Native American Tribal Sovereignty and the Cannabis Industry: A New Frontier

By David M. Ullian

Jun 2, 2025

Native American Tribal sovereignty and the budding cannabis industry have intersected in a unique way, giving rise to an evolving landscape. Exercising their inherent rights to self-governance, many Tribes are exploring and beginning to take advantage of the economic opportunities brought on by participating in the cannabis industry. But suppose the potential benefits of building a cannabis program or operating cannabis businesses are so numerous and substantial. Why do Tribes still face so many challenges in entering the cannabis market?

This blog post provides a high-level overview of Tribal sovereignty and how it has enabled a Tribe like the Eastern Band of Cherokee Indians to operate a highly successful, vertically integrated cannabis company on Tribal lands in North Carolina, a conservative region of the country that continues to enforce cannabis prohibition. The content closes with an overview of the common challenges and opportunities Tribes face in working towards establishing their cannabis programs.

What Is Tribal Sovereignty?

Tribal sovereignty refers to the inherent authority of indigenous Tribes to govern themselves within the geographic borders of the United States. This concept is based on the recognition of Tribes as independent communities that have retained the power to create and enforce their laws and regulate their internal affairs within Tribal territories.

Tribal governments do not derive their powers or sovereignty from the United States, but rather from the U.S. Constitution. Although Tribal sovereignty existed long before the Constitution was officially adopted in 1789, the Indian Commerce Clause in Article I, Section 8, Clause 3 of the Constitution provides a clear foundation for recognizing the sovereignty of tribes, which states that “[T]he Congress shall have Power […] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” (U.S. Const. art. I, § 8, cl. 3.) This important clause acknowledges that tribes are distinct, political entities, positions tribes within the Constitution's framework, and confirms the unique status of tribes with respect to governance.

Another section of the U.S. Constitution, the Treaty Clause in Article II, Section 2, Clause 2, grants the President of the United States the power to “make Treaties” with the advice and consent of the Senate. (U.S. Const. art. II, § 2, cl. 2.) Approximately 374 separate treaties have been entered into between the United States and various Native American Tribes. These treaties further affirm Tribal sovereignty and explicitly or implicitly reserve various rights to Tribes, including rights to land, water, hunting and fishing rights, and public goods and services like education and healthcare.

In addition to these treaties and various federal laws, Supreme Court case law has validated and reinforced constitutional Tribal sovereignty over time. The United States Supreme Court has repeatedly recognized Tribal sovereignty in various forms through its decisions dating back to the early 19th century. In Johnson v. McIntosh, 21 U.S. (8 Wheat.) 543 (1823), the Supreme Court in 1823 acknowledged that Tribes retained sovereign rights to occupy their lands. Several years later, in 1831, the Court recognized in Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1 (1831), that Tribes maintain special status as “nations” under federal protection. And most notably, in the landmark 1832 decision in Worcester v. Georgia, 31 U.S. (6 Pet.) 515 (1832)., the Supreme Court, led by Chief Justice John Marshall, held that the laws of the state of Georgia had no force within Cherokee territory because the U.S. Constitution grants the federal government exclusive authority to regulate commerce with Native American Tribes. This important case affirmed that Native American nations are distinct, independent political communities with their sovereign rights fortified against unlawful interference by state governments by the doctrine of tribal sovereignty.

Together, these sources of law have historically acknowledged the authority of Tribes to maintain their own legal and governmental systems, just as they had before colonial domination disrupted their communities and ended countless lives. Tribal sovereignty is not just a legal principle; it is a living expression of self-determination and cultural survival. But what does this all mean for Tribes considering opportunities in the cannabis business?

Tribal Sovereignty and the Booming Cannabis Industry

The cannabis industry in the United States—which includes both regulated marijuana and hemp-derived intoxicating products—has seen exponential growth over the past several years. This boom has largely been driven by increasing legalization, regulation, and societal acceptance of medical and adult-use marijuana at the state level, as well as Congress’ enactment of the Farm Bill in 2018, which removed hemp from the definition of “marijuana” in the federal Controlled Substances Act (the “CSA”). As a result of expanding regulated access to marijuana and hemp-derived THC, the U.S. cannabis market had an estimated market value of approximately $38.5 billion in 2024 and is projected to reach a market value of $76.4 billion by 2030.

As cannabis legalization expands across the United States, Tribal Nations are asserting their sovereign rights to regulate cannabis within their jurisdictions. Yet, the interplay between federal prohibition, evolving state laws, and Tribal sovereignty presents a complex and potentially ambiguous environment. Although cannabis remains a federally illegal substance under Schedule I of the CSA, for many Native American Tribes, cannabis commercialization presents a significant and unique economic opportunity. This is largely due to the fact that Tribal sovereignty allows Tribes to develop and implement their laws, regulations, and programs for the legal cultivation, processing, and sale of cannabis on their lands. For many Tribes, this autonomy can lead to substantial economic development, job creation, and increased revenue for their communities. With that said, however, policy in this space is hardly cut-and-dried.

Foundational to the legal framework establishing the federal approach to Tribal cannabis is the 2014 Wilkinson Memorandum, issued by then–DOJ Director Monty Wilkinson. Building on the 2013 Cole Memorandum, which deprioritized federal enforcement of cannabis-related offenses in states with strong regulatory systems, the Wilkinson Memo extended this guidance explicitly to Tribal Nations. It recognized that "effective federal law enforcement in Indian Country, including marijuana enforcement, requires consultation with our Tribal partners" and affirmed that Tribal governments could, like states, establish their cannabis regulatory systems—so long as they aligned with key federal enforcement priorities. Although both the Cole and Wilkinson Memos were rescinded in 2018 by then–Attorney General Jeff Sessions, federal enforcement has not returned to pre-2013 levels. As a result, U.S. Attorneys have largely continued to exercise discretion in de-prioritizing enforcement against state- and Tribal-compliant cannabis activity.

