Cherokee cannabis business shows forward movement

A sign along U.S. 19 points the way to Cherokee’s cannabis dispensary, but the shop has not yet announced an opening date. Holly Kays photo A sign along U.S. 19 points the way to Cherokee’s cannabis dispensary, but the shop has not yet announced an opening date. Holly Kays photo

After months of stalemate, the Eastern Band of Cherokee Indians appears ready to advance its cannabis enterprise.

During its Jan. 4 meeting, Tribal Council passed a long-debated funding resolution for Qualla Enterprises and introduced an ordinance that would legalize cannabis use for adults 21 and older. While the dispensary on Bingo Loop Road is not yet open, signs are up along U.S. 19 pointing the way to the Great Smoky Cannabis Company entrance around the back of the old bingo hall. 

Between March 2022 and December 2023, the tribe invested $34 million in its cannabis enterprise — a large amount that nevertheless fell short of the additional $50 million the company had asked for in December 2022. A year ago, Qualla Enterprises had expected to begin retail sales of medical marijuana by summer 2023, but so far it has yet to produce any revenues. This is due not only to its uncertain funding situation but also to the fact that transporting cannabis between the farm on Coopers Creek and the dispensary on the main Qualla Boundary requires crossing a short distance of county-controlled road, where cannabis is still illegal. 

When Principal Chief Michell Hicks took office in October, one of the first pieces of legislation he introduced was a resolution  proposing an additional $19 million for Qualla Enterprises — but as a loan to be repaid with interest rather than as a simple allocation. However, he recommended that Tribal Council keep the resolution tabled while he worked out some additional details. In November, Hicks requested the body’s approval for $3 million in stop-gap funding to keep the business operational. To get the rest of the $19 million, that resolution said, Qualla Enterprises would have to provide a final independent auditor’s report, product transportation plan and product testing plan, and complete “good faith negotiations” on the management agreement with vendor Sovereign Solutions Carolina.

It appears the company has met those requirements, though no details were made public during the Jan. 4 meeting. In fact, the funding resolution did not even appear on the public agenda. About halfway through the meeting, Chairman Mike Parker said the resolution had been inadvertently left off the agenda and asked Council members whether they were ready to take it up. However, Hicks asked that the conversation take place offline. 

“We want to talk about this obviously, but we have some information that we would like to not be aired,” he said. “It’s financial-related, just around tribal funds.”

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After that, Tribal Council went off-air for about an hour and a half, during which time they discussed several other items as well. When the body came back in open session, Parker offered a summary of the resolution — that it allows the tribe to lend money to Qualla Enterprises under “terms and conditions as may be required by the tribe and expressed in notes payable and agreements which shall be submitted to Tribal Council for approval.” He then acknowledged Attorney General Mike McConnell to present a floor amendment.

McConnell described the change only as a “short floor amendment to resolution number 7,” before Parker took a move and a second to accept the amendment and then pass the resolution, with both votes earning unanimous approval.

Nowhere in the discussion was the dollar amount of the loan mentioned or the contents of the amendment stated. The original resolution that Hicks submitted in October 2023 called for a loan of $19 million, though in the November 2023 Tribal Council meeting members had referred to a future approval of $16 million following the stop-gap measure allocating up to $3 million. Requests for clarification from tribal government and Qualla Enterprises had not been returned as of press time.

After the resolution passed, McConnell said that, if Tribal Council desired it, he would bring in a follow-up resolution for February stating that Qualla Enterprises had met the stipulations laid out in the November stop-gap funding resolution.

Though possession of small amounts of marijuana has been decriminalized on the Qualla Boundary since 2021, only medical cannabis is legal on tribal lands. Medical cards are being issued now , with all North Carolina residents eligible to apply. However, an even bigger shift could be on the horizon after 70% of EBCI voters endorsed a 2023 referendum seeking to legalize cannabis use for all adults 21 and over, regardless of medical status.

Implementing that measure requires action from Tribal Council, and this month the body took the first concrete step toward making it happen. The agenda included a new ordinance,  submitted by Tribal Council, that would retitle the chapter of Cherokee law currently called “Medical Marijuana” to read “Cannabis” and overhaul the text within it to allow for general recreational adult use. Cherokee law requires that new ordinances be tabled for at least 25 days after they are first introduced, so Tribal Council must wait until its February meeting to take action. The proposal is likely to look significantly different by then, McConnell said.

“There are going to be a lot of red lines in there, so we anticipate working with Carolyn [West, chair of the Qualla Enterprises Board of Directors] and other folks to bring you a substitute, a clean copy,” McConnell said. “I think the amount of redlining will make it very hard to understand, so just anticipate that.” 

The tribe expects its cannabis industry to become extremely lucrative, extremely quickly. Neither medical nor recreational cannabis is currently legal in North Carolina, Tennessee or South Carolina. Qualla Enterprises anticipates employing somewhere around 500 people and making enough money by fiscal year 2026 to send the tribe $260 million in profits. It’s also expected to make money for the tribe through generating tribal levy, akin to a sales tax. 

In April 2022, Tribal Council unanimously approved an ordinance change exempting modular homes and cannabis sales from the tribal levy, which adds 7.5% to the cost of goods sold on tribal lands. At the time, tribal business pursuits regarding both modulars and cannabis were under the control of Kituwah LLC. But during the Jan. 4 meeting, the body voted unanimously to pass another change to the ordinance, this time removing cannabis from the list of levy exemptions.

The Qualla Enterprises funding resolution and tribal levy ordinance await signature from Hicks to become effective.

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