Marijuana Moment: California Indian Tribes Can’t Participate In Statewide Marijuana Industry Without Getting Their Own Licenses, Attorney General Says

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California’s attorney general says Indian tribes cannot independently engage in marijuana commerce with licensed cannabis businesses without first obtaining their own commercial license from state officials.

Assemblymember Anamarie Avila Farias (D) had requested the opinion from Attorney General Rob Bonta’s (D) office as a bill moves through the Assembly to authorize state-licensed marijuana businesses to buy and sell products from operators licensed by tribal governments within California’s borders.

That legislation, from Assemblymember Gregg Hart (D), was amended to make it so the governor would be allowed to enter into agreements with federally recognized Indian tribes to engage in intrastate cannabis commerce with state licensees, pending “federal approval or toleration.”

It would build upon an existing law that empowers the governor to authorize interstate cannabis commerce, with exports and imports between businesses licensed in California and those licensed in other states, if they meet certain regulatory standards and the activity is sanctioned by the federal government.

Bonta’s office has previously determined that no such federal permission exists to allow for such agreements, but advocates have recently raised questions about whether that could change given the Trump administration’s move to reschedule medical marijuana in legal states.

In any case, the Hart bill to expand the law with the tribal provisions passed the Assembly in a 77-0 vote last week, sending it to the Senate. And in the interim, the state attorney general’s office on Thursday responded to Avila Farias’s related legal question.

“May a federally recognized Indian tribe located exclusively within the exterior boundaries of the State of California conduct intrastate commercial cannabis activity with state licensees off tribal lands without obtaining a commercial cannabis license from the California Department of Cannabis Control, if the tribe has adopted laws substantially comparable to California’s cannabis regulatory framework?” the assemblywoman asked the office.

In short, Bonta’s office said, the answer is “No.”

“With limited exceptions, California law requires every entity that engages in intrastate commercial cannabis activity with California licensees to hold a license issued by the Department of Cannabis Control,” it said. “To engage in such activity off tribal lands, a tribe must hold a California commercial cannabis license.”

“As discussed, cannabis is a controlled substance, and cannabis activity remains illegal outside of the [state regulatory] framework,” the attorney general’s office said. “That framework generally requires all commercial cannabis activity to occur only between California licensees. And a licensee who operates contrary to the law may face civil or criminal penalties. In short, state law does not allow a California cannabis licensee to lawfully conduct commercial cannabis activity with an entity who holds a commercial cannabis license issued by a tribal authority instead of the state.”

The opinion also notes that current state law “expressly contemplates tribal participation in the commercial cannabis market as California licensees,” permitting tribes to engage in cannabis commerce with state licensees if they themselves are licensed by DCC. That policy “reinforces our conclusion that tribes without a state license may not engage in commercial cannabis activities.”

“For these reasons, we conclude that tribes must obtain a license from the Department of Cannabis Control to engage in commercial cannabis activity with California cannabis licensees off tribal lands,” the opinion concludes.

As previously noted, Bonta’s office in 2023 determined that California could put itself and its employees at “significant legal risk” of federal enforcement action if it were to authorize interstate marijuana commerce.

The opinion came in response to a request that year from DCC, which sought the attorney general’s assessment of potential liability for permitting interstate commerce under the law Gov. Gavin Newsom (D) signed in 2022.

While DCC argued in its request that the state would not find itself at substantial legal risk for allowing the activity, the attorney general’s opinion said it could not rule out that possibility given the threat of federal preemption under the Controlled Substances Act (CSA).

Asked whether the department planned to request a follow-up review from the state attorney general’s office of the legality of the commerce agreements since President Donald Trump’s Justice Department moved forward with federal rescheduling, a DCC spokesperson told Marijuana Moment that it hasn’t taken such action yet.

“Before taking any action related to interstate commerce, we are awaiting definitive guidance from the federal government,” the spokesperson said on Friday.

DCC has, however, taken steps to help the state’s marijuana businesses take advantage of federal tax and other benefits under Trump administration’s rescheduling move.

Specifically, DCC recently proposed emergency regulations to let businesses with current licenses covering both medical and recreational marijuana secure a secondary license through a streamlined process to separate out the segments of their operations in light of the fact that the federal scheduling change currently only covers medical cannabis.

In a prior rescheduling-related cannabis update, DCC announced that cultivation licensees “no longer need to wait until renewal to request a change to their adult-use (A) or medicinal-use (M) designation.”

Additionally, DCC no longer requires a new local authorization for requests that change a license to medical designation only or add a medical designation to an existing adult-use designation.

Separately, state lawmakers this session are advancing legislation to allow marijuana retailers to offer drive-thru windows to serve customers.

Newsom, meanwhile, recently took credit for helping to lead the push for the state to legalize marijuana and discussed his own limited experience with using cannabis.

In October, however, the governor vetoed a bill that would have allowed certain marijuana microbusinesses to ship medical cannabis products directly to patients via common carriers like FedEx and UPS, stating that the proposal “would be burdensome and overly complex to administer.”

Newsom did sign a bill earlier that month aimed at streamlining research on marijuana and psychedelics.

In September, the governor also signed a measure into law to put a pause on a recently enacted tax hike on marijuana products.

California officials recently awarded nearly $30 million in grants for marijuana-focused academic research projects.

Meanwhile, California isn’t the only state that’s contemplated the possibility of interstate marijuana commerce in recent years.

Oregon and Washington State have also passed laws allowing officials to enter into cross-border cannabis trade agreements with other states, although those state laws both require some form of federal reform or guidance to proceed.

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