The federal bureaucracy hasn’t yet caught up with the law where hemp cultivation and commerce are concerned — leaving a lot of would-be entrepreneurs and enterprises in the lurch.
Legislation is now pending on Capitol Hill that calls upon the Food & Drug Administration to finally regulate CBD products, addressing a dilemma that has been outstanding since hemp-derived CBD was legalized under last year’s Farm Bill. The failure of the FDA to create regulations for CBD as a food additive or drug means many such products actually remain illegal — despite the clear will of Congress.
The U.S. Department of Agriculture has also failed to bring its regulations into conformity with the Farm Bill. The USDA in late May issued a memo establishing protocols for interstate commerce in hemp. But it has still failed to provide any legal clarity on the question of hemp cultivation, including on Native American tribal lands.
Given the unique jurisdictional status of such lands, it is the USDA that has the authority to permit and oversee such cultivation. Its failure to issue regulations on the matter is another legal hindrance to Native American cannabis cultivation.
Now the USDA is under pressure from litigation. The Flandreau Santee Sioux Tribe has launched suit in a South Dakota federal district court, seeking to force the USDA to approve its plan to regulate hemp production on tribal lands — or get out of the way.
Bureaucracy Bottlenecks Tribal Sovereignty
Under provisions of the Farm Bill, states must submit their plans for hemp cultivation to the USDA for approval before planting can begin. For South Dakota, this doesn’t really matter anyway, as Gov. Kristi Noem in March vetoed a bill that would have allowed hemp cultivation in the state. The good news is that since Indian reservations are considered sovereign entities under federal law (just like states), they may apply separately to cultivate even if the state they are situated in doesn’t allow it.
The bad news is that the USDA hasn’t issued its own regulations for approval of such plans, meaning everything is at a standstill.
According to the Farm Bill, both state and tribal hemp plans must be approved by USDA within 60 days of being submitted. The USDA received the Santee Sioux plan back on March 8, and the tribe made clear that it had already invested money in anticipation of planting a hemp crop in 2019. The tribe says the USDA’s inaction on the plan places it at jeopardy of losing a revenue source it counted on.
“A delay in approval of the tribal plan and unlawfully withholding tribal authority curtails receipt of the tribal revenue from hemp production at grave cost to tribal members, putting tribal members’ health, safety, and welfare at risk,” the lawsuit states, according to the Argus Leader in Sioux Falls.
Instead of approval, the tribe received a letter dated April 24 from Agriculture Secretary Sonny Perdue, saying that no plans would be approved until the USDA established regulations to oversee hemp cultivation and that these regs are not expected to be completed until this fall.
On June 6, the case was dealt a setback when Judge Karen Schreier in Sioux Falls denied the tribe’s request for a preliminary injunction that would have allowed cultivation to commence. The Santee Sioux must now wait until the case is resolved or until the USDA approves the tribe’s production plan, Sioux Falls’ KSFY reported.
The court concluded that the Farm Bill “provides exclusive authority to the Secretary to issue rules and regulations” relating to hemp. The court continued: “A harmonious reading of the statute lends to the likelihood that the 60-day window to approve or deny a plan does not begin until regulations are promulgated by the USDA.”
The USDA on June 24 had a series of “summary descriptions” of pending regulations published in the Federal Register. Among these was “Establishment of a Domestic Hemp Production Program.” It noted: “This action is required to implement provisions of the Agriculture Improvement Act of 2018 (Farm Bill).” The timetable for this regulation indicated that an “Interim Final Rule” would be ready by August — too late in the year for the Santee Sioux to plant a hemp crop.
First Crop Was Burned — And Not the Good Way
The Flandreau Santee Sioux voted to legalize cultivation and use of cannabis on their tribal lands in June 2015. Later that year, tribal leaders announced plans for the addition of a cannabis-themed resort to the reservation’s successful casino. Marijuana grown on the rez was to be available in a new nightclub and “smoking lounge.” Plans for “social consumption” of cannabis were being pioneered by the Santee Sioux before various states and municipalities around the country started pursuing the idea. “We want it to be an adult playground,” tribal president Anthony Reider told the Associated Press at the time.
But that November, the Tribal Council voted to temporarily suspend their marijuana operation. Immediately after the vote, the tribe’s first cannabis crop was burned in the fields.
The decision was taken after South Dakota officials, including then-Attorney General Marty Jackley, warned that legalization on the reservation would only be seen as applying to tribal members. Therefore, non-tribal members using cannabis on the reservation risked prosecution under state law. Rather than risk a confrontation with state authorities, the tribe agreed to suspend the project.
However, the move was explicitly seen as a tactical retreat. Tribal attorney Seth C. Pearman said in a statement, published by Indian Country Today: “After government-to-government consultation with the United States, the Flandreau Santee Sioux Tribe is temporarily suspending its marijuana cultivation and distribution facilities. This suspension is pivotal to the continued success of the marijuana venture… The Tribe will continue to consult with the federal and state governments and hopes to be granted parity with states that have legalized marijuana. The Tribe intends to successfully participate in the marijuana industry, and Tribal leadership is undaunted by this brief sidestep.”
After this setback, hopes were revived for reservation hemp cultivation after the passage of the Farm Bill last December — only to be met with frustration yet again, this time by USDA foot-dragging.
The Santee Sioux are certainly owed a little bit of long-delayed justice from Uncle Sam. Their history is the all-too-familiar one of expropriation of their traditional lands, followed by forced relocation.
The Santee Sioux briefly made news in December 2012, when tribal members made a horseback pilgrimage to Mankato, Minnesota. The cross-country ride was made to commemorate the 150th anniversary of the 1862 mass public hanging there of 38 Dakota Sioux men, for crimes allegedly committed in that year’s U.S.-Dakota War, the largest mass execution in U.S. history. The execution order was personally signed by President Abraham Lincoln. After the war, the Dakota were pushed west from their Minnesota homeland and became known as the Santee Sioux. They settled at Flandreau, and a second Santee Sioux Reservation in Nebraska.
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