Cannabis funding decision expected soon

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Cannabis funding decision expected soon

Medical cannabis cards come in three colors — green for patients, blue for agents and red for Cannabis Control Board members. Holly Kays photo

Cherokee issues first medical ID cards; tribe continues to work on product transport plan

In comments made during Tribal Council’s most recent meeting on Oct. 16, Principal Chief Michell Hicks said he hopes to have legislation delivering critical funding to the tribe’s cannabis enterprise ready for a vote within the next week.

“As soon as we advance that at a level that the Finance Office is comfortable with, we can bring that back to the table,” he said. “I know it’s a big decision, and I understand where employees are, but again, we’re trying to figure it out to make sure the tribe stays whole first in regards to this decision.”

So far, the tribe has appropriated $31 million to the project, a large sum that still falls short of the additional $53 million the company had asked for when it made its request to Tribal Council last December. Despite having $30 million worth of inventory in storage, the company is still not bringing in revenue because marijuana’s continued status as an illegal drug in North Carolina is preventing transport from the farm on Cooper’s Creek to the dispensary in Cherokee.

Without more funding soon, Qualla Enterprises will not be able to make payroll.

Also at issue, however, is the tribe’s financial position — an issue that was key to the 2023 tribal elections that seated Hicks in place of former Principal Chief Richard Sneed. During that campaign, Hicks said the tribe had overcommitted itself financially and tied its own hands by collateralizing its cash. On Oct. 16, Hicks said his administration was still working to understand the tribe’s financial status sufficiently to chart a path forward for Qualla Enterprises.

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This crossroads comes just as, in other ways, the stage is being set for success. Last week, the Cannabis Control Board issued its first patient cards, which entitle their holders to purchase cannabis from the tribal dispensary or grow the plants themselves — so long as the garden is located on tribal land. So far, the board has received 1,005 applications for patient cards, CCB Executive Director Neil Denman told the Cherokee Police Commission Oct. 12, of which 817 were approved. There were 129 incomplete applications, and 59 were denied because the applicant didn’t have a qualifying diagnosis. While medical cannabis is legal on tribal land only — not on state-controlled land in North Carolina — any N.C. resident is eligible to apply for a card.

Following a September election in which voters overwhelmingly endorsed legalizing recreational use , Qualla Enterprises’ consumer base is poised to grow even more. If Tribal Council passes laws in line with voters’ wishes, in the future any person 21 or older could legally buy cannabis products in Cherokee.

If, that is, Qualla can navigate the challenges before it now.

First, the funding. In December 2022, Qualla Enterprises told Tribal Council it needed $64 million to pay for staffing and development of indoor grow and retail facilities as it prepared for its first year of sales. But it received only $10 million of that amount due to federal guidance discouraging tribes from funding cannabis operations using gambling proceeds. Tribal leaders couldn’t come up with enough non-gambling money to meet Qualla Enterprises’ requests.

In a report shared with The Cherokee One Feather in May, Qualla Enterprises said it had hired 54 employees but expected to have 477 employees at full capacity. The company currently has 66 employees, Qualla Enterprises board member Marty Stamey said during an Oct. 12 work session.

In the Oct. 12 Cherokee Police Commission meeting, CCB Inspector Brian Parker said the enterprise is still lagging on infrastructure, too. Of the 69 hoop houses it plans to use, 42 have been installed — each hoop house can hold 2,040 plants — and Qualla Enterprises is still working to get phase three power out to the site. Currently, the farm is working on generators.

“They’re having to rent those generators monthly, and then the cost of diesel fuel every month to run the generators, it’s a big added expense,” Denman said.

Meanwhile, the company remains without a source of revenue because it has yet to find a legal way to transport cannabis from the farm to the dispensary. The farm is on tribal trust land, but driving to the main Qualla Boundary from that site requires traveling a short distance through Swain County land, where marijuana is still illegal. In a September interview, Cody White, associate counsel for the EBCI Attorney General’s Office assigned to the Cherokee Indian Police Department, said the tribe is still working on a solution that will allow Qualla Enterprises to operate without breaking any local, state or federal laws.

White said no further updates are available on that effort, but Qualla Enterprises appears to anticipate a resolution is forthcoming. In a Sept. 14 Facebook post, the company said it is aiming for a grand opening in late 2023.

Hicks proposed a solution to the funding aspect of Qualla Enterprises’ conundrum with a resolution submitted Monday, Oct. 9, that would have given Qualla Enterprises $19 million — but as a loan to be paid back with interest. At that time, he said he thought the resolution was headed in the “right direction” but asked that Tribal Council table the measure so he could gather additional information first.

The issue was likely discussed during an Oct. 12 work session attended by Tribal Council, Hicks, the Qualla Enterprises board of directors and attorneys for Qualla Enterprises and its vendor Sovereign Solutions Carolina. However, very little of that meeting was public. It began with about 13 minutes of introductions and opening discussion, followed by an hour and 15 minutes of discussion that was open to tribal members in the chamber but not broadcast online. Chairman Mike Parker then came back into open session long enough to inform the public that Council would go into executive session.

“We’re going to be protecting the confidentiality of some of the information we’re going to be discussing,” he said. “Again, we’re not trying to hide anything or anything like that from the public, but due to the sensitive nature of what we’re going to be talking about, we’re going to go off the air.”

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