Sovereign nations in Minnesota are poised to become early leaders in Minnesota’s emerging marijuana market.
After Minnesota passed its recreational cannabis bill last year, Red Lake Nation and White Earth Nation were among the earliest to adopt their own marijuana legislation bills. Unlike prospective state business owners who need to wait for the Minnesota’s Office of Cannabis Management to start granting licenses, these tribes were able to open dispensaries on reservation land. Last month, Mille Lacs Band of Ojibwe followed suit and passed its own bill, but the tribe’s business arm, Mille Lacs Corporate Ventures (MLCV), has its eye on a different part of the market: cultivation.
Last fall, MLCV broke ground on the construction of a planned 50,000-square-foot cannabis cultivation facility behind Grand Casino Mille Lacs in Onamia. Last week it announced in a news release that this facility will open in the fall of this year.
This venture addresses an early need for the state as it looks to launch its cannabis market: supply.
Whether the state will have enough supply when the state launches its licensure program remains an open question. Earlier this year, Minnesota’s Office of Cannabis Management sent recommended bill updates to the legislature, much of which looked to mitigate bottlenecks in the supply chain.
As it’s currently written, the state’s cannabis law aims to create a Minnesota-grown craft industry that discourages multