Native American Tribes

You do not want the FBI at your door. Follow these four rules to improve your odds.
You do not want the FBI at your door. Follow these four rules to improve your odds.

Last week, government authorities raided a cannabis cultivation operation on the Pit River reservation. According to a press release issued by the U.S Attorney’s Office for the Eastern District of California, agents from the Federal Bureau of Investigation, Bureau of Indian Affairs, Drug Enforcement Agency, and the California Highway Patrol, executed a search warrant on a pair of grow operations on Pit River tribal lands located in northeast California.

The Pit River Raid came despite the Department of Justice’s recent guidance clarifying the applicability of the Cole Memorandum to tribes. In the Wilkinson Memo, the DOJ expressed its intent to treat tribes no differently than states for purposes of enforcing federal controlled substances law (for more background on the Wilkinson memo, check out Tribes And Cannabis: This Will be Big). This raid was the most high-profile federal raid on a tribal cannabis operation since the Wilkinson Memo was issued last year.

In a somewhat unusual move, the federal government unsealed a 28-page affidavit that the Bureau of Indian Affairs used to obtain and execute the search warrants, revealing extensive details about the character of the reservations cannabis operations. Though we want to be clear that the government has not proven any of its alleged facts, the affidavit still provides examples of what NOT to do if you are looking to grow or sell cannabis on tribal land. If you are a tribe looking to get into the cannabis industry, you should do the following four things, at minimum.

  1. Make sure everyone (or nearly everyone) is on the same page.

The Wilkinson Memo mandates that tribes looking to get into cannabis first consult with proper federal aw enforcement officials before beginning operation. Certain tribes may also have to also consult with state officials, depending on whether the state in which it is located can exercise criminal jurisdiction on tribal lands.

In the Pit River case, the principals, to their credit, did appear to have had these meetings, but it seems that they didn’t go very well and the tribe never received any approvals from the Feds. The government alleges that the tribe’s principals were specifically advised by the U.S. Attorney’s Office that the tribe’s plan for cannabis would violate federal law and could lead to a criminal enforcement action. Though it is not likely that any tribe will get anything in writing from the Feds stating the opposite, it should have been a red flag. It is also alleged that the principals met with county officials to discuss its cultivation plan after they already began operating.

Even if you get all outside law enforcement on board, it’s still necessary to build intra-tribe consensus on whether to grow and/or sell cannabis. It appears that the principals involved in this case did not have approval from the Pit River tribe and a number of tribe members contacted the feds to get them to shut the operation down. Though it is unlikely that any tribe could reach total consensus on whether to grow and how to regulate cannabis, some general consensus is necessary.

  1. Vet your partners. 

It should go without saying that it is a bad idea to do business with shady people, especially in an industry like cannabis that draws heightened scrutiny from regulators and law enforcement. According to the government allegations, the operation’s primary financier has a cigarette company current targeted in multiple lawsuits for unpaid taxes to the IRS. Vetting potential partners’ civil and criminal histories early can save a lot of headaches later on. For ancillary companies looking to contract with tribal cannabis operations, you should make sure that you are dealing with tribal representatives authorized to act on the tribe’s behalf.

  1. Use proper traceability software.

Seed-to-sale software is an important tool in preventing product diversion and it gives regulators easy oversight by allowing them access to real-time data about the operation. The government is alleging that the Pit River operators posted pieces of paper on the doors of each greenhouse and prepared only very generic shipping manifests for distribution. In the modern cannabis industry, papers and pencils have been replaced with RFID tags and barcode scanners and a proper traceability system reduces enforcement risk.

  1. Don’t assume that because another tribe is doing it, you can do it too.

Every tribe is unique in how it governs and how its sovereignty intersects with state and federal governments. Just because another tribe has started growing cannabis does not mean that your tribe can or should  too. Tribes looking to grow or sell cannabis should lay their own groundwork by building community consensus, developing a regulatory framework, and then having that framework reviewed by the proper authorities. This cannot be accomplished overnight, but it is far from impossible. When it comes to cannabis businesses, slow and steady usually wins the race.

