Kahnawà:ke, Health Canada agreement on cannabis rules could spark further First Nations investment

An agreement between one Quebec-based First Nations territory and Health Canada looks to establish new cannabis regulations that could usher in fresh investment and opportunity for Canada's Indigenous communities. 

The Mohawk Council of Kahnawà:ke announced on Monday that it signed a memorandum of understanding with Health Canada that will create a licensing regime alongside the territory's cannabis laws which will allow businesses to pursue cannabis cultivation and processing licences. 

While First Nations have been involved in the cannabis industry for some time, their participation ranges broadly from legal operators to grey-market retailers. The federal Cannabis Act provides the legal framework provinces and territories are responsible for determining how cannabis is distributed and sold within their jurisdictions. However, that law does not provide sufficient guidance for how First Nations can sell, grow and process the drug as they are governed under federal purview which supersedes provincial legislation. 

While some First Nations-owned cannabis businesses have found success in the Canadian market - Redecan Pharm and AtlantiCann Medical Inc. are two notable examples - much of the industry operates in a flourishing grey market. Ontario's Tyendinaga Mohawk Territory, for example, is home to more than three dozen cannabis dispensaries selling unregulated products with little enforcement taken to rein that market in. 

Tonya Perron, Ietsénhaienhs or elected chief of the Kahnawà:ke First Nation, told BNN Bloomberg in an interview that the agreement with Health Canada will soon allow the territory to start luring new producers and retailers to the area through a unique dual-licensing program. 

"It was obvious that there needed to be a relationship with Health Canada to provide for the exchange of information between them and our Cannabis Control Board," Perron said. "Because the licencing applications would be happening almost in tandem, it didn't make sense to have any development in isolation without one not knowing what the other [agency] was doing."

A Health Canada spokesperson said that the MOU could serve as a template to establish other licensing protocols for First Nations interested in developing their own cannabis industry. 

"Health Canada respects that the Mohawk Council of Kahnawà:ke is putting processes in place and taking a collaborative approach to make sure that cannabis activities in the community are tightly controlled and regulated," the spokesperson said in an email. "This MOU helps to ensure the careful consideration of community processes during Health Canada’s cannabis licensing and oversight activities."

The Kahnawà:ke First Nation first drafted its cannabis regulations in Dec. 2018 and almost partnered with Canopy Growth Corp. to build a large production facility, plus a processing and packaging space in the territory, but plans later fell through. The territory, located south of Montreal along the St. Lawrence Seaway, also doesn't have any cannabis dispensaries, and all cannabis products that would be sold in Kahnawà:ke will come from licensed, not grey market, suppliers. 

"My hope is that for those First Nations communities that want to develop something along those lines that we've paved the way for, these laws don't give up their jurisdiction, it doesn't talk about jurisdiction. It really talks about a coexistence and being on equal footing," Perron said.