In light of the continued policy of de-prioritized federal enforcement, some Tribes have begun negotiating compacts with states like Minnesota. Agreements such as the Cannabis Compact Between the White Earth Band of Minnesota, the Chippewa Tribe, and the State of Minnesota aim to align Tribal regulatory systems with external enforcement priorities and affirm the right of Tribes to control cannabis activity on their lands.

Cannabis Operations by The Eastern Band of Cherokee Indians (EBCI) in North Carolina

North Carolina is one of only a few states in the country that has not legalized and implemented a medical or adult-use cannabis program. Cannabis prohibition remains the standard in the state’s laws despite a series of legislative efforts over the past several years to allow for regulated access. Nonetheless, medical patients and adults 21 years of age and older are able to purchase a wide variety of regulated medical and adult-use cannabis products at the Great Smoky Cannabis Company’s dispensary located at 91 Bingo Loop Road in Cherokee, North Carolina.

The members of the Eastern Band of Cherokee Indians (EBCI), a sovereign nation and federally recognized Indian Tribe, voted in July 2021 to legalize and regulate the commercial production and sale of medical cannabis within its 56,000-acre territory known as the Qualla Boundary in western North Carolina. Through its commercial entity Qualla Enterprises LLC, which is the parent company of the Great Smoke Cannabis Company and wholly owned and operated by the EBCI, the Tribe began developing a regulatory framework and infrastructure for regulated medical cannabis cultivation, manufacturing, and dispensing operations. On September 7, 2023, EBCI Tribal members overwhelmingly approved a voter referendum to legalize the possession and use of adult-use cannabis, as well as to require the EBCI to develop a regulated adult-use cannabis program in addition to the previously approved medical cannabis program.

On April 20, 2024, the Great Smoky Cannabis Company began selling cannabis and cannabis products to registered medical patients at its 10,000 square foot retail space inside a renovated bingo hall in EBCI territory. Several months later, on September 7, 2024, all adults 21 years of age and older, including non-EBCI members, became eligible to purchase cannabis and cannabis products at the dispensary, which continues to be the only place in the state of North Carolina to legally purchase cannabis, whether for medical or adult-use.

Although it is lawful to purchase and consume cannabis on the Qualla Boundary, cannabis possession and use continue to be illegal under both federal law and state law. An individual who possesses or consumes cannabis is subject to potential criminal prosecution once the individual is no longer in Tribal territory. As noted on the company’s website in bold red font, “[U]pon leaving the Qualla boundary, individuals are subject to state laws, including those regarding cannabis.”

Challenges and Opportunities Emerge for Tribal Cannabis

The EBCI’s cannabis operations have been very successful. This is partially because there is no place to buy regulated marijuana legally in the state of North Carolina, and there is no dispensary in any bordering state where regulated adult-use cannabis can be purchased. Because legal sales are so restricted in the Southeast and without competition in the market, the potential revenue for the EBCI is quite high, perhaps even higher than it could be for Tribes located in regions where non-Tribal legal dispensaries also sell marijuana.

While the potential benefits are numerous and substantial, Tribes face several challenges in entering the cannabis market. Here are a few:

Legal Complexities: Navigating the interplay between federal, state, and tribal laws can be complex. Although Tribes have the authority to regulate cannabis on their lands, they must still contend with federal laws that classify cannabis as a Schedule I substance under the CSA and negotiate compact agreements with state governmental bodies if they wish to engage in commercial cannabis activities outside of the bounds of Tribal territory.
Market Competition: Tribes must compete with established, regulated marijuana businesses in various jurisdictions and the flourishing and largely unregulated market for hemp-derived intoxicating products. Tribes must strategically navigate market dynamics to ensure long-term success and profitability.
Regulatory Compliance: Ensuring compliance with both Tribal and external regulations requires robust governance structures and resources. For example, the EBCI established its own Cannabis Control Board as a governmental body to regulate cannabis operations on Tribal territory and ensure that the Great Smoke Cannabis Company complies with detailed rules the Tribe created for the production and sale of cannabis.

Despite these challenges, dozens of tribes across the country are successfully leveraging their sovereignty and entering into compact agreements with state governments to participate in the U.S. cannabis industry both on and off of Tribal lands. The Indigenous Cannabis Industry Association (ICIA), in collaboration with leading cannabis law firm Vicente LLP, created a first-of-its-kind Tribal Cannabis and Hemp Map that shows the substantial growth of the evolving indigenous cannabis market in the United States, which you can see below.

Vicente LLP is working with several Tribal leaders on developing beneficial cannabis policies for their sovereign nations.

Conclusion

The emerging intersection of Native American Tribal sovereignty and the cannabis industry is a testament to the resilience and adaptability of Tribal nations. By exercising their inherent rights, Tribes are not only fostering economic development but also asserting their sovereignty in new and innovative ways. As the cannabis industry continues to evolve, the role of Tribal nations will undoubtedly become increasingly significant, offering valuable lessons in governance, entrepreneurship, and cultural preservation.

Those interested in supporting Native American Tribes in the cannabis industry should consider:

Advocating for laws, regulations, and policies that respect tribal sovereignty
Promoting equitable market access
Contributing to the economic empowerment of indigenous communities
Joining and supporting the Indigenous Cannabis Industry Association.

You can also contact Vicente LLP directly for legal advice on structuring and implementing a Tribal cannabis program.