The legalization of recreational marijuana in California left American Indians out in the cold.
Proposition 64, approved by voters in 2016, lets local governments decide whether to allow cannabis dispensaries to operate within their jurisdictions. But it made no provisions for tribes.
As far as the state is concerned, tribes can do whatever they want with cannabis on their reservations, which are considered sovereign nations.
"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, a number of tribes have been trying to get that changed. 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 Indian tribes have been shut out of the far more lucrative California cannabis market because they can't sell their product beyond tribal lands.
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 most likely will not be the last.
Most of the former casino building for the past few years has hosted 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 only the marijuana grown on the reservation 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 cannabis California market. They've met with lawmakers, representatives of the governor's office, and hired lobbyists, including former Lt. Gov. Cruz Bustamante, 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: Sycuan, Campo, Manzanita, Los Coyotes and Santa Ysabel.
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 gaming 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 non-tribal 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 grassroots 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 Friday 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 non-starter."
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 non-tribal commercial businesses to actually continue operating without going into economic extinction."
The tribes now hope that Gov. Gavin Newsom will be open to the idea of working with them to create a way to allow Indians to enter the lucrative California marketplace. Letters have been sent, but so far no indication has come from the governor's office about 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. They are now averaging about 60 customers a day despite its remote location off state Route 79. The majority of customers are older people "with canes and walkers" looking to purchase 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.
News of the Santa Ysabel dispensary upset San Diego County Board of Supervisors Chairwoman Dianne Jacob. The county took the position in 2017 not to allow dispensaries in the unincorporated parts of the county. All of the reservations in the county are in unincorporated San Diego, albeit on their own independent reservations.
She then wrote to the attorney general's office looking for clarification of the law.
"I am concerned that the cannabis dispensary on the Santa Ysabel reservation is operating in the dark with little to no oversight," Jacob wrote. "This constitutes both a public safety and a public health hazard for those who visit the dispensary, and for the surrounding community due to impaired drivers navigating the rural area's challenging roads."
The attorney general has not yet responded, Jacob's office said.
Reacting to the letter, Santa Ysabel sent Jacob a letter inviting her to the reservation to see for herself what is happening. It said cannabis regulations under which the tribe operates are in many instances stricter than those enforced by the state anywhere else in California. They also point out that the operation employs about 100 people, making it one of the biggest employers in that part of the county.
"We welcome the opportunity to address any concerns you may have, answer any questions, and engage in constructive dialogue designed to ensure the safety of customers and employees working at the Santa Ysabel Botanical Facility and maximize our effectiveness in ensuring the accountability of cannabis cultivated, processed, and distributed from the Nation's lands," Santa Ysabel Tribal Chairman Virgil Perez wrote.
"One of the reasons we would love to have the supervisor or members of her staff come up is to allay some of the fears and concerns, and to certainly seek her input on how we can do things better," Vialpando said.
A spokesman for Jacob said Friday that the supervisor intends to take the tribe up on its offer. A date has not yet been set.
