, where marijuana remains illegal.
The enterprise would be operated by the tribes, which would work with outside investors and a Colorado marijuana company that would help run the facility at first, said Sampson.
The goal, he said, would be for the tribes to take over operation of the facility within three to five years.
Oregon’s recreational marijuana program will be regulated by the Oregon Liquor Control Commission, but the Warm Springs facilities would be overseen by the tribes, which would establish a cannabis commission, said Sampson. He said Warm Springs’ regulations would be consistent with those of the state.
“We want to make sure our products are the best quality,” he said. “Integrity and safety are important to us.”
Vote is just a first step
Sampson said 3,300 voters are eligible to participate in the referendum. At least 1,100 members have to vote for the referendum to be valid. He said about one-third of members live off the reservation and that dozens have already mailed in their ballots.
A spokesman for Gov. Kate Brown this week called the vote “the first step” in the process of entering Oregon’s marijuana market. Chris Pair, a Brown spokesman, said if Warm Springs approves the proposal, the tribes would start discussions with the governor’s office about “how to move forward, whether in the form of a compact or otherwise, in a way that ensures a safe and transparent entry into Oregon’s marijuana market.”
Backers have emphasized the potential windfall a marijuana operation could generate for Warm Springs, where tribal members’ economic status is generally grim.
According to the latest U.S. Census data for the tract that includes the Warm Springs reservation and some of the surrounding area, about 60 percent of people 16 and older don’t work. About two-thirds of households receive food stamps. The median income for a family living on the reservation is $ 47,600 – 30 percent below the median income for Oregon families.
Sampson predicts that the tribes’ marijuana business will create 85 jobs at the beginning and will generate an estimated $ 11 million in the first year and $ 27 million by the fifth year. Pay will range form $ 12 an hour for entry level workers to $ 65,000 to $ 85,000 a year for management positions.
Ten percent of the revenue generated by the enterprise will go toward law enforcement, health and welfare programs and alcohol and drug prevention and rehabilitation, Sampson said. The rest will go toward tribal services.
“This will boost revenues for health and education and housing and those are all critical needs,” he said.
Risks, legal issues debated
The federal government has taken a largely hands-off approach to legal marijuana in states like Washington and Colorado, both home to robust recreational cannabis industries.
Justice department officials have said their marijuana enforcement decisions are guided by priorities that revolve around issues like keeping the drug from minors and out of organized crime.
The federal government’s memo on treating tribes’ marijuana businesses as it does states with legal marijuana markets touched off “a real big gold rush bonanza mentality” among tribal leaders, not to mention investors, nationwide, said Robert Williams Jr., a professor at the University of Arizona’s James E. Rogers College of Law and an authority on Native American law.
Tribes in general have few options for economic development due to a variety of factors that often include remote locations and lack of an educated workforce, said Williams. Often desperate for revenue and out of options, tribes pursue businesses like gaming, payday loans and now marijuana – “all the vices that white society doesn’t want to mess with,” he said.
“It’s the only avenue, the only niche for economic development,” Williams said. “I can promise you the Warm Springs tribal leadership would rather have an alternative to growing marijuana.”
Growing and selling pot comes with risk, especially for tribes, where the federal government has powerful influence. Marijuana, after all, remains illegal under federal law. What’s more, while the current administration has tolerated legalized marijuana in Colorado and Washington, the next president may take a harder line.
Randolph Barnhouse, an attorney in Albuquerque, N.M., who specializes in Native American law, said the prospect of entering the marijuana market has generated a lot of attention among tribes nationally, but he estimated that no more than a dozen are actively engaged in the industry.
“The guidance (from the U.S. Department of Justice) doesn’t change the fact that it’s illegal under federal law,” he said. “The state of Oregon’s law doesn’t change the fact that it’s still illegal under federal law.”
While some tribes are willing to accept those risks, others are turned off by the prospect of working with marijuana, said Kevin Sabet, a prominent marijuana legalization opponent. He said said the “vast majority” have rejected working in industry “because they know firsthand the devastating effects of drug abuse on their communities.”
He accused big companies of zeroing in on tribes to make money off marijuana.
“Promises of big cash payouts will be met with heartache,” he said. “Can anyone really say that more drugs are going to help these communities?”
Tribes see uneven results
Nationally, tribes have had mixed success with cannabis. Just last month a tribe in South Dakota burned its marijuana crop out of fear it would be raided by federal authorities. In September, agents seized thousands of marijuana plants from a tribal operation in northern California. Neither state has legalized marijuana.
Meanwhile, two tribes in Washington recently signed historic agreements with the state to enter the retail marijuana market.
“The latest kind of takeaway is if you are not in a state where marijuana is already legal, it’s going to be very hard to get your operation going if the state is not cooperative,” said Williams.
Liz Smith, a Warm Springs tribal member and news director for the tribes’ radio station, KWSO, said the proposal has generated a lot of interest on the reservation.
While some see the proposal as “morally wrong,” she said others see it as an opportunity.
“They are throwing big numbers out there,” said Smith, “and we have been in a tough spot financially here for so long that what they are promising economically is a big deal.”
Oregonian staff writer Betsy Hammond contributed to this report.