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MAR 10 - MAR 17, 2015

Native American Marijuana Production
A Bad Bet for Niagara County Taxpayers

By Mike Hudson

March 10, 2015

Native American tribes may try to grow and sell marijuana.

Back before the turn of the century, after more than a decade of bickering between bitterly divided state Legislatures ostensibly "led" --- like herded cats --- by this or that, governor suffering from delusions of grandeur, the question of legalized gambling in New York State was being hotly debated.

When the Democrats held the Governor's Mansion and the state Assembly, Republicans in the state Senate put the sword to this or that proposal.

And, after the GOP invested considerable to achieve the governorship while still retaining their Senate majority, Democrats torpedoed legalized gaming initiatives, some of which they had enthusiastically supported previously.

Suddenly, a daft idea was pounced upon.

Legislators from both parties found a way to relieve themselves of the onerous responsibility of seeming to approve of a sinful activity they had actually approved of all along.

They dumped casino gaming square into the waiting lap of the Iroquois Confederacy, remnants of the Six Nations that had ruled over New York State until the arrival of the Europeans in the early 17th Century.

Scattered across the state, from the Hudson River Valley in the east to the shores of Lake Erie in the West, the reservations of the modern Iroquois tribes were suddenly seen as the ideal locations for gambling ghettos.

Especially upstate, argued spineless politicians of both parties, the "local share" of casino revenues kicked back to the host communities, would go a long way toward breathing new life into the moribund economy of the region.

On the Niagara Frontier, politicians were particularly eager to give their disgruntled constituencies the mistaken impression that something was being done to address their economic plight. Virtually no serious opposition to the Indian casino plan could be found.

On the Niagara Frontier, everyone from Gov. George Pataki to state Sens. George Maziarz and Byron Brown, state Rep Francine DelMonte, Buffalo Mayor Anthony Masiello and Niagara Falls Mayor Irene Elia got behind a proposal served up by the local branch of the Iroquois Confederacy, the Seneca Nation of Indians.

The Seneca spent millions lobbying for passage of the legislation and positioning themselves as the frontrunners to open the first Indian casinos in the state.

Their investment paid off handsomely. The Seneca were granted the right to build three casinos, one in Niagara Falls, one in Buffalo and one in Salamanca. Now, after nearly 15 years, the results of the state's deal are more than clear.

In Niagara Falls, not a single permanent private sector job has been created as a result of the tens of millions of dollars in casino revenue thrown at City Hall. Unemployment, poverty and crime remain chronic and debilitating problems, the residential neighborhoods immediately adjacent to the casino property are in even worse shape than they were before the casino opened and educated, motivated, taxpaying citizens continue to leave the city in droves.

And now, some would like to see the production of medical marijuana in New York handled in exactly the same fashion.

A few weeks ago, some 75 tribal leaders from across the country met to discuss forming the first "Tribal Cannabis Association" at the Tulalip Resort Casino on the Tulalip Reservation in Washington State. The conference was organized by Robert Odawi Porter of Odawi Law PLLC, a former President of the Seneca Nation of New York and by Washington state cannabis business attorneys Hilary Bricken and Robert McVay.

Porter was a leading figure and Seneca Nation lobbyist during the casino gaming giveaway, and his status as organizer of the conference is troubling.

"This issue was a historic moment for the United States and what the Justice Department did was to invite Indian country to have a historical moment. No different than any other major decision our ancestors have had to make," Porter said. "Tribal leaders are now going to have the same opportunity to think through whether legalizing marijuana was a good thing. I'm hopeful that today's event was part of a beginning process of providing quality information and informing leadership, informing their employers and other staff and community members and hopefully continue that process in the coming days and weeks."

Porter was referring to a memo issued by the Department of Justice in October 28, 2014 instructing all U.S. Attorneys to not pursue prosecution of federally-recognized tribes that chose to legalize and regulate marijuana if they meet priorities laid out in a memorandum issued by the Attorney General's office in 2013.

These include things like preventing distribution of marijuana to minors and preventing revenue of sale of marijuana to criminal enterprises.

A keynote speaker at a "Tribal Marijuana Conference," also organized by Porter and held prior to the cannabis legalization event, was former U.S. Attorney Troy Eid, present chair of President Barack Obama's National Indian Law and Order Commission.

The stakes in this new game are that high.

California's Pinoleville Pomo Nation is poised to become the first American Indian tribe to grow medical marijuana, though investors claim at least 100 additional tribes are exploring their options.

Pinoleville is expected to break ground on a 100,000-square-foot greenhouse within 60 days, said Barry Brautman, president of FoxBarry Companies, a group of Kansas-based operations that specialize in developing Native business enterprises.

Several other tribes may also join the marijuana industry this spring, Brautman said. He declined to name the tribes, citing confidentiality agreements, but said his company has fielded queries from more than 100 tribes—most since December when a federal Justice Department memo became public and stated that sovereign Indian nations can choose to grow or sell marijuana on tribal lands without fear of federal harassment.

With more than half of the country's 1 million medical marijuana patients registered in California, the state easily has the biggest market. It is also home to more than 100 federally recognized tribes, making it the prime location to launch tribally owned marijuana operations.

"California has the most fruitful market, but there's opportunity in Florida and on the East Coast," said Derek Peterson, CEO of Terra Tech, a hydroponic farming company with operations in New Jersey and California that joined the medical marijuana industry in January 2014.

"We're finding that the best markets are large areas with dense populations," he said. "States with big populations but struggling marijuana programs."

Investors likely will go after tribes in states where marijuana use is restricted, Peterson said. States like Florida and New York have low supply and high demand, which could lead to lucrative ventures on tribal land.

But non-Native American players are now taking the field.

Under legislation signed into law by Gov. Andrew M. Cuomo, just five sites in New York state will be selected as licensed medical marijuana growers.

Perhaps surprisingly, the allegedly liberal Cuomo, has not been an overly-enthusiastic proponent of medical marijuana. His law is the tightest in the nation, and he nearly had to be dragged kicking and screaming to the signing ceremony last summer.

His draft regulations point to heavy oversight of the nascent pot-growing operations.

Albert Einstein's definition of insanity is doing the same thing over and over again and expecting different results.

Looking at the Native American gaming fiasco is instructive, in that it is quite clear that allowing one of the private gaming companies to open a casino in Niagara Falls and pay taxes on all revenue generated from gambling, hospitality and retail would have resulted in a far better deal for the city's hard pressed citizenry.

Are we prepared to give away the millions in revenue that will be associated with a Niagara County marijuana growing enterprise in such a similarly cavalier fashion?

Seneca Nation's Robert Odawi Porter speaks at a tribal marijuana conference for tribal governments considering whether to grow and sell marijuana.






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