Minnesota Gov. Tim Walz on Monday signed a cannabis compact with the Prairie Island Indian Community, outlining how the state and tribal nation north of Red Wing will regulate cannabis together, according to the Office of Cannabis Management.
OCM says the agreement will open the door for partnership opportunities between Prairie Island and state-licensed business owners.
“This compact provides state-licensed cannabis businesses the opportunity to partner with Prairie Island Community and boost supply of product while maintaining the Tribe’s inherent sovereignty and right to self-govern,” said OCM Executive Director Eric Taubel.
Prairie Island said it plans to begin wholesaling activities with state-licensed cannabis businesses next month.
In 2023, the Minnesota Legislature passed legislation legalizing the possession, use and cultivation of cannabis in the state. The law also directed the governor to negotiate intergovernmental agreements with sovereign tribal nations sharing territory with the state.
The compacts help regulate the cannabis market and promote health and safety, OCM said.
The Prairie Island Indian Community is located on an island in the Mississippi River north of Red Wing, near Red Wing and Welch, with off-reservation trust lands also located in Goodhue and Dakota counties.
This is the third cannabis compact signed between the state and a tribal nation. The others involved the Mille Lacs Band of Ojibwe and White Earth Nation.
A tribal nation may open up to eight off-reservation cannabis retail locations. They are limited to one retail location per city and three per county.
Prairie Island Indian Community Tribal Council President Grant Johnson said the tribe was excited to continue meeting demand in “Minnesota’s growing recreational cannabis market with the exceptional cannabis we are producing.”
“We’re very proud of the disciplined systems and processes we have created to ensure the safe, secure operation of our cannabis business on and off reservation land,” he said.
Officials say each state-tribal compact has specifics unique to each tribal nation. But all three contain similar commitments that prioritize public health and safety through product testing, data gathering and analysis, and product consistency for customers throughout the state’s cannabis market.
Sales of cannabis products off tribal lands are subject to all state and local taxes. The cannabis tax is 15% of gross receipts from retail sales of taxable cannabis products. In addition, taxable cannabis projects are subject to both the 6.875% state general rate sales tax, and any applicable local sales taxes based on where the transaction takes place.
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