Robbie Dickson of Rainbow Tobacco G.P. was convicted in provincial court of two other charges under the Tobacco Tax Act for possessing tobacco not marked for tax sale and for having more than 1,000 cigarettes.
Whether he will be sentenced on those two charges will depend on the results of a constitutional challenge that Dickson has filed and which is to begin in February, Alberta Crown prosecutor Leah Boyd said.
Defence lawyer Josephine de Whytell said part of the constitutional challenge will focus on Dickson's aboriginal rights.
"We are contending that the Mohawks travelled across Canada and traded their tobacco with First Nations across Canada. It was customary for those First Nations to have possession of tobacco on or around the different First Nations," she said.
"Robbie Dickson possessing tobacco on the Montana First Nation is the continuation of his aboriginal right to go about his traditional avocations."
Dickson was charged in 2011 after the Alberta Gaming and Liquor Commission and the RCMP seized almost 16 million cigarettes from a warehouse on the reserve south of Edmonton.
The Alberta government said at the time that it would lose $3 million in tax revenue if the "contraband" cigarettes were sold.
Court documents say the cigarettes in about 75,000 cartons were produced by Rainbow Tobacco on the Kahnawake reserve in Quebec and shipped to the Montana First Nation in Alberta.
The plan was to use the Alberta location as a hub to distribute and sell the federally licensed cigarettes to aboriginals on reserves across Western Canada.
Dickson and Carolyn Buffalo, who was chief of the Montana First Nation in 2011, said the plan would have created jobs in aboriginal communities with high unemployment.
Charges against Buffalo were stayed.
Dickson was not available for comment about the May 11 ruling by provincial court Judge William Andreassen.
In an interview after the charges were laid, Dickson said the province has no jurisdiction to govern economic development on First Nations territory.
A lawsuit filed in 2011 by Rainbow Tobacco and the Montana First Nation against the commission sought damages and the return of the seized cigarettes, but the claim was dismissed.
Rainbow Tobacco's website says the company is a general partnership located on Kahnawake Mohawk territory just outside of Montreal.
The company says it has been federally licensed to manufacture and sell finished tobacco products on reserves across the country by the Canada Revenue Agency since 2004.
Rainbow Tobacco says in 2010 it entered into discussions with several First Nations communities in Western Canada to sell and distribute Rainbow products in their territories.