The Oregon Liquor Control Commission says samples of Blue Magoo had pesticide levels exceeding state limits.
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Members of the Confederated Tribes of Warm Springs will vote next month whether to allow cannabis cultivation on the reservation.
If the ballot referendum passes, Warm Springs could become the first major tribal pot growing enterprise in the state. Marijuana consumption is not legal on the reservation — that would require a separate vote. But the tribes see business potential in sales off of tribal lands.
"This could be a significant contributor to the tribe's revenue source," said Don Sampson, chief executive officer of Warm Springs Ventures, the business arm of the tribes.
Sampson predicts annual profits from a marijuana growing operation to be about $26 million, once the operation is up and running. That's more revenue than all other Warm Springs industries generate annually, combined.
Sampson said the industry would also create jobs.
"On the reservation, we have up to 60 percent unemployment," he said. "We're looking at up to 85 jobs, initially."
The tribes would sell the marijuana in tribally-owned and operated retail stores, in places like Portland or Bend. Sampson said he's been working closely with the state to discuss regulations and potential taxation scenarios.
"One of the concerns from the state's perspective is making sure we have the same level of taxation, so we're not at an advantage in the market," said Sampson.
The state imposes a 17 percent tax on marijuana sales. The tribes could potentially impose the same tax amount and receive all or some of the generated revenue, according to Sampson.
The referendum vote takes place Dec. 17. At least one third of tribal members must vote for results to be valid.
