The Eastern Band of Cherokee Indians receives $63 million for cannabis
The general manager of Qualla Enterprises told the Tribal Council that it gave them a lot of confidence that they were surrounded by people with cannabis experience.
When we do this right, that number is precise because we were put in a position to learn from other people's cannabis mistakes. We are trying to cover all the things that we don't know. We actually know what we know.
The Eastern Band of Cherokee Indians Cannabis Advisory Commission was created in order to study cannabis-related issues after the Tribal Council voted to establish a medical marijuana program on the Qualla Boundary. Qualla Enterprises was registered with N.C. Secretary of State in July of 2022.https://sokocanna.com/
Qualla Enterprises is considering the possibility of future expansion to general adult cannabis use, even though the tribe has yet to authorize the production of marijuana for that purpose
Criminal penalties for possession of 1 ounce or less of cannabis or 0.15 ounces or less of hashish were removed by the Tribal Council. If the program opened to general adult use, the company estimates it can produce and sell as much as $350 million in medical marijuana. The larger capacity needed to reach the $350 million mark would be accommodated by the $63 million facilities.
He said that the infrastructure and facilities were designed to be able to produce that and to be honest with you. In an adult-use situation, we can sell that.
The cannabis money will be used to complete a strategic plan presented to the Tribal Council by Qualla Enterprises. Increased staff, an indoor grow facility and a retail facility are included in the plan. The company is expecting a high return on investment.
"I have never seen that opportunity in my time here."
There was spirited disagreement as to how federal law should affect financial planning.
The financial side of the business was worried about how cannabis illegal status would affect it.
The Bank Secrecy Act of 1970 prohibits banks from accepting money from illegal sources, including the sale of cannabis
Will our local bank accept that deposit? Sneed wanted to know.
According to the U.S. Treasury Department, banking cannabis revenues can be done correctly. He said that as of a year ago, there were over 500 banks and 169 credit unions in the US.
He said it's just more paperwork. It is more of a challenge, but some banks have decided to do that. There is no question that it's okay for the bank.
It was more difficult to dismiss Sneed's other concern. The Indian gaming regulatory act does not allow gaming proceeds to be used to fund illegal activities, he told the Tribal Council. Cannabis is still illegal despite federal policy becoming more favorable over the past decade.
Sneed said that they don't have $62 million in non-gaming cannabis revenue sitting in the general revenue fund.
The idea that the federal government can dictate how the tribe uses its own money is offensive.
She said that where we spend our money is up to them. I agree with that. They don't get to tell us where to spend the money and we don't have to.
There is no reason to shut down the gaming operation to lift the cannabis project up. Half of the tribe's budget for 2022-23 comes from gaming proceeds as well as twice-yearly distributions.
If we were to say that we were going to use gaming revenues to fund this, then what we would put at risk is being shut down at our gaming operation by NIGC for being out of cannabis compliance with federal law. If it says that, I won't jeopardize closing the casino using gaming money.
Carolyn West, chair of the Qualla Enterprises board, suggested an cannabis amendment to keep gaming revenues out of it, which would be funded with $10 million from tribal levy funds, which are not connected to gaming, and a loan to cover the rest. Dike Sneed and David Wolfe were the only ones who voted against the amendment.
The Tribal Council made decisions about the board. Four members voted to table and six voted to pass the new compensation structure for the board. The chairman, vice chairman and other members will be paid an annual amount.
The resolution was tabled by Painttown Representative Dike Sneed. The votes were cast by Wolfetown Rep. Bo Crowe, Yellowhill Rep. T.W. Saunooke and Birdtown Reps.
The names were presented to the board. Four of the five board members go through the nomination and appointment process. Vice Chairman Albert Rose and Yellowhill Rep. T.W. Saunooke had been sitting in two of the seats for six months without pay. There are now three vacancies.
Sneed submitted a proposal about whether to consider the cannabis legislation. Sneed asked Council why the resolution wasn't on the agenda, given that he submitted it on time and in the proper format.
Richard French said it was left off because Sneed didn't submit his resume for the recommended candidates until the morning. Six people have been appointed to a seat, without a confirmation hearing, since the board was formed.
The precedent has already been established that the board appointments don't go through a confirmation process
There isn't a tribal law that governs how cannabis appointments are made. It would take another two or three months for new members to be seated. He said that they needed people on the board. None of the current members have a finance background. The company has spent $21 million so far and will soon have an additional $63 million at its disposal.
Sneed said that his third candidate is still ensuring he will be able to take the position and that he recommended only two names. Beth Grant has a bachelor's degree in business administration and Jacob Reed holds a master's degree in business administration. Both are members of a tribe.
The tribal council approved Sneed's cannabis nominations without opposition and added a six-month period to the appointments.
Chief Sneed needs to act to become effective.
Keywords: Tribal Council, Qualla Enterprises, Sneed, Yellowhill Rep