On May 20, Minnesota Governor Tim Walz signed a landmark tribal-state cannabis compact, allowing the White Earth Nation to operate cannabis dispensaries off its reservation across Minnesota. This agreement marks the first of its kind in the state and comes as part of the broader adult-use cannabis legalization legislation that Walz enacted in May 2023.
Two years after the legalization, Minnesota has not yet established a commercial market for private cannabis businesses. The state’s Office of Cannabis Management (OCM) is currently working through a licensing process, with lotteries set to begin next month.
The compact outlines a framework for collaboration between Minnesota and the White Earth Nation, one of 11 federally recognized tribes in the state, aimed at fostering a regulated cannabis market while prioritizing public health and safety. The White Earth Nation, which spans over 1,300 square miles in northwestern Minnesota, plans to launch its first off-reservation dispensary in Moorhead, just south of the North Dakota border, according to CEO Zach Wilson.
“This is a historic moment for the White Earth Nation and Minnesota tribes, setting a precedent for future cannabis compacts nationwide,” Wilson stated.
Under the terms of the compact, Waabigwan Mashkiki, the White Earth Nation’s cannabis enterprise, can establish up to eight off-reservation dispensaries across Minnesota. However, each tribal nation is restricted to one retail location per city and three per county. Additionally, the compact permits the White Earth Nation to issue one cultivation license for a facility with a maximum canopy size of 30,000 square feet.
The compact also allows Waabigwan Mashkiki to: 1. Purchase cannabis from state-licensed businesses to sell on or off its regulated land. 2. Sell cannabis produced by tribal businesses to state-licensed cannabis operations. 3. Deliver and transport cannabis outside its regulated land.
The 88-page compact emphasizes the mutual interests of both parties in creating a lawful and well-regulated cannabis market that supports the tribe’s economic growth while addressing the risks associated with unregulated cannabis activities.
While White Earth is the first tribal nation to form a cannabis compact in Minnesota, it is not alone. The Prairie Island Indian Community recently launched its cannabis venture, Island Peži, which serves customers aged 21 and older from its retail facility along the Mississippi River. The Red Lake Nation is also involved in the cannabis industry.
The growth of tribal cannabis businesses follows a trend that began with the Indian Gaming Regulatory Act of 1988, which enabled tribes to develop gaming operations as a source of economic independence. Cannabis has emerged as a new avenue for financial sovereignty over the past decade.
In 2014, federal protections were extended to state-sanctioned cannabis operations on tribal lands, following the issuance of the Cole and Wilkinson memos by federal officials. Despite the rescission of these memos in 2018, the compact asserts that there have been minimal changes in federal enforcement regarding state cannabis programs.
The compact further notes that there have been no federal prosecutions for activities compliant with state cannabis laws. It also recognizes the Department of Justice’s proposal to reclassify cannabis as a Schedule III substance under the Controlled Substances Act, which aligns with earlier guidance under the Cole and Wilkinson memos.
However, the compact makes clear that it does not shield the White Earth Nation from potential federal enforcement of cannabis laws. The legal complexities surrounding tribal sovereignty and cannabis were highlighted during a recent Senate Judiciary Committee hearing, where issues related to the Eastern Band of Cherokee Indians’ cannabis operations were discussed.
The future of Minnesota’s tribal-state cannabis compact remains uncertain as the federal government considers its response to such agreements. The compact represents not only a significant development for the White Earth Nation but also a potential model for other tribal nations engaging in the cannabis industry.
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