“But they cannot operate in the licensed California market,” said Alex Traverso, a spokesman for the California Bureau of Cannabis Control, which oversees licensing of dispensaries.
For the past couple of years, some tribes have been trying to change that. But the state insists that its regulators must have control over any operations on reservation land, something tribal officials say is unacceptable. The ability to regulate themselves in all matters is a basic tenet of their sovereign status as independent nations, they say.
The result is that tribes have been shut out of the far more lucrative California cannabis market because they can’t sell their product beyond tribal land.
Recently, the Iipay Nation of Santa Ysabel in northeast San Diego County opened a dispensary inside what used to be a casino that failed in 2014. The Mountain Source Dispensary is the first on tribal land in the county but probably won’t be the last.
Most of the former casino building for the past few years has been home to the Santa Ysabel Botanical Facility, where marijuana is grown and a sophisticated laboratory operates, run by private cannabis companies leasing the space from the tribe.
As of now, Santa Ysabel can sell the marijuana grown on the reservation only at its lone dispensary or to other tribal operations.
David Vialpando, the head of the Santa Ysabel Tribal Cannabis Regulatory Agency, said he expects other local tribes to open dispensaries.
“We have other tribes that have expressed an interest with doing business with Santa Ysabel’s tenants,” he said. “As predicted, there will be additional dispensaries opening up on tribal lands throughout California.”
He said discussions are being held with a couple of local tribes. “I don’t think there are any plans in place,” he said. “Everybody moves cautiously in this space. But the expectation is that there will be other tribes in the area that will take advantage of the need that is out there.”
For two years, 23 of the state’s 109 recognized American Indian nations have been working on legislation in Sacramento that would allow tribes to enter the general California cannabis market. They’ve met with lawmakers and representatives of the governor’s office and hired lobbyists, including former lieutenant governor Cruz Bustamante (D), to press their cause.
Vialpando, in addition to his position with Santa Ysabel, is also the executive director of C-NACA, the California Native American Cannabis Association, which includes five of the county’s 18 federally recognized tribes as members: Campo, Los Coyotes, Manzanita, Santa Ysabel and Sycuan.
Of those tribes, only Santa Ysabel and a representative of Sycuan provided information.
Adam Day, chief administrative officer for the Sycuan Band of the Kumeyaay Nation, said the tribe is closely watching the market but would not say whether the successful East County gambling and resort tribe is seriously thinking about getting into marijuana.
“It’s certainly in Sycuan’s interest to ensure that if there is an industry that others are allowed to participate in, we want to have that opportunity as well,” Day said. “I can tell you we don’t have a current business in that field. But we are actively looking at exploring the issue to ensure that if we were ever to get into that field that we have the ability to do so.”
Vialpando said after the passage of Proposition 64, C-NACA was formed, and meetings were held with numerous people at the state Capitol.
“We met with state officials and were basically told by folks from the governor’s office, ‘Look, you weren’t included in Prop. 64. There is no place for tribes in the California market. Do whatever you want on the reservation. We have no control over that. But there is no provision for the state to allow tribes to participate, or even nontribal entities on tribal lands.’ ”
Vialpando said it was suggested that C-NACA work toward legislation, and twice bills were proposed to create a path for tribes to the cannabis market.
“Each time, those failed because there was a large constituency of stakeholders that were opposed,” he said.
So the tribal cannabis organization hired Bustamante, and many more meetings were held.
“There was a lot of time and energy and money spent on this grass-roots effort to create legislation that was fair to tribes and acceptable to the state,” Vialpando said. “And we did it. We managed to turn all of those who were opposed into either supporters or [to agree] to taking no position. Even the California Cannabis Industry Association became supporters. . . . We had a groundswell of support and thought we were good.”
A bill sponsored by Democratic state Assemblyman Rob Bonta was about to go to the legislature.
“I believe tribes absolutely deserve the right to participate in the same legal, regulated cannabis market as other stakeholders,” Bonta said in a statement.
“Our past legislative efforts have proposed policies that were consistent with the principles of tribal sovereignty and self-governance and would have achieved this objective while protecting the public and the environment.”
But shortly before the bill was to be heard, a final meeting at the governor’s office killed everything.
“We were told they didn’t think legislation was needed at all,” Vialpando said. “They said just defer all regulatory authority to the state. They wanted the state to regulate all aspects of cannabis on tribal lands and to make sure revenues are shared with the state.”
Basically, Vialpando said, the state demanded that the tribes waive their sovereignty. “They wanted us to waive our identity,” he said. “That was a nonstarter.”
After that meeting, the proposed legislation fell apart, and Santa Ysabel changed its tribal statutes to allow dispensaries on their reservations “as a pathway for our nontribal commercial businesses to actually continue operating without going into economic extinction.”
The tribes now hope that Gov. Gavin Newsom (D) will be open to the idea of working with them to create a way to allow their entry into the lucrative marketplace. Letters have been sent, but the governor’s office has not indicated a willingness to talk.
With little fanfare or advertising, the Santa Ysabel dispensary opened in early February. Since media reports about the operation were written, business has boomed, Vialpando said. The dispensary is averaging about 60 customers a day despite its remote location off State Route 79. The majority of its customers are older people “with canes and walkers” looking to buy cannabis to manage various pains.
“The old myth of marijuana dispensaries attracting all the tweakers in the area is just not our experience, and we don’t expect it to be the experience of other tribes who replicate our regulatory model,” he said.