Legal weed could forge reconciliation: ex-chief

100 First Nations amenable to tax breaks, he says

• Former Assembly of First Nations chief Phil Fontaine says his pitch to produce medical marijuana on reserves is getting lots of attention from Indigenous communities hoping to get into a potentially lucrative industry.

About 100 First Nations communities and business interests are keen on the enterprise, he told the National Post this week, though some stigma remains around cannabis and its production.

Fontaine’s own company Ishkonigan launched a partnership in December with licensed weed producer Cronos Group, and will break ground on a flagship operation in Armstrong, B.C. later this summer. Ishkonigan has a 51 per cent share of the venture, which is expected to be operational in about eight months.

The first location is not on a reserve, but the partners intend to franchise operations on Indigenous land across Canada, with communities owning big chunks of each franchise, and thus sharing in the profit.

According to the plan for the fledgling business, called Indigenous Roots, each operation would initially have the potential to produce 3,000 kg per year or more, and serve about 8,000 patients. At full capacity it could expect to generate $ 1.5 million in monthly revenue and create 25 jobs at the facility, plus 15 more for education, outreach, marketing and customer service.

In an interview in Ottawa Monday, Fontaine argued the private sector — though full of powerful influencers and bureaucracies, just like government — can be a major conduit for reconciliation.

“Clearly the revitalization of First Nations economies is one expression of reconciliation. And so that means that we ought to be able to participate and engage in every sector,” he said.

“It’s really about moving away from being dependent on government and creating our own capacity, our own source revenue so that we’re in a position to make our own investment decisions that will be beneficial to the interests of our communities and citizens.”

Many of the major industries located on Indigenous land are connected to resource development, with local communities typically not involved as owners or investors. But with medical marijuana, and the recreational market that would ultimately result from the Liberal government’s promised legalization, there’s an opportunity for those communities to get in at the beginning of an emerging market. “There’s absolutely no reason why we can’t be a central player in this sector,” Fontaine said.

Part of the appeal comes from tax breaks afforded to businesses located on First Nations territories. “There are obvious tax benefits if we establish on reserve. So we want to take full advantage of that situation,” he said.

“We are focused on providing quality service for a safe, reliable health product. And we want to, of course, focus on wealth creation, capacity building, jobs, training, and all of the ancillary opportunities that will result once we are up and running.”

Products from the operation would be marketed to Indigenous people, whom Fontaine called an “underserved community” as far as medical marijuana goes. The government has done nothing to discourage this plan, Fontaine said.

He also appears optimistic the operation could reap rewards from the recreational market, which would open up by July of next year if the government passes legislation it introduced in the spring.

“We know that the businesses that are now viewed as well-established are going to have an advantage come July 1, 2018, so we recognize that,” he said.

Though Fontaine said his focus has been on medical cannabis and developing in- house expertise in that area, “you just can’t dismiss the know- how that exists out there now. So, I think it makes sense to look at that, and see if there are any benefits to taking advantage of the expertise, the experience and the know-how that’s been developed outside of the legal framework, meaning legalized cannabis.”

Fontaine left politics about eight years ago but didn’t shy from praising the Trudeau government for its “encouraging words” and increasing funding for First Nations issues.

“When I think of reconciliation, I think of eradication of mass poverty in our communities. Poverty has paralyzed our communities for a long, long time and so we need to move away from that and create the kinds of economies that will generate … not just the interest but the kind of activity that will make our communities strong, healthy, vibrant places,” he said.