- By Elyse Wild
- Economic Development
The Eastern Band of Cherokee Indians (EBCI) Tribal Council last week reversed an April decision to dedicate $64 million to develop the tribe’s medicinal cannabis enterprise, following a veto from Principal Chief Richard Sneed.
The tribe’s cannabis business, Qualla Enterprise LLC, had secured the funds on April 6 in a unanimous vote by Tribal Council, seemingly putting an end to concerns over funding to build out the infrastructure for the tribal LLC’s proposed seed-to-sale operation.
Last week, though, Sneed issued the veto on May 3, citing concerns over a National Indian Gaming Commission (NIGC) memo forbidding the use of gaming revenues to finance tribal cannabis operations. In a veto letter, Sneed also raised concerns about a lack of accounting for $31 million already expended by the cannabis enterprise.
Using revenues from the tribe’s two casino operations to fund the cannabis operations has been a point of debate for the EBCI Tribal Council for months, as reported by the Smoky Mountain News.
“While it remains to be seen what action the NIGC might take in response to a tribe using net gaming revenue for such an enterprise, I for one, am not willing to risk hefty fines or the possibility of our casinos being shut down for violating NIGC regulations,” Sneed wrote in the letter.
The ECBI legalized medical marijuana and decriminalized possession of small amounts in 2021, and that same year, it formed the Qualla Enterprise LLC. The $64 million was first requested in December 2022 by Qualla Enterprise General Manager Forrest Parker to fund the operation’s start-up costs.
Since the tribe could not identify non-gaming funds in the total requested amount, the council approved a $10 million allocation and authorized Qualla to seek a loan to satisfy the remainder. That road, however, proved to be a dead-end, as qualification for the loan hinged on the enterprise having matching funds in the bank.
Despite his veto action, Sneed has a record of supporting the tribe’s cannabis efforts and was a supporter of the 2021 legislation to decriminalize medical marijuana as well as the initial funding to Qualla.
Sneed noted in his veto letter the projected cost for the operation — including an indoor grow facility, outdoor grow facility and dispensary — inflated from $50 million to $95 million, indicating the need for further accountability of the business operations.
“While I fully support cannabis, both medical and adult use, and I am encouraged and inspired by the work I see happening at Cooper’s Creek by our employees, I am very troubled by the lack of accountability for the managing of the business side of the operation,” Sneed wrote. “The current projected cost is almost 100% over budget as compared to the original RFP projected cost.”
The original RFP, Sneed noted, included the construction of NextGen Glass greenhouses; instead, “hoop houses covered in plastic” have been built on the project site at Coopers Creek, projected to cost $66,000 each.
Sneed’s arguments last week swayed tribal council members, who had voted unanimously in favor of the $64 million just a month ago. Eight of the 11 council members voted to uphold the veto and block the funding.