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Canada’s First Nations Navigate Gray Areas in the New Legal Cannabis Economy

Photo Gracie Malley for Cannabis Now


Canada’s First Nations Navigate Gray Areas in the New Legal Cannabis Economy

A growing number among Canada’s First Nations are looking to legal cannabis as a path to economic empowerment. Others are deeply skeptical, but all seem united in demanding sovereign control on the cannabis question within their own reserves.

With Canada on a final countdown to legal cannabis, the country’s indigenous peoples — known as First Nations — are emerging as an unpredictable factor. Neither the new Cannabis Act nor the Indian Act, the principal law governing First Nations, address the question of cannabis in indigenous territories.

Canada’s First Nations have themselves been divided on the question. Some are hoping for a path to prosperity in cannabis sales and cultivation on their reserves. Others are wary of a potential threat to traditional ways. But the question is now upon Canada in no uncertain terms. A least five Licensed Producers of legal cannabis and 14 applicants have indigenous ties, according to Health Canada. And dozens more First Nations are directly collaborating with licensed cannabis companies, according to an Oct 8 overview in the Canadian Press.

Corporate Cannabis Comes to Mohawk Country

Just up the St. Lawrence River from Montreal, the Kahnawake Mohawk reserve will soon be hosting a giant greenhouse facility to grow legal cannabis, the Canadian Press reports. The Mohawk Council of Kahnawake has signed an agreement with Canopy Growth Corp — one of Canada’s leading Licensed Producers (and the first “plant-touching” cannabis company to list on the New York Stock Exchange).

While the deal is as of yet non-binding, it could see Kahnawake host a 4,650-square-meter production facility, with adjacent processing and packaging operations.

Kahnawake’s Grand Chief Joe Norton told the Canadian Press: “We rely almost completely on outside government cash. We need a stable source of income so that we can then give it back to our people.”

And some First Nations are not waiting for approval from Ottawa. As the Canadian Press notes, the Tyendinaga Mohawk Territory in eastern Ontario is one of several native communities in Canada where local enterprises have defied federal law by opening dispensaries even before legalization takes effect. More than 40 cannabis retailers are already operating at Tyendinaga, with approval from tribal authorities.

From the Plains to the Yukon

The account notes several other First Nations eagerly looking to a cannabis boom. In the western Saskatchewan province, Thunderchild First Nation has invested $8 million in Westleaf Cannabis Inc. for a 10,700-square-meter cultivation facility on the reserve. In Alberta, the Fort McMurray #468 First Nation plans to build a cultivation facility in partnership with local company RavenQuest BioMedcan. Annual yields of up to 15,000 kilograms are anticipated.

Fort McMurray #468 chief executive officer Brad Callihoo elaborated in an interview with the Canadian Broadcasting Corporation that the tribe wants to diversify its business interests away from oil and gas development.

“When the oil prices dropped, the Fort McMurray First Nation’s business arm really suffered,” Callihoo said. “Chief and council really focused on economic diversification and cannabis was definitely an area that we looked at along with a few others.”

And in the Yukon territory, the Carcross-Tagish First Nation is also looking to legal cannabis as a historic opportunity. Chief Andy Carville has dispatched his legal team on a “fact-finding mission” to explore options for cannabis-business investment on the reserve. Carville told the Canadian Press he is already in talks with Edmonton-based Aurora Cannabis, and sees investment from this sector as a chance to “move out from under the government’s thumb.”

Dissent and Taxation

The Canadian Press also noted some skepticism among the First Nations. “The community itself is divided on the whole issue of cannabis,” said Chief Jean Guy Whiteduck of the Kitigan Zibi Anishinabeg First Nation in Quebec. “Not everyone sees it as a get-rich-quick scheme.”

Taxation also remains a legal ambiguity. A deal struck between Ottawa and the provinces last year gives provincial governments 75 cents of every dollar collected in cannabis excise taxes, with the rest going to federal coffers.

But First Nations were overlooked in this process. The federal government’s First Nations Tax Commission is now scrambling to close this gap in the law. The Commission’s chief, Manny Jules, warned of the potential for “grey marketeers” exploiting the ambiguity. “Yes, individuals can make a lot of money, but it leaves the First Nations governments out.”

Grand Chief Norton of Kahnawake acknowledged fears among First Nations residents, noting that alcoholism and drug abuse have long been a means of coping with oppression — such as the notorious “Sixties Scoop,” which saw thousands of indigenous children taken from their homes and families, to be placed in foster homes. The resultant cultural erosion and breaking up of families fueled addictions and substance abuse on the reserves.

“Some of the older folk are saying basically, it’s zero tolerance, that’s it,” Norton told the Canadian Press. “If you look back at our history, the residential schooling, the Sixties Scoop and all these things that have happened to us, people rely on those sorts of things as a crutch. But it can be a medicine too.”

Norton concluded: “Everybody’s moving on this. I’m asking: Are we going to be left behind, again?”

Indigenous Right to Ban Cannabis, Too

Federal authorities are recognizing that indigenous sovereignty cuts both ways on this question. Although the Cannabis Act legalizes across all Canada, Ottawa says it will not launch any legal challenge if a First Nation decides to ban cannabis on its own territory, the Canadian Broadcasting Corporation reported on Oct. 3.

Bill Blair, the federal minister for Border Security and Organized Crime Reduction, appeared with Indigenous Services Minister Jane Philpott before the Senate Aboriginal Peoples Committee to face questions on how legalization will impact indigenous communities. When asked about Ottawa’s reaction if an indigenous government chooses to bar the herb, Blair stated: “My understanding is that the Minister of Justice does not intend to litigate on that issue.”

Under Canada’s Indian Act (first passed in 1876, but revised several times since then), bands can pass bylaws prohibiting “intoxicants” from a reserve — but these are defined as alcoholic or fermented beverages. So this is another question that remains in legal limbo.

Speaking to Ontario’s London Free Press, Chief Jessica Hill of the Oneida Nation of the Thames assailed dispensaries for opening without consulting band officials. “There is no accountability to the community at all for what they’re doing, and the community is against drugs,” Hill said. “Also, it brings in all types of people that have never come here before. Now [they] come here looking for drugs.”

As the Free Press notes, Ontario’s more than 130 First Nation communities have emerged as havens for sale of contraband tobacco over the past generation, with more than one-third of all cigarettes sold in the province are now bought illegally on reserves.

Cannabis & Sovereignty

Tyendinaga dispensary operator Jamie Kunkel, whose Smoke Signals franchise now has locations in three Canadian provinces, told the Free Press that the businesses are contributing to community development programs on the reserves.

“At this point, it’s beneficial to every part of the territory now,” he said.

Kunkel this May organized Canada’s first Indigenous Cannabis Cup, which brought 60 vendors and thousands of attendees to Tyendinaga over the Victoria Day weekend. Neither federal nor provincial authorities interfered.

Kunkel portrayed this — and the proliferation of dispensaries on First Nation reserves — as a victory for indigenous sovereignty.

“At the end of the day, we have a right to an economy and to operate within the economy,” he said.

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