Sounds strange a permaculture Christmas tree. How about a conifer in a pot which looks good enough to be brought in as a Christmas tree and has the double use as medicine or incense?
Have you got any ideas which conifers would be suitable or are very desirable because they look good and give good medicine?
If you don't mind a small sized tree, rosemary can be trimmed to a conical shape and used for a tree. We were looking for a tree once when we were living on a boat and didn't have room for a full sized tree. The garden section of the hardware store had rosemary bushes. One of them was growing in a Christmas tree shape so we bought that instead. The rosemary did great and even almost smelled like a pine. Well, pine mixed with pizza. Lavender might be an option, too.