Tribes looking to get in on the marijuana business – or which are already running dispensary businesses – have less to fear today about being targeted for prosecution by the federal government today than they did six months ago, according to a Nevada accountant who works with the casino industry.
The discussion kicked off a day-long educational session on compliance with federal regulations and banking laws as part of the first day of the National Indian Gaming Association conference and trade show in San Diego.
Joshua Peukert, a senior manager with BlueBird CPAs in Reno, said the Trump Administration – under new U.S. Attorney General William Barr, who was confirmed in February – is more closely mirroring the Obama Administration’s attitude toward marijuana following Jeff Sessions’ removal as Attorney General in November.
“I don’t think they have to be as concerned about being prosecuted because the individual (Sessions) who said federal law is the supreme law of the land is not the one making those decisions anymore.”
During Sessions’ tenure, the still-nascent marijuana industry was on a rollercoaster ride regarding what the federal government’s response to its product would be. In January 2018, Sessions rescinded federal policy that allowed states to legalize cannabis and pushed federal prosecutors to crack down on marijuana in states where it is already legal.
That move represented a 180-degree turn from the Obama Administration’s position on cannabis and rattled the national cannabis industry in areas across the country where recreational and medical pot is legal. Medical marijuana is legal in 33 states and recreational marijuana is legal in 10 others.
The Puyallup Tribe of Puyallup, Washington is one of a handful of tribes that has opened a pot shop. Others have been considering entering the field as well.
“Barr doesn’t think it should be legal, but he wants to have a consensus so it is either legal or not legal, because so many states are legalizing it,” Peukert said. “It sounds like he wants to be more bipartisan in his decision-making process.”
Peukert outlined the memo from former U.S. Attorney General James Cole of the Obama Administration, which effectively said that the Justice Department wouldn’t enforce federal laws in states where marijuana had been legalized. Sessions rescinded that memo; the Trump Administration has now essentially reinstated it.
“If anyone was talking to me about marijuana and Title 31 regulations three years ago, make sure of the people you were doing business with,” Peukert said. “Then it didn’t matter what the Cole memo said. Now we are back to complying with the Cole memo.”
Tribes that operate dispensaries and have casinos don’t mix the two operations, Peukert said. He recommended that tribes make sure that any companies they are doing casino business with are not breaking the law when it comes to marijuana.
“I have tribes that say we don’t do business with any of these people,” Peukert said. “We have a tribe that opened a dispensary and the casino’s compliance officer drew the line at letting Brinks pick up both deposits at once… (the casino) doesn’t cash checks for the dispensary employees or do any business with it.”
George Metkovich, a partner with BlueBird CPAs, said banks are being cautious with casinos operated by tribes who run marijuana dispensaries. They are conducting audits to make sure any cash from the dispensaries isn’t deposited into their institutions
“My opinion is that, if we can keep those entities 100 percent separate, that’s what we need to do,” Peukert said. “It’s not because I want to make it difficult on the dispensary side and the casino side. Casinos are cash cows for tribes; dispensaries are cash cows for tribes. There seems to be this back-and-forth on what are we supposed to do – is it OK to sell marijuana, is it not OK to sell marijuana? I still like to keep them as separate as possible, but that’s up to the tribe.”