This map is amazing. It was done by Aaron Carapella, a Cherokee, and it maps the Native American Nations as of 1491. For more on this go to http://bit.ly/1JQe0BG
This map was done by Aaron Carapella, a Cherokee. It is of the Native American Nations as of 1491.                                                              For more on this go to http://bit.ly/1JQe0BG

Governor Inslee signed HB 2000 into law earlier this month. We wrote about it before. In short, it authorizes the governor to enter into compacts with tribal governments regarding regulation of marijuana businesses, enforcement of law, taxation, dispute resolution, and a few other issues. Now that it has been signed, the big question is whether we will actually see tribes in Washington State enter into these agreements with the state.

A number of tribes in Washington are exploring the possibility of getting into the marijuana business. It appears that the Department of Justice will treat them a lot like they treat states — as long as the tribes regulate cannabis distribution and do not violate federal enforcement priorities, federal enforcement of marijuana prohibition is unlikely. None of those tribes are actively distributing marijuana under their own regulatory regime yet, but it is only a matter of time.

The relationship between tribes and the state is complicated, as tribes are sovereign, but they also are subject to continued attacks on their sovereignty. When it comes to law enforcement, gaming regulation, and their relationship with the federal government, tribal sovereignty is regularly threatened by state action. A lot of the same criticisms that we have made about the DEA apply to government agencies in general. Once you give authority to an institution, that institution seeks to maximize its authority and extend its reach. When its authority is challenged, the institution will work even harder to seek ways to further legitimize and expand its scope. This expansion, along with removing as many human elements as possible from the process, is the nature of bureaucracy.

So, we get why the state would want to enter into these compacts, but does it make sense for the tribes? There are real pros and cons. The tribal business would gain access to licensed Washington marijuana businesses. That means that they could potentially wholesale to licensed producers, processors, and retailers. This is an important consideration, as a lot of tribal land in Washington State is not located in or even near population centers, and those tribes may not be able to support their own retail operations. These tribes that are out in the middle of nowhere could do real business as wholesalers, but would struggle if they needed to generate a lot of foot traffic. Additionally, entering into compacts can be a political move. Tribes can also have gaming and cigarette compacts with the state, and a concession on marijuana may lead to gains in other tribal business ventures.

The biggest negative is that HB 2000 mandates that any tribe entering into a compact with the state must tax its marijuana sales at the same excise tax rate as the state imposes on licensed marijuana producers, processors, and retailers. Part of the reason tribes would want to involve themselves in the marijuana business is that they would be able to undercut the state system by implementing a lower tax rate. Though there is an exemption for sales to tribal members, tribes entering into the retail market would want to offer lower tax rates to non-tribal members as well, in an effort to encourage customers to go out of their way to purchase from the tribe. Tribes that directly operate retail businesses could maybe avoid the negative implications of this tax by deciding to sell product at a steep discount, as tribal marijuana business income and tribal tax revenue would both ultimately end up benefitting the tribal government. However, in existing cigarette tax compacts, there are rules that tax revenue not be used to subsidize cigarette retailers, and similar language would be likely in any marijuana compact.

Additionally, tribes wanting to maintain sovereignty are rightfully distrustful of entering into these agreements with the state, especially if the state tried to mandate that the Liquor and Cannabis Board (still getting used to that new name) enforcement officers be allowed to enter onto tribal land and inspect tribal businesses.

We do not yet know if the state is going to push for that type of enforcement authority, but the first negotiations will certainly be interesting. It is likely that Governor Inslee would delegate negotiating authority to the Liquor and Cannabis Board for any tribal compact. For now, we’ll wait and see which, if any, tribe in Washington decides to enter into negotiations.

