California Is Blocking Native Americans From the Marijuana Business
Like most folks, the Iipay Nation of Santa Ysabel got into the weed business for the money. The 700-member tribe, situated about 45 minutes east of San Diego, California, was roughly $50 million in debt from a failed casino project when the Obama Department of Justice issued the Wilkinson memo in December of 2014, giving Native-American nations the same leeway that had been given to states like Colorado and Washington. Essentially, the feds said, if you keep marijuana regulated; keep it out of the hands of children and criminals; and keep it out of places where it’s still illegal, we’ll leave you alone.
Impoverished tribes all over the country suddenly had skunky smelling dollar signs in their eyes. Pot entrepreneurs realized that because tribes generally don’t need to pay income taxes, partnering with tribal governments might allow them to get out of paying the whopping federal tax bill necessary for anyone selling a Schedule I drug. Santa Ysabel was approached by over 300 marijuana businesses, and ultimately chose seven to set up cultivation, manufacturing and a testing lab on their land. Investors began predicting that Indian weed was going to be an even bigger business than Indian gaming.