A building nearing completion across the street from Little Creek Casino and Resort is a bet that marijuana will be the next booming business on Indian reservations.
If all goes as planned, the site between Shelton and Olympia will be a store where the Squaxin Island Tribe will sell the drug.
A hands-off federal policy on pot sales in Indian Country, announced in December by the Obama administration, has generated a lot of interest but few takers so far. Now at least two Washington tribes want to join the newly legal industry.
The Suquamish Tribe in northern Kitsap County could be the first, with the state Liquor and Cannabis Board due to vote on a proposed agreement Monday. The Squaxin could follow close behind. Both governments have been negotiating with Gov. Jay Inslee’s office to hammer out tribal compacts.
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“I have led the tribe’s efforts to fight drug abuse on the Squaxin Reservation, and I arrive at my support for this new approach only after long deliberation,” Squaxin tribal Chairman David Lopeman wrote Inslee. “But I recognize that continuing as an island of prohibition while surrounded by jurisdictions that allow the sale and consumption of marijuana is unworkable.”
The tribes have decriminalized marijuana in certain circumstances and now want to regulate and control the drug, according to drafts of the compacts under negotiation. The News Tribune and The Olympian obtained the drafts through a public-records request.
The draft language would let the two tribes buy tested, packaged and labeled pot from the more than 900 holders of state licenses, then sell it to anyone 21 and older.
Unlike at private stores, the state wouldn’t get a cut.
A law passed by the Legislature this year setting up the process for marijuana compacts called for tribes to instead charge their own taxes, equal or greater to the state’s hefty rate of 37 percent plus sales tax.
That’s in deference to federal statute that limits state taxes on commerce taking place on reservations, said Rep. Chris Hurst, an Enumclaw Democrat and the sponsor of the new state law.
Though not required by the law, the proposed compacts call for the tribes to use all tax revenues for government services and to pay for audits showing they complied with that mandate.
But the law and the draft compacts allow for some exceptions in which pot could potentially be sold tax-free.
One is for sales to members of the tribes. Another is for marijuana grown or processed on a reservation, making it possible that even non-tribal customers could find better prices at tribal stores than are available off reservations.
The draft language allows the two tribes to grow and process the drug. The Suquamish said in a previous proposal that they had no plans to become growers and processors, and Squaxin Island Tribal Council member Jim Peters said it’s a future possibility for his tribe, but the plan for now is to buy from state-licensed growers.
The reason for the exceptions, Hurst said: State government doesn’t have the power to control operations taking place entirely on Indian reservations.
“How the tribes conduct their own business really is their own business, because they are sovereign governments,” he said.
Hurst said tribes could go into the marijuana business without signing compacts, but that both lawmakers and tribes agreed a uniform system would be better for public safety.
Under the proposed compacts, tribes could have their own systems to track pot in transactions taking place entirely within or between reservations, but would have to show records to the board. State enforcement officers could do checks and stings at the tribal stores — with advance notice to the tribe, whose police would be expected to participate in the enforcement.
Opponents of legalization have focused on the consequences for heavy users and children who might get their hands on pot despite the heavy regulations. Peters said the Squaxin Island Tribe plans to provide kids with information in school programs and that the tribe has a drug and alcohol treatment center in Elma that is available to help treat addictions.
The tribe aims to diversify the reservation’s economy, while treating marijuana like alcohol or tobacco, Peters said.
“We’re not going to advertise for people to get into it,” he said, “but if you are into it, we have a product for you.”