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Minnesota's Tribal Cannabis Compacts: Bridging Two Markets

Updated: Jul 16


June 11, 2025


Minnesota’s eager cannabis consumers and anxious cannabis license applicants were surprised by the announcement by the Minnesota Office of Cannabis Management (OCM) on May 20 that Minnesota had entered into the first tribal compact for cannabis regulation, with the White Earth Band of the Minnesota Chippewa Tribe, and then by White Earth opening its first off-reservation dispensary in Moorhead, Minnesota over Memorial Day weekend only days later.

Questions and misinformation have multiplied, so, with the help of some experts, let’s set the story straight.


Q: What is a tribal compact? Do these exist in other states?

A tribal compact is an agreement between a state government and a tribal government. As a sovereign nation, a tribe has broad powers to regulate within its borders (i.e., on tribal land), and so each tribe interested in the cannabis industry establishes its own cannabis regulatory body rather than being subject to the OCM’s authority. Minnesota’s unique legalization bill (2023) contemplated a significant role for the tribes in Minnesota’s cannabis industry and started the multi-year compacting process.


“The point of the compact is to allow these two markets to interact as far as product standards and testing,” explained tribal cannabis law expert Keith Justin Anderson, who has consulted with numerous Indian tribes across the nation, including tribes in Minnesota. In other words, the compact allows tribal cannabis businesses and the OCM-licensed cannabis businesses to sell products to one another and otherwise interact commercially. The announced compact also allows White Earth a negotiated number of licenses to operate cannabis businesses off of tribal land, and sets standards for what can be sold to consumers.


To date, only a handful of states have entered into cannabis compacts with Indian tribes. But, in Anderson’s opinion, “the Minnesota compacts are shaping up to be much better for both tribes and the state.”


Q: Is tribal cannabis safe? How’s the selection? And the prices?


Under the compacts, all cannabis products sold off-reservation must undergo the same stringent testing that state-licensed businesses will have to comply with. They also must conform to the same strict labeling and packaging requirements, seed-to-sale tracking, and age restrictions at sale. In other words, product safety is paramount.


The compacts also allow the tribes to sell cannabis grown on a reservation to OCM-licensed retailers after it passes testing, which will help with market supply as OCM-licensed growers get up and running. White Earth has been growing and selling on tribal land in Mahnomen, MN since 2023.


Ultimately the selection of products at an off-reservation tribal dispensary will be the same as an OCM-regulated dispensary: different kinds of dried cannabis flower (sold by the gram), as well as pre-rolls, concentrates, edibles, tinctures, and creams. As a market gets started, it is common for a dispensary to start with a limited selection of types of flower and then expand into these latter products. In addition, in those early days, prices are high because supply is so limited. As the only (legal) supplier in town, White Earth’s Moorhead dispensary can command high prices – for now.


Finally, let’s talk taxes. Sales of cannabis products at White Earth’s Moorhead dispensary and all other places except on tribal lands are subject to all state and local taxes, including the statewide Minnesota cannabis tax. That tax was 10% of gross receipts from retail sales of taxable cannabis products, but has been hiked to 15% in the special session of the Legislature under a proposal put forward by the Minnesota Legislature and Governor Walz on May 15, 2025, would be raised to 15%. Industry advocates like Leili Fatehi of Blunt Strategies have warned that this tax hike would make it even harder for small businesses to survive, punishes operators who follow the rules, undermines the equity goals of legalization, and hurt consumers. The Legislature is expected to act on this proposal in the special session that starts this week.


Q: Doesn’t this give the tribes an advantage over the OCM-licensed businesses?


Minnesota’s bill intentionally created a fractured market with many players. The tribes will have certain advantages, true: the ability to vertically integrate their operations (which is not allowed for the larger OCM-licensed businesses); the ability to grow under larger canopy limits and choose a lower tax rate for sales *on* tribal lands; and a head start in growing and selling, which was created by the length of time OCM has taken to form as a functioning agency and work through the process of distributing licenses.


However, other players have unique advantages as well. Minnesota’s two existing medical cannabis companies, Green Goods (Vireo Health) and Rise, both multi-state-operators (MSOs), have established supply, expertise, and retail locations. They and four other “medical combination license” businesses are moving through the process of OCM licensing, and I expect to see them begin to open within months.

The rest are not far behind.


OCM held the long-awaited lottery on June 5 for the four license types that are capped by statute: cultivation, manufacturing, retail, and the mezzobusiness license. The lucky 249 winners now are moving forward as quickly as possible to raise capital, secure real estate, and open their doors, joining close to 1,200 microbusinesses who have already received preliminary approval and 550 more waiting for OCM review.


The microbusiness is a unique-to-Minnesota license that allows a business to operate a single retail store, and grow and manufacture a limited amount. Modeled on the craft industry, micros will generally be small businesses with unique flair. Unlike craft breweries, however, micros can also buy and sell from other licensees and – under the compacts - the tribes, opening up the supply chain.

Dale Sky Jones has worked for a legal and equitable cannabis industry longer than almost anyone in the U.S. She was national spokeswoman for California’s Proposition 19 in 2010, and took over as president and chancellor of Oaksterdam University after a federal raid in 2012. We talked about the reactions of some prospective licensees to the compacts and the advantages they give the tribes.


“Out of pure fear, people start working to undermine the other’s position, because they think it’s a zero-sum game,” Jones told me. “I have witnessed this go wrong, in ugly ways, state by state, over and over again. There’s no fight here. The fight is against the Feds, to not regulate cannabis like plutonium.”



Q: When will dispensaries finally open in Minnesota?


Now! In addition to the existing tribal dispensaries on tribal land and White Earth’s new Moorhead location, White Earth has announced plans to open in St. Cloud soon (they may open a maximum of eight retail locations off-reservation, under the compacts).


In addition, I expect a swell of micros and other new businesses opening across Minnesota this summer and fall. The long wait is over.


Keith Anderson, Dale Sky Jones, and I offered a free webinar, “MN Cannabis: “Fact, Fiction, and the Future,” on Tuesday, June 3, along with Teamsters Local 120. A replay link will be made available here once it is available.



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North Star Cannabis Consulting is not affiliated with North Star Law Group PLLC, and is not a law firm. No attorney-client relationship is formed by receiving consulting services, and no privilege applies. 

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