On June 4, in Green Bay, Wisconsin, we will be putting on a Tribal Marijuana Workshop at which we will — on a very practical level — be discussing issues like this. This workshop is being put on by our group and by Robert Odawi Porter, one of the top tribal lawyers in the country. We worked with Robert on our last Tribal Cannabis event, at the Tulalip Resort and Casino and that event was a huge success, with more than 450 people attending. For more on our previous event (and a taste of our upcoming one), please check out the following news stories:

 

In October 2014, the federal government announced that (if done correctly) Native American Tribes are free to legalize, cultivate, manufacture, and distribute cannabis on tribal lands without federal intervention. As we wrote in Tribes And Cannabis: This Will be Big, the Feds are giving the impression that they will no longer prosecute federal laws regulating the growing or selling of marijuana on reservations, even when state law bans the drug. But it will enforce those federal laws if so requested by a given tribe. The memo authored by Monty Wilkinson, Director for the Executive Office for U.S. Attorneys, reflecting this new policy can be found here.

A Native American Peyote Set
A Native American Peyote Set

Since the release of this memo, we held the nation’s first ever Tribal Marijuana Conference at the Tulalip Resort and Casino. The event was a great success with over 450 people in attendance and tribal government representation from over 75 tribes. Speakers covered a multitude of topics, including federal marijuana policies and laws, various state law marijuana regimes from California, Nevada, Colorado, and Washington, business considerations for tribes contemplating getting into the marijuana industry, and complicated intersections of federal, state, and tribal law when it comes to marijuana. Since the Conference, several tribes have indicated significant interest in taking advantage of the Wilkinson memo, but we have yet to see a tribe actually undertake the development of a marijuana grow operation on tribal lands.

In Tribal Marijuana: Patience is a Virtue, we talked about how there is no rush for tribes to get into the marijuana industry. The tribes have plenty of time to ensure that they are making the right (and educated) decision on marijuana for their particular tribe. At the same time, states are beginning to get proactive about their own visions for tribes getting into the cannabis industry and any tribe considering the marijuana industry should at least be aware of the position of the state in which their tribal lands sit.

As a for instance, the State of Washington is looking to pass a bill that would allow the governor to enter into compacts with willing tribes regarding marijuana commerce. Washington has legal medical and recreational marijuana marketplaces — which both compete against each other and against the illegal market for consumer turf and many Washington lawmakers are worried about putting tribal marijuana into this already volitile mix. Washington State House Bill 2000 would require that tribes that want to interact with the state’s already existing cannabis marketplaces go through the state first. This would mean that tribes would need to work with state-licensed producers, processors, and retailers and also work first with the state in implementing their own marijuana regulations regarding the same.

HB 2000 stipulates that agreements under the compact may include, but are not limited to, the following provisions and subject matter:

(a) criminal and civil law enforcement;

(b) Regulatory issues related to the commercial production, processing, sale, and possession of marijuana, and processed marijuana products, for both recreational and medical purposes;

(c) Medical and pharmaceutical research involving marijuana;

(d) Taxation;

(e) Any tribal immunities or preemption of state law regarding production, processing, or marketing of marijuana; and

(f) Dispute resolution, including the use of mediation or other nonjudicial process.

A spokesperson for Governor Jay Inslee told the media that “the state has the infrastructure for [the marijuana] marketplace, we have the retail outlets, the inspection process, the labeling. We think that’s one of the things that’s going to draw tribes to the compact.” Essentially, if a tribe wants to be a part of the state’s marijuana medical or recreational system, either by selling or buying marijuana outside of the tribe’s borders, the contract with the state would detail how to proceed.

Tribes are no strangers to compacts with states. Tribal gaming laws and the litigation surrounding them established that tribal-state compacts are mandatory for Class III gaming on tribal lands under the Indian Gaming Regulatory Act of 1988 (IGRA). According to Congress, “the express purpose of the IGRA was to balance the Indians’ interest in tribal sovereignty with the states interest in guarding its citizens from corrupt gaming activities and organized crime infiltration.” The compacts were designed to allow tribal and state governments to come to a “business” agreement regarding gaming, a major source of revenue for gaming tribes. Many tribes view IGRA as an excessive restraint on tribal sovereignty and resent how it can constrain their ability to generate tribal income.

