First Nations that grow and sell cannabis are moving forward in the new industry, but many stand at a crossroad as they weigh their options whether to abide by their own licensing systems or seek federal approval in order to potentially benefit from selling products across Canada and abroad.
But among the roughly 350 people who attended the first National Indigenous Cannabis & Hemp Conference in Calgary last week, one goal was heard over and over: First Nations will not let this economic opportunity slip by.
First Nations say they were not consulted by the Canadian government when details around the Cannabis Act were being decided. This situation created a grey area for First Nations who have sovereign right on their land but must now navigate how best to benefit from the newly legal industry.
“[Current producers] aren’t smarter than us, they just got a head start,” said Blaine Favel, chief executive of Kanata Earth and former chief of Poundmaker Cree Nation, referring to the large licensed producers that are already established. “The tax efficiency is the most important thing we have to fight for.”
First Nations are not part of the taxation agreement that Ottawa worked out with the provinces, whereby 75 per cent of the excise on cannabis is returned by the federal government in transfer payments.
“I’m advocating the federal government to share in the bounties these governments collect. Our needs are akin to the provinces,” said Manny Jules, chief commissioner of the First Nations Tax Commission, adding that he has been having informal discussions on the topic with the federal government.
“We have to be part of the economy.”
Sara Mainville, of the Couchiching First Nation and lawyer with Olthuis Kleer Townshend LLP, said she is helping First Nations develop their own rules.
“I’m strongly in favour of inherent jurisdiction but I’m cautious about the avenues. I actually think that cannabis is a great place to exercise that,” Ms. Mainville said. “We need to carve out our own space as First Nations as this is going to be a very lucrative industry. The real way forward for First Nations is how to get our communities really engaged in deciding how to move forward in cannabis.”
Some First Nations members have opened retail cannabis stores on their land, which in some cases are licensed by their governments, while they buy product from growers that are not federally licensed. This comes with the risk, however, of being shut down. Last week, Canadian Press reported the Saskatchewan Liquor and Gaming Authority officially warned the Muscowpetung Saulteaux First Nation about an unlicensed pot store, stating provincial and federal legislation still applies on reserve land.
“This is our sovereign right to do this,” said Rob Stevenson, who owns Medicine Wheel Natural Healing Indigenous Medical Dispensary in Ontario.
Some conference participants signed a petition requesting a dialogue for First Nations’ sovereign and inherent rights be recognized.
Others, however, have sought the federal legal route in order to have access to national and international buyers.
Wesley Sam, executive chairman, founder and vice-president of Indigenous Business Strategies of Nation Cannabis in northern B.C., has applied to Health Canada to become an LP with plans for an $18-million project to grow around 23,000 kg of cannabis annually. He and other First Nations producers said they aim to separate their products “from the pack” with a First Nations logo that they hope will attract brand loyalty.
“These big opportunities don’t come very often. We wouldn’t get any investors if we didn’t go legal,” Mr. Sam said, add that the legacy lumber industry in the region is suffering from a beetle infestation linked to the warming climate. “We’re going to be replacing 50 to 60 employees from lumber to cannabis.”
And while many First Nations argue their communities should receive a percentage of the cannabis excise when it is sold on their land but goes to provincial and federal governments, Mr. Sam said that 5 per cent of the company’s EBITDA will be given back to his community.