The Suquamish on Monday signed the first U.S. state-tribal marijuana pact, which will govern a planned retail store under rules much like those that apply to state-licensed pot outlets.
The Suquamish Tribe signed the nation’s first state-tribal marijuana agreement Monday, a pact with state regulators governing how the tribe’s planned retail store in Kitsap County will operate under rules similar to those that regulate existing legal pot merchants.
The historic deal comes almost a year after the Obama administration said it would treat tribes the same as state governments when it comes to marijuana.
That means tribes can get into the legal weed business if they manage pot with an emphasis on eight federal priorities. Those priorities include preventing drugged driving by consumers and consumption by minors, and keeping organized crime from creeping into the business.
As sovereign nations, tribes could try to grow, process and sell marijuana without paying the 37 percent excise tax imposed on legal marijuana retail sales. But the compact between the state and the Suquamish calls for the tribe to charge nontribal customers an equivalent tax.
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Tax revenues must then be spent on “essential government services,” such as tribal public safety and health.
“Our decision to enter into retail operations comes after careful consideration,” Tribal Council Chairman Leonard Forsman said in a statement. “With the passage of I-502, we knew we needed to adapt to the changing environment surrounding our reservation and saw an opportunity to diversify our business operations.”
The marijuana compact is similar to the tribe’s deal with the state on cigarette sales, said Rion Ramirez, general counsel for the tribe’s economic-development arm.
“This agreement is an excellent model for future compacts,” said Liquor and Cannabis Board (LCB) Chair Jane Rushford.
The Suquamish plan to open a retail store by November along Highway 305 in Poulsbo. The nearest competing store is about four miles away on Bainbridge Island, said April Leigh, spokeswoman for the 1,100-member tribe.
The Squaxin Island Tribe is negotiating a similar agreement. That deal is likely by the end of September, according to LCB spokesman Brian Smith.
The impact of the Suquamish agreement on the state’s legal pot industry is minimal, at least for now, said a lawyer who specializes in the pot business.
“While the tribes will likely receive preferential tax treatment under federal law and will potentially be able to outcompete the existing industry, there are not a sufficient number of them to really threaten a lot of existing retailers,” said Robert McVay.
Growers, on the other hand, may be feeling more anxious, McVay said. If tribes get into growing and make deals with retailers across the state, they could become “real players on the production and processing end,” McVay said.
The compact says the tribe will use the state’s seed-to-sale tracking system for weed it procures and sells. The Suquamish must notify the state if it intends to go into the growing or processor business. If it does, the state may require the same testing and packaging that it requires of state-licensed merchants.
Both the tribe and state may conduct sting operations using minors to make sure the Suquamish store is complying with state prohibition on sales to those under 21.
The compact must be approved by Gov. Jay Inslee. It would last 10 years.