Though HB 2000 does not mirror IGRA, it clearly reflects the State’s desire to control tribal interactions with the state’s marijuana industry and we have already heard from some tribes that are not keen to sign on. All this leaves us to wonder about what tribal marijuana will look like in various states. Will it eventually become like tribal gaming or something else entirely different?

Marijuana Green RushThe “gold rush mentality” is rampant in the marijuana industry, with too many people racing into cannabis believing it will be the second coming of gaming. Many of these people are uninformed, unprepared, undercapitalized, and sometimes even delusional about the cannabis industry. Pioneering is not the same as profiting and everyone involved with marijuana (or any other business for that matter) needs to think carefully before putting money on the line to try to “cash in” on the “Green Rush.”

Especially sovereign American Indian nations and tribes.

Even though tribes now have the October 2014 Wilkinson DOJ statement (“Wilkinson statement”) as support going forward, there has been no change in federal law proscribing marijuana. Equally important, just because something has been made easier, does not mean that it automatically makes sense to do it.

Pretty much every day we see streams of press releases that such and such cannabis company is working with large numbers of tribes to take advantage of the Wilkinson statement. To the extent any aspect of these press releases are true, we as lawyers are concerned. The Wilkinson statement alone makes clear that the legal issues involving tribes participating in the marijuana industry are incredibly complex, involving jurisdictional issues between state, federal, and tribal governments, tribal sovereignty issues, and issues regarding how each U.S. Attorney will treat tribal marijuana issues within his or her own sphere of authority. Moreover, there are a slew of social, political, and economic issues for tribal leaders to address with their citizens. The tribes with which we are working are taking the time to research the marijuana issue and to discuss whether it makes sense for them to proceed under the Wilkinson statement and, if so, how to do that. These tribes are looking at some of the following:

How and when to consult with the federal government. The Wilkinson statement essentially requires that any tribe interested in cannabis consult with the federal prosecutor in its jurisdiction. Here’s the catch on this though: no U.S. Attorney is going to explicitly give his or her blessing for any tribal marijuana regime at first glance. Securing that nod of approval is going to require a well-formulated ready-to-implement comprehensive marijuana regulatory regime and lengthy dialogues with the U.S. Attorney’s office. The U.S. Attorney is not a one-time, one-stop shop for approving marijuana visions of grandeur. We have not yet reached the stage of being ready to talk with any U.S. Attorney regarding our tribal clients’ plans because the last thing we want to do is rush things and get rejected. There have already been accounts of tribal representatives who have gone to the U.S. Attorneys and been flat out told “no.” This reaction, too, raises fairness concerns, and further justifies the need for a well thought out strategy in advance. We also are seeing tribes announce in the press that they will be going into cannabis or even that they have already done so. We worry that most (none?) of these tribes have failed to secure U.S. Attorney approval beforehand and that their unilateral announcements have only reduced their chances of securing even a tacit approval.

How to address potential application of state laws. A number of tribes from California have publicly expressed their interest in pursuing cannabis on tribal lands. California is both a Public Law 280 (“PL 280”) state and a state with abysmal state medical cannabis laws. There are eighteen PL 280 or PL 280 equivalent states in the union. In a PL 280 state, state law enforcement can assert criminal jurisdiction on tribal lands to arrest and prosecute for state law crimes. PL 280 can be problematic for a tribe wanting to undertake a cannabis operation where that operation may not be in line with existing state criminal laws. For example, tribes that legalize adult use cannabis could be subjecting their members to state law prosecution where California does not have any recreational marijuana laws. We know first hand that some of the California tribes that have expressed such keen interest were not aware of this. The Cole memo from 2013 stipulates that those states that adhere to the eight enforcement priorities set out in that memo will generally be free from federal enforcement actions. California arguably does not meet any of these eight criteria, making it a target state for federal enforcement. The state in which a tribe operates is going to make a big difference in how a tribe should implement its own marijuana regulations.

