Exercising Self-Determination Through Tribal Nation Industrial Hemp Farming

2. Exercising Self-Determination Through Tribal Nation Industrial Hemp Farming Federal Recognition of Tribal Law in Parity with State Law Jeffrey A. Cormell, Esquire McAllister Garfield, P.C. Denver, Los Angeles, Bay Area, Wisconsin and Detroit

3. Before We Start.Marijuana and HempWhat is the Difference?Both are Cannabis Sativa L. TetraHydroCannadinol – the psychoactive component of Cannabis Sativa L. is how the distinction is made. Hemp – Below 0.3% Marijuana – Above 0.3%

4. Let’s Get into the WeedsHistory of Hemp Regulation in the U.S.

5. Colonial Hemp Farming

6. Hemp in the United States • The origins of hemp in the U.S. is a debated subject. • The 1913 Yearbook of the U.S. Department of Agriculture, claims that industrial hemp came over with the British to New England and spread from there. • In 1913 the U.S., China, Russia, Hungary, Italy and France were all major producers of industrial hemp.

7. Legislative Background • Marihuana Tax Act of 1937 – Secretary of Treasury • Prior to 1937 Cultivation of marijuana and hemp was widespread and legal. • The Marijuana Tax Act of 1937 exempted certain parts of the plant, known as non-psychoactive hemp the tax was prohibitive against profitable cultivation. • Controlled Substances Act of 1970 – DEA • Illegalized the cultivation of Cannabis Sativa L, but allowed for the import of the non-psychoactive hemp. • Hemp Industries Associations lawsuits against the DEA • Distortions on the intent of the 2014 Farm Bill. • DEA’s Extract Rule.

8. Legislative History • Hemp was made illegal under the Controlled Substances Act of 1970. • Listed “marihuana” as a Schedule I “Hallucinogenic Substance” • No currently accepted medical use for marijuana use and high potential for abuse. • Cole Memorandum, Wilkins Memorandum & Sessions Memorandum. • Legalization/end of Prohibition of Industrial Hemp in the 2014 Farm Bill.

9. Federal Prohibition:Schedule I Trafficking Penalties Marijuana: Under 50 kilograms, 10 kilograms of hashish, 1 kilogram of hashish oil, or 1 to 49 plants 1st Offense: Felony $250,000/$1 Million Up to 5 years

10. Farm Bill of 2014 • Agriculture Act of 2014 – “Industrial Hemp” as “the plant Cannabis sativa L. and any part of such plant, whether growing or not, with delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” • Agricultural Pilot Projects to “study the growth, cultivation, or marketing of industrial hemp.” 1)Permitted under state law 2) Done under the supervision of institutions of higher learning and/or state departments of agriculture

11. Tribes Under the 2014 Farm Bill • 2014 Farm Bill – States and Federal Holdings Menominee Indian Tribe of Wisconsin v. Drug Enforcement Administration and U.S. Department of Justice, 2016 WL 2997499 “The Tribe argues that the Agricultural Act of 2014 in which the hemp statute was included contains several definitions of “State” that encompass “any other territory or possession of the U.S., language which courts have construed as broad enough to include Indian tribes. Drawing these provisions, the Tribe argues that State, as used in the law, includes Indian tribes. The hemp statute, however, is a stand-alone provision specifically designated as “miscellaneous.” The hemp statute is not part of any broader statutory scheme. Moreover, the hemp statute contains its own definitional subsection. Under these circumstances, it would be arbitrary to look to definitions in unrelated parts of the same title of the U.S.C. and apply such definitions to the statute at issue. For these reasons, the Court denies the Tribe’s request for declaratory relief to the effect that “State” as used in the hemp statute includes Indian tribes, and rejects the Tribe’s theory that it acted as a “State” when it enacted its own law allowing hemp cultivation.

12. The Watershed Year of 2018 • Expiration of 2014 Farm Bill on September 30, 2018. • December 20, 2018 the 2018 Farm Bill was signed into Law. • St. Croix Chippewa Indians of Wisconsin v. Brad Schimel, Wisconsin Attorney General • FDA approval of Epidiolex on June 25, 2018. • A year prescription of Epidiolex is $32,500.

13. 2018 Farm Bill • Provides administrative mechanism for Tribes to assume primary regulatory authority over the production of industrial hemp and hemp products, including cannabidiol (CBD). • Authorizes transport and shipment of tribally produced hemp and hemp products, also opens the door for federal crop insurance and federal loans to produce hemp. • Removed industrial hemp from the CSA as defined as Cannabis sativa L. at dried weight with less than 0.3% THC.

14. 2018 Farm Bill • Section 297B State and Tribal Plans ‘‘(1) In General.—A State or Indian tribe desiring to have primary regulatory authority over the production of hemp in the State or territory of the Indian tribe shall submit to the Secretary, through the State department of agriculture (in consultation with the Governor and chief law enforcement officer of the State) or the Tribal government, as applicable, a plan under which the State or Indian tribe monitors and regulates that production as described in paragraph (2). • Tribal law in parity with state law.

15. 2018 Farm Bill • Tribal Nations need to develop plans which shall include: • Procedures for annual inspection. • Procedures for submitting information to USDA. • Certification that the Tribe has the “resources and personnel” to carry out the plan.

16. Native Leaders in Hemp

17. Hemp Products

18. Hemp Products

19. Hemp Products Industrial hemp is composed of five major classes: Oilseed/grain Fiber: bast or hurd CBD Dual purpose: produces both fiber and seed, but not to the yield or quality of single purpose cultivars Tri-crop: grown as a single crop for seed, fiber and CBD

20. What Now? • Decide on what your Tribal Nation wants to do, fiber, CBD or both. • Create a Tribal ordinance and regulatory body for industrial hemp cultivation, processing, and distribution. • Submit industrial hemp plan to the Secretary of Agriculture at the USDA

21. Exercising Sovereignty • Use of revenue derived from industrial hemp to subsidize other governmental functions. • 2018 Farm Bill authorizes interstate commerce of industrial hemp and hemp products. • Tribal Alliances/Trade Networks. • Empower tribal citizens to create businesses involved in industrial hemp: farming, processing, packaging, transportation, distribution.

22. Global Hemp Industry Outlook 2019 • $3,700,000,000.00 in global hemp industry sales in 2018 • 350% increase from 2017’s total of $820,000,000.00 • Projection of $5,700,000,000.00 by 2020 • Source: New Frontier Data, “The Global State of Hemp: 2019 Industry Outlook”.

23. Regulatory Jungle • FDA regulatory authority over CBD. • I.R.C. 280e. • P.L. 280 and non- P.L. 280. • USDA

24. Doing Business in Indian Country • Consult legal counsel early in the process. • Someone who knows both Indian law and cannabis law. • Use inherent tribal competitive advantages: sovereign immunity, taxation. • Use civil regulatory jurisdiction. • Know and understand state/federal marijuana laws.

25. Questions? Contact: • Jeffrey A. Cormell, Esq. • McAllister Garfield, P.C. • 501 S. Cherry St., Suite 480 • Denver, CO 80246 • Phone:  720-722-0048 • Jeff Mobile: 715-699-2092 • Email: jeffc@mcallistergarfield.com • Offices in Colorado, California, Wisconsin and Michigan