Minnesota Governor Signs Tribal Cannabis Compact Allowing Off-Reservation Dispensaries

Minnesota Gov. Tim Walz signed the first tribal-state cannabis compact on May 20, providing the White Earth Nation the go-ahead to operate off-reservation dispensaries throughout the state.

The compact was authorized under Minnesota’s adult-use cannabis legalization bill that Walz signed in May 2023. Two years later, the state still has yet to launch a commercial marketplace for private businesses, as the Office of Cannabis Management (OCM) continues to navigate a licensing process that’s scheduled to begin with a series of lotteries next month.

This week’s legal agreement outlines how Minnesota and the White Earth Nation of the Minnesota Chippewa Tribe—one of 11 federally recognized Indian tribal governments in Minnesota—will establish a cooperative that mutually benefits both entities in the regulated cannabis space while promoting public health and safety.

The largest of the 11 reservations in the state, the White Earth Nation’s boundaries encompass more than 1,300 square miles of land in northwestern Minnesota.

As a result of the compact, the White Earth Nation’s cannabis enterprise, Waabigwan Mashkiki, plans to open its first off-reservation dispensary in the coming week in Moorhead, located just across the state border from Fargo, N.D., CEO Zach Wilson told Minnesota Public Radio News.

“It’s just such a historical moment for not only White Earth and the tribes in the state of Minnesota, but really, this is going to help set a precedent nationwide of what type of compacts can be drafted, can be negotiated and worked on throughout the country,” Wilson told MPR News.

Under the compact, Waabigwan Mashkiki can operate up to eight off-reservation dispensaries throughout the state; however, tribal nations are limited to one retail location per city and three per county, according to the OCM. Furthermore, the White Earth Nation can issue one cultivation license to a tribal enterprise for no more than 30,000 square feet of canopy, according to the compact.

While any forthcoming tribal-state cannabis compacts in Minnesota will be unique, all legal agreements will share certain fundamental similarities, such as the assurance that tribal regulatory agencies will license and regulate their cannabis entities by standards that equal or exceed those established by the OCM.

The compact signed this week allows the White Earth Nation to:

• purchase cannabis from state-licensed businesses to sell within or outside its tribally regulated land;
• sell cannabis grown or produced by a tribal enterprise or licensed tribal business to a state-licensed cannabis business; and
• deliver and transport cannabis outside of its tribally regulated land.

“The parties agree that it is in their best interests to enter into this compact to protect public health and safety, ensure a lawful and well-regulated cannabis market, encourage the tribe’s economic development, provide fiscal benefits to the tribe and the state, while recognizing that unregulated cannabis activity threatens the tribe’s health, safety and welfare,” according to the 88-page compact.

While White Earth is the first tribal nation to strike a cannabis compact in Minnesota, it’s not the state’s only sovereign community participating in the cannabis business.

The Prairie Island Indian Community (PIIC) launched its cannabis business venture, Island Peži (pronounced “pay-zhee,” meaning grass), to serve those 21 years and older earlier this year with a retail facility located along the Mississippi River and just across the state line from Wisconsin. Red Lake Nation also operates in the cannabis space.

While tribal communities nationwide began tapping the gaming industry as an economic driver, starting with high-stakes bingo in the early 1980s and then casinos following the Indian Gaming Regulatory Act of 1988, cannabis has more recently become another avenue for financial sovereignty within the past decade.

In late 2014, Monty Wilkinson, then-Director of the Executive Office for United States Attorneys (EOUSA), issued a memorandum that extended certain federal protections provided to state-sanctioned cannabis businesses to Indian Country.

The previous year, then-Deputy Attorney General James M. Cole had issued a memorandum (the “Cole Memo”), directing federal prosecutors and the Department of Justice (DOJ) to take a hands-off approach to enforcing federal cannabis prohibition against state-legalized operations and instead focus on preventing cannabis distribution to minors, criminal enterprises and diversion, among other federal priorities.

While Minnesota’s tribal-state cannabis compact recognizes that former U.S. Attorney General Jeff Sessions rescinded the Cole and Wilkinson memos under Donald Trump’s first presidential term in 2018, it suggests there has been “little practical change” to federal enforcement policies on state cannabis programs since.

“A review of federal prosecutions involving cannabis reflect[s] no cases of purely state-compliant cannabis activity,” according to the compact. Furthermore, the compact suggests that the DOJ’s proposed rule from May 2024 to reclassify cannabis as a Schedule III drug under the Controlled Substances Act (CSA) “indicates a continuance of the spirit embodied by the policy set forth in the Cole Memorandum and the Wilkinson Memorandum.”

However, the compact also acknowledges that the legal agreement between Minnesota and White Earth does not “insulate” the tribal community from federal enforcement of the CSA.

And although Trump signaled his support for states’ rights to pass cannabis laws, the question of tribal sovereignty as it relates to cannabis was raised during the U.S. Senate Judiciary Committee’s confirmation hearing last month for Terry Cole, whom Trump nominated to lead the Drug Enforcement Administration (DEA).

U.S. Sen. Thom Tillis, R-N.C., asked Cole for clarity on the Eastern Band of Cherokee Indians (EBCI), which controls the roughly 57,000-acre Qualla Boundary in western North Carolina, where it commenced adult-use cannabis cultivation and sales last year despite prohibition policies in the state.

In March 2024, Tillis and fellow North Carolina Sen. Ted Budd sent a letter urging various government agencies, including the DOJ and DEA, to “uphold current federal and state laws” related to the EBCI’s cannabis operations colliding with U.S. and North Carolina prohibition.

Notably, Tillis and Budd accused the EBCI of utilizing roughly a half-mile stretch of state-owned roads to transport cannabis from its cultivation site to its dispensary.

Tillis, a member of the Senate Judiciary Committee, confronted Cole with this same insinuation during the confirmation hearing last month.

“Unless they’re using teleportation, it’s not clear to me how they can grow it here and sell it in the boundary without having gone through a territory that’s illegal,” Tillis said.

Cole said that, if confirmed as the next DEA administrator, Tillis had his commitment that he’d look into that specific tribal operation, adding that he’d consult with the Office of the U.S. Attorneys and the chief counsel at the DEA.

Cole also said that the state-by-state patchwork of legalization and the regulatory variances surrounding hemp-derived cannabinoids are “definitely worthy of a working group” because the federal government needs “to stay ahead of it” from a law enforcement standpoint.

While “one of the roles of the federal government, since the time of this nation’s founding, has been to protect tribal nations from state regulation, intrusion, and overreach,” according to the U.S. Department of the Interior, it’s unclear how the federal government will (or won’t) react to Minnesota’s tribal-state cannabis compact.