How to choose competent and trustworthy partners. When it comes to cannabis, no one firm or business can do it all. If a tribe is being pitched by a consultant or a law firm claiming that it does everything from seed to sale to securities to criminal defense and tribal law, that tribe is being pitched by someone either grossly ignorant or simply dishonest. Choosing trustworthy partners requires due diligence which takes time to accomplish.

How to develop marijuana regulations and a business plan. The federal government expects states to follow eight strict enforcement priories, ranging from traceability of product to preventing diversion to youth to preventing cannabis from crossing state lines. Tribes will not be held to different standards, the Wilkinson statement is clear on this. This means that any tribe looking to get into cannabis should first develop legally sound and strict regulations for their cannabis operations and be able to prove that it has the capacity to both implement and enforce those regulations. Without all this, anything the tribe does with cannabis could subject its members to criminal prosecution and could subject the tribe as a whole to a cut-off in federal funding. Each tribe also needs to determine whether cannabis will be a financially worthwhile venture for their nation in the years to come. This almost always requires analyzing state economies, population distributions, tribal budgets, market exclusivity, costs, tax structures, pricing fluctuations, and consumer demand, none of which can or should be done quickly.

How to ensure protection of sovereignty. As tribes discuss how to implement their marijuana regimes, issues like cultivation techniques, processing methods, and effective distribution will likely require outside experts which will, in turn, require contracts for services and may lead to tribal ventures. Wrongly done, these contracts and ventures can put a tribe’s sovereignty at risk. The cannabis “experts” lining up to “help” the tribes very likely do not have any experience working with tribal governments so the tribes themselves will need to take the lead in protecting their sovereign status. In addition, interactions with the federal and state governments invariably run a risk of conflicts over jurisdiction and sovereignty. This convergence of risks justifies the need for understanding both the Indian law and marijuana law issues as they intersect.

Above all else, the tribes need to be patient and reject dealings with anyone who is saying that they must act now or forever lose out. While timing is certainly pertinent, rushing it before absolutely ready won’t serve any purposes. We wrote last year of the many red flags in the marijuana industry. Read that list and then double it for the tribes. Even worse is that a single misstep by one tribal government could upend the opportunity for all tribes.

Patience, patience, patience.

* This post was co-written with Robert Odawi Porter, an attorney expert in the field of American Indian law who has dedicated his 20-year legal career to protecting and expanding the rights of indigenous nations and peoples. Our cannabis business lawyers work with Mr. Porter on all tribal marijuana matters.

Tribal Marijuana Conference
AP Photo by Elaine Thompson. This photo shows some of the speakers during a moment of silence for a Tulalip tribal leader who had just passed away.

In December 2014, the federal government announced that when it comes to marijuana, it would not essentially treat Native American Tribes as it treats states. Since that announcement, a number of tribes have indicated an interest in tribal marijuana. My law firm just last week put on the first national Tribal Marijuana Conference, attended by more than 400 people, from more than 75 tribes and more than 35 states.

Clearly, marijuana on tribal lands is going to be a big deal.

The Department of Justice has stated it will not focus its resources on prosecuting growing or selling marijuana on tribal lands, even when state law prohibits it. This holds true for both medical and recreational cannabis, though the DOJ will enforce federal marijuana laws on tribal lands if the tribe requests that it do so. According to the DOJ’s tribal marijuana memo, the eight enforcement priorities previously outlined in the DOJ’s August 2013 Cole memo will guide federal enforcement of marijuana laws on tribal lands. It is important to note that none of this changes federal drug laws or the federal government’s ability to enforce those laws. Therefore, any tribe considering setting up a legalized marijuana regime should enact and enforce “robust regulations” so as to comply with the Cole and tribal marijuana memos and to increase its odds of avoiding unwanted federal intervention.

In a statement to the media clarifying the tribal marijuana memo, a Department of Justice spokesperson had the following to say:

This policy statement recognizes that Indian country is incredibly diverse, and different tribes will have different perspectives on enforcement priorities that are in the best interest of their community’s public safety . . . . Some tribes are very concerned with public safety implications, such as the impact on youth, and the use of tribal lands for the cultivation or transport of marijuana, while others have explored decriminalization and other approaches.

