“The tribes appear to be having their cake and eating it too while everyone else is being starved.”
By Peter Callaghan, MinnPost
A Republican senator tried Thursday to open up ongoing negotiations between Gov. Tim Walz (DFL) and 10 of the state’s tribal nations that are expected to give the tribes broad access to the new recreational cannabis market.
He failed.
But Sen. Mark Koran’s two amendments to a mostly unrelated bill are the first moves to slow down, or at least require public input into, closed-door negotiations over tribal cannabis compacts. Leaked drafts of one compact show that tribal owner enterprises could open stores off reservation under tribal, not state, regulation and would give the tribes broad access to other cannabis businesses.
The amendments would have:
- Added the speaker of the House to the negotiating team
- Required that state taxes be collected on off-reservation sales
- Demanded that compacts be posted publicly for public comment 30 days before signing
- Prevented the governor from surrendering state regulatory sovereignty over off-reservation cannabis stores
State officials have said they expect negotiations, authorized by the 2023 recreational cannabis law, to be completed this month. They are to be posted on a government website once completed, and once they are signed by Walz and tribal leaders they cannot be changed.
All five Republicans on the Senate State Government Committee voted yes; all six Democrats voted no.
The
bill in question Thursday calls for a small change to an existing law that requires state agencies to meet regularly with tribal nations, to attend training in state-tribal relations and meet separately on any agency actions that impact tribes directly. Because the Office of Cannabis Management didn’t exist when the law was passed, the change would simply add the agency.
But Koran used the bill’s connection between OCM and tribal negotiations to raise issues about the compacts. While the talks are secret, a draft of one of the compacts was leaked and indicates that each of the 10 tribes will be allowed to open up to five stores off reservation. They would also be allowed to have sizable growing and manufacturing operations and be the only large entrants into the industry with so-called vertical integration—growing, manufacturing and sales.
And the tribal governments would bring their tribal regulatory authority off of the reservation meaning a tribal store and a non-tribal store could operate side-by-side with one under state laws and regulations and the other under tribal authority.
A separate negotiation between the tribes and the state Department of Revenue is charged with deciding what, if any, taxes would be collected by tribal enterprises on off-reservation stores. State-regulated stores will collect all state and local sales taxes plus a 10 percent cannabis tax.
Koran said his changes to the compact negotiation law would make them more transparent.
“Given that OCM and the governor and the tribes have already entered into an agreement with no transparency, this introduces some common sense transparency,” said Koran, of North Branch.
Dibble, who is the lead Senate DFL member on cannabis bills this year, said the amendments are outside what the underlying bill would do.
“This opens up a discussion that is unrelated to the compacting that is required under the adult-use law we passed, and it’s a fairly significant change,” said Dibble, of Minneapolis. “It is a fairly significant change probably and maybe worthwhile but probably should be done in conversations with stakeholders, with the chief author and the Office of Cannabis Management.”
Thursday’s hearing wasn’t specifically related to the imminent tribal compacts. But one person hoping to enter the new market did testify.
“I oppose this bill because it would make the already opaque compacting process even less transparent to legislative scrutiny, reducing the Legislature’s oversight in how Minnesota’s cannabis market is structured and operates,” said Shaun Tetreault, who is hoping to win a license to grow cannabis.
He said the compacts are secret but that leaked details give “overwhelming advantages” to tribal enterprises. They don’t apply for state licenses, enter lotteries to distribute those licenses or follow the same rules as state-license businesses will, he said.
“Minnesota’s cannabis industry was sold to the public as a craft market meant to benefit those harmed by cannabis prohibition,” he said. But the compacts don’t help those people.
“The tribes appear to be having their cake and eating it too while everyone else is being starved,” Tetreault said.
OCM and Walz have not provided any details on negotiations other than to say they are required by state law and could be completed soon.
Last month, Walz was asked why his negotiators appeared to be close to a compact that will make Minnesota the only state with tribal cannabis compacts to allow off-reservation sales. Others that do not are Washington and Nevada.
“Minnesota maybe does stand apart on this in that we do honor tribal sovereignty,” Walz said. “These are sovereign nations. They have their treaty rights. They have their historic rights. We’ve made it clear here that we have a responsibility to our tribal nations. We’ve crafted this in a way that will create these compacts, and they will have a right to compete in Minnesota.”
In response to complaints that the compacts give tribal operators an unfair advantage, including allowing them to get to the market before other licenses are even awarded, the governor said he didn’t share that concern.
“These are our first Minnesotans and they’re going to be up and running,” Walz said. “Others can, too. What we’ll see if it is easier said than done to run these businesses and if the tribes are able to do so I’m comfortable with the direction we’re going.”
This story was first published by MinnPost.
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Photo courtesy of Chris Wallis // Side Pocket Images.
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