December 18th, 2018 by David Kemp

Editor's Note: We are proud to present this piece, which was written primarily by our very talented co-op student, Damyn Libby, who is currently finishing a degree in Indigenous Studies at UBC's Okanagan campus. This area was of particular interest to him due to his area of study at UBC and his Métis heritage. A big thank you also to Stephen Mussel, a lawyer practicing in Aboriginal Law at Mandell Pinder LLP, for offering his perspective and suggestions.

A New Opportunity

Since the election in 2015, the production and sale of cannabis, and the coming into force of the Cannabis Act, has been a huge topic of discussion across Canada. With all this talk though, it seems that Indigenous peoples and communities have been left out of this conversation for the most part. Very little, if any, consultation was made by the federal government with Indigenous groups across the country during the creation of the Cannabis Act legislation. This is a major oversight, because this exciting development has created great opportunities for Indigenous peoples to participate in the now-legal recreational marijuana market.

Because the topic of cannabis on reserve lands is a huge topic, I focus on one aspect of this issue – why would I, as an Indigenous business person, create my recreational cannabis business on my reserve lands as opposed to within a municipality? I will first look at how cannabis is treated on reserve lands vs within municipalities, and will then do a minor case-study looking at an Indigenous-run cannabis business operated on reserve lands.

Now let’s get into this, what are the differences between reserve lands and municipalities within the grand scheme of establishing a cannabis business?

When it comes to licensing, they are the same. Band councils, just like municipal governments, ultimately have the final say on the establishment of recreational dispensaries. One of the major differences is that decisions that band councils make can affect both on-reserve and off-reserve members of an Indigenous community. Obviously, this differs from municipalities, because the decisions that municipalities make will only affect you if you own property or reside in said municipality.

If you are born in Kelowna, but you live in Edmonton, decisions that the municipal government makes in Kelowna will not affect you. But, if you are a member of the Blackfoot in Alberta and you live off reserve land, the decisions that the Blackfoot government makes, can still affect you as a member of that nation.

Cooperation and Partnerships

Another major difference is that Indigenous nations can agree to partnerships on a nation-to-nation basis or from a band-nation basis to form their own cannabis businesses that utilize a combination of different reserves for both cultivation and the sale/distribution of cannabis. Typically, different bands fall within the same nation. A perfect example of this is the Okanagan Nation. They have bands in Osoyoos, Lower Similkameen, Westbank, Vernon (Head of the Lake)…etc. but together, they all comprise the Okanagan Nation. Of course, you want to see your band succeed, but more importantly you want to see your nation succeed.

Bands can work in unison to benefit an entire nation. Just as, nations can work together to improve each other’s nations too. An example of this is the 6 Nations-Alliance in Eastern Canada and Northern Michigan. They are the largest nation of First Nations peoples in Canada with over 25,000 members. They are comprised of six different and distinct nations (Tuscarora, Oneida, Mohawk, Cayuga, Onondaga, and Seneca) that work in unison in order to benefit all members of each nation.

They share lands, they share government, and they share economies. This agreement between these nations benefits all. In terms of creating a cannabis business, Indigenous bands/nations can offer reciprocal relations that can benefit all involved. Interestingly, Six Nations is in the process of drafting their own laws pertaining to recreational Cannabis and Cannabis ventures within their lands.

Partnerships between nations allow for all of their nation’s members to thrive. This is the case for an Indigenous run cannabis business called ‘Indigenous Roots’, which I will get into later in this article.

This is something a municipality would be unlikely to do, because this would involve the municipalities ultimately sharing profits with one another. Instead, municipalities would be more likely to retain a recreational cannabis business within their own borders, in order to maximize tax revenue, jobs, and so on.

Case Study - Indigenous Roots

Indigenous Roots is made up of Indigenous peoples throughout Canada, from different nations throughout the country. They are currently in the process of creating their own headquarters and training facility right here in the Okanagan Valley. Their plan is to distribute the cannabis they grow to numerous different bands, and some privately-run dispensaries. The whole premise of their business plan is founded on the inclusion of Indigenous peoples in Canada in regards to Cannabis businesses.

The intent of Indigenous Roots is to retain the money made from cannabis ventures within the Indigenous communities that choose to participate. Indigenous Roots was created by ex-Assembly of First Nations National Chief, Phil Fontaine. Chief Fontaine has partnered with an already established licensed cannabis grower, the Cronos Group (49.9% ownership of Indigenous Roots).The plan for Indigenous Roots is to take participating Indigenous members from various different communities, who will then be trained at a 30,000 sq. ft. training facility that will be constructed on the premises of Original BC Ltd. (Original BC Ltd. is a subsidiary of Cronos). Once they have finished training, the participating members will operate on a franchise model.

Cultivation of cannabis will occur on a variety of different reserves and they will employ band members from participating communities to assist in growing the business.

This will be a revolutionary change to the way that cannabis businesses operate. This is why Cronos (an already established cannabis giant) is taking part in this venture. They see the possibility of this venture reaching new limits that the cannabis market has yet to reach. Indigenous Roots has been garnering a lot of attention since its inception in December, 2016. Indigenous Roots has already met with more than 100 Indigenous leaders and communities throughout Canada, currently they are in the process of finalizing their capital raise, and they are a publically traded company.

Why should I as an Indigenous business person create my cannabis business on my reserve, as opposed to within a municipality?
  • I would be positively affecting my band members by promoting and encouraging participation within a band-run business that can generate a lot of income.
  • With this newly generated income and with band support I could establish treatment/addiction centres and other health resource centres.
  • I would act as an example of an Indigenous-run business, which could be used as a template for other Indigenous business persons that might feel encouraged to participate in a similar business endeavor.
  • I would have the opportunity to help ensure the well-being of future generations by creating jobs and educating youth about the consequences of the continued usage of cannabis within a culturally-relevant framework.
  • I would have the opportunity to not only assist my own nation and peoples. But, by creating a business that promotes the partnership and inclusion of other Indigenous nations, I would be benefitting all nations and peoples involved.
  • Due to the pre-existing tax mechanisms derived from the Indian Act there are also tax incentives to creating a cannabis business on reserve lands:
  • Status First Nations (any) persons could be employed by an on-reserve operation and they would not be subject to taxation on income earned as this is considered “personal property” for the purposes of section 87 of the Indian Act;
  • If the operation is entirely on-reserve and owned by a person that is status First Nations (any), business income will also not be taxable pursuant to section 87.

There are some really exciting possibilities available to those who decide to create a cannabis business on their reserve lands, and I encourage you to consider the possibility.

In Conclusion

Indigenous people in Canada have the opportunity to thrive, create businesses, employ band members, and utilize the revenues to support culturally-relevant educational materials surrounding the effects of cannabis. This is up to Indigenous peoples now as the federal government has thus far left Indigenous peoples out of the conversation. I encourage you to start this important discussion in your communities - it is up to you to allow for your peoples’ voice to be heard, to look out for the welfare of the individuals in your community, and to create your own cannabis venture.

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