The federal government’s newly liberal policies regarding cannabis on tribal lands could be a financial boon for a large number of tribes, especially those in states where marijuana is not yet legal or limited to few medical uses. The tribes in those states may be the only source for legal marijuana for all of the state’s citizens. In states like Washington and Colorado, with advanced cannabis regimes, the tribes should be able to compete with legal sellers by imposing lower taxes or relatively more liberal regulations. The tribal marijuana memo nowhere prohibits existing non-tribal cannabis companies from conducting business with the tribes or on tribal lands, and already there has been a stampede of non-tribal cannabis businesses seeking to “partner” with various tribes.

The tribal marijuana memo states that tribes “should” consult with the U.S. Attorney in their jurisdiction before implementing tribal-forged marijuana laws. There are 93 US Attorneys and we do not expect all of them to agree to the tribes within their districts legalizing marijuana and they each have plenty of power to stop it. The intersection of federal, state, and tribal law and jurisdiction is complex and we are recommending to our tribal clients that they work closely with their local U.S. Attorney in securing approval of their particular legalization regime.

The opportunities for Native American Tribes in the cannabis industry are vast and just has been true of casino gaming, fireworks, and cigarettes, many tribes will immensely benefit from cannabis while others will opt out entirely. Tribal leaders will be meeting in Las Vegas on March 12 to cement the formation of a Tribal Leaders Cannabis Association that will enable moving forward as a unified group in dealing with key issues. We will be posting more information regarding this meeting later this week.

The nation’s first ever Tribal Marijuana Conference will be taking place tomorrow — this Friday, February 27 at the Tulalip Resort Casino, just North of Seattle. We are expecting around 400 people from around 35 states and representing around 75 tribes. There will also be a large contingent of national reporters covering the event. Tulalip

Our all-star cast of speakers, tribal leaders, public policy experts, and leading tribal and cannabis lawyers from both the public sector and the private sector will be discussing the legalization of marijuana in Indian tribal jurisdictions. Needless to say, if you are interested in tribal marijuana, this will also be a critical event for networking.

The Tribal Marijuana Conference Brochure contains the complete agenda, along with the full list of speakers and their biographies.

There is still time to purchase tickets to this event through Eventbrite.com or at the door (via credit card or cash only). If you have any further questions please contact Megan at firm@harrisbricken.com.

On the Saturday morning following the conference, there will be a meeting for conference participants to discuss forming a Tribal Cannabis Association.

If you want to read more about the conference and some of the issues related to it., please check out some of the articles that have been written on it (so far) below:

UPDATE: Last we checked, the Tulalip Resort was extremely low on rooms. If you wish to spend the night near the event, note that this Holiday Inn Express is about one minute from the Casino with regular shuttle service to the Casino.

 

 

 

Just last week — on the heels of the Cromnibus defunding enforcement of federal marijuana laws in states with medical marijuana programs — the federal government announced that Native American Tribes are free to legalize, cultivate, manufacture, and distribute cannabis on tribal lands without federal intervention. Though many tribes have no interest in getting into the cannabis business, the MoheganSuquamish, and Seneca Nation tribes, among others, have already expressed interest.

According to the Department of Justice, it will no longer prosecute federal laws regulating the growing or selling of marijuana on reservations, even when state law bans the drug. But it will enforce those federal laws if so requested by a given tribe. The memo (actually dated in late October 2014), authored by Monty Wilkinson, Director for the Executive Office for U.S. Attorneys, reflecting this new policy can be found here. According to Director A/G Wilkinson’s memo, the eight enforcement priorities outlined in the August 2013 Cole memo, in addition to consultation with tribal leaders, will guide U.S. Attorneys’ enforcement of federal marijuana laws on tribal lands. It is important to note that, just like the 2013 Cole memo, the Wilkinson memo does not represent a change in federal law or stymie in any way the federal government’s ability to fully enforce federal drug laws. What this means is that any tribe considering legalizing marijuana should be sure to enact and enforce robust regulations so as to stay in line with the Cole and Wilkinson memos and in order to avoid unwanted federal scrutiny.

