Six Nations Elected Council is holding off on incorporating the Six Nations Cannabis Commission, citing taxation concerns and the need to seek a legal opinion first.
“I’m totally against incorporation simply because…we all know the issues we’ve had with the (economic) development corporation,” said Coun. Helen Miller at a political liaison meeting Monday.
The Six Nations Cannabis Commission sought council approval to become a corporation, saying it would provide them with legal protections, among other benefits.
The commission is also looking to establish a trust to hold community funds gleaned from the cannabis industry on Six Nations.
But Coun. Miller had concerns about the trust, as well, after commission members provided an update to council at Monday’s meeting.
“I see from the presentation they want to set up a trust. We’ve already got two trusts in our community that don’t seem to be working out too great for our community. I have a lot of concerns with this.”
Jeremy Burke, a legal advisor for the SNCC, said it’s important to be incorporated, “so that commissioners and staff will have [the] same types of protections that legal corporations have.”
Without incorporation, individual commission members face legal liability.
“That type of legal liability is not appropriate for anybody,” said Burke.
The commission said council had the option to incorporate it as a for-profit or not-for-profit entity.
The for-profit option means revenues are subject to tax and the not-for-profit is shielded from taxation, said Burke.
“In either case, the shareholder or the member would be SNGR (Six Nations of the Grand River) elected council and there would be articles of incorporation and a by-law for governing the corporation,” he said.
A not-for-profit corporation is exempt from taxes, he explained, because it doesn’t operate for the benefit of its members.
“It has certain rules about what it can and can’t do with revenues generated and the idea is that all of the commission’s revenues, above what it requires for operating, would be put back into the community as a community contribution.”
Burke also recommended council set up a trust arrangement for community contributions from cannabis revenues where the commission, council and community would have say in how community contribution is used.
The SNCC was created almost two years at arm’s length by the elected council to develop regulations for a cannabis industry on Six Nations. Council funds the commission.
The commission also asked for council support in choosing a financial institution to conduct its banking.
Commission Chair Nahnda Garlow said they are currently looking to acquire equipment to test cannabis quality.
“We’ve hit a couple of snags in trying to get the equipment to facilitate our own testing facility,” she said.
The commission contracted suppliers who are hesitant to supply to anyone in Canada unless they have a Health Canada license to be a tester. The commission is not licensed under Health Canada and is looking to create its own regulations outside of federal or provincial cannabis regulations.
“We are looking at a testing lab in Manitoba that is for sale,” said Garlow. “They’re closing up. We may be able to secure the equipment from that facility and bring it to Ontario.”
She said the commission has been approached by two business owners in the community to fund the testing facility as a way to give back.
Garlow said the commission needs council representatives as it moves toward discussions with Health Canada and the province, “to chart a path forward so that we can acquire that testing equipment without having the Health Canada license.”
The commission is looking to launch its retail sector soon but it needs to ensure it has testing equipment in place first.
“We need to secure safe product for dispensaries (on Six Nations) to sell in their shops. We are looking to issue (a proposal) to Health Canada-licensed producers to find out if anyone will be willing to supply dispensaries on Six Nations without the federal government’s approval.”
“I have a lot of concerns with these recommendations,” said Coun. Miller. “I really think council needs to sit down and have a good discussion on them.”
Coun. Audrey Powless-Bomberry agreed and added they should get a legal opinion on incorporation, as well.
“They’re major decisions and we need time to think about it and discuss.”
Coun. Hazel Johnson said historically, the elected council has hesitated to incorporate any organization on Six Nations and that they need to further discuss the possibility of incorporating the SNCC.
Only a handful of councillors were present at Monday’s meeting.
“All previous councils have been very reluctant with regard to incorporation,” said Johnson. “That tax issue is a really big scare for many people. I think we really need to discuss this in-depth before we make any decision on it.”
Burke said elected council still has the right to appoint commissioners and be the sole shareholder of the commission after incorporation.
“The elected council would still have the right to appoint commissioners. The council could replace and elect directors of the corporation. Technically, the commission would still be under the full control of council. Council still has the ability to hold the reins, even if they’re not pulling on them.”
Coun. Miller said the issue needed further discussion.
“Cannabis is going to be a big safety issue in our community. I think council has to be on top of that and be heavily involved in this cannabis. If something happens, if somebody got bad weed from somebody and got sick, it’s council that’s going to be getting sued. Because it’s a safety issue, council has to be involved and that’s another reason I don’t agree with incorporation.”
The commission is expected to hold an online community meeting in February.