The Department of Justice explains its new memo as follows:

… the memo was done in the interest of Native America community’s safety. This policy statement recognizes that Indian country is incredibly diverse, and different tribes will have different perspectives on enforcement priorities that are in the best interest of their community’s public safety … Some tribes are very concerned with public safety implications, such as the impact on youth, and the use of tribal lands for the cultivation or transport of marijuana, while others have explored decriminalization and other approaches.

The federal government’s more liberal policies regarding cannabis on tribal lands will likely be a financial boon for a number of tribes, especially those in states where cannabis is not yet legal. In those states, the tribes will be it for legal marijuana. We also see the tribes doing just fine in those states where marijuana has already been legalized. In those states, the tribes will be able to enact robust marijuana regulations without having to impose high taxes on marijuana, making their cannabis considerably cheaper than that of their non-tribal competitors.

The possibilities for Native American Tribes in the cannabis industry are vast and just as many tribes have done immensely well with gaming, fireworks, and cigarettes. So much so that we also expect many do to well in the cannabis industry.

A couple of days ago, The New York Times quoted me in an article entitled, Providers of Medical Marijuana Face New Fears. The article was on Washington State’s efforts to greatly restrict (perhaps even kill) the medical marijuana collective garden system in favor of a recreational marijuana only regime and I was quoted on that issue:

A medical marijuana user will certainly be able to enter a shop and buy marijuana once the new stores are open in June, but the old system of medical advice and supply, however flawed or beloved, is over, say both critics and supporters of the new rules.

“Prepare for the end,” said Hilary Bricken, a lawyer in Seattle who works mostly with the marijuana industry, summarizing the advice she is giving her medical marijuana dispensary clients.

Washington State’s struggles — and the inevitable comparison with Colorado’s different, smoother path toward retail marijuana — are being watched around the nation, Ms. Bricken and other legal experts said.

A number of media outlets have misinterpreted my New York Times quote to mean that small artisinal marijuana businesses are being crushed and will never be able to survive in the face of “Big Cannabis.” I never said that and neither I nor any of our other marijuana business lawyers believe that.

My “prepare for the end” advice was directed at medical marijuana collective-garden-based dispensaries in Washington State only. That advice makes sense for Washington State because the politicians (with a lot of prodding from the Federal Government) have consistently made clear that the existing medical marijuana system is untenable and must eventually be submerged into the overarching recreational cannabis system. So in other words, if you do not soon get a recreational cannabis license to allow your cannabis business to operate legally in Washington State, there will eventually come a time when the government will shut you down. That is “the end” to which I was referring. I was voicing no opinion whatsoever regarding the future of the “little guy” in marijuana.

But that is not how other publications are seeing it:

  • The Wire/Yahoo News did an article, entitled, Will Big Marijuana Crowd Out the Little Guy? using my “end” quote to support the claim the following claim: “As more states move to legalize marijuana and seek tax and other economic benefits from the drug, small-scale artisanal marijuana growers are being squeezed out. Welcome to the days of Big Marijuana.”

Nothing could be further from the truth.

To clarify, there is a difference between medical and artisanal and there is a difference between what is happening to MMJ in Washington State and what is happening in the various other cannabis regimes around the country. And though we do believe the future for medical marijuana collective garden dispensaries (only) is grim in Washington State, we strongly believe that the future for artisinal cannabis businesses is incredibly strong in most states in which marijuana is legal and will be legal.

In addition to representing cannabis businesses, we also represent artisinal alcohol producers and we see the marijuana industry as eventually going the way of the beer and wine and spirits industry, where there will be a handful of really huge players on the one hand and a ton of smaller (mostly regional) players on the other hand. The entire Canna Law team and I are incredibly optimistic about our clients’ futures, both our large clients and our small clients, other than those of our clients in the medical cannabis industry in Washington State who are not also in line for a recreational marijuana license.

In other words, we see a very bright future for all sizes of cannabis businesses.

How do you see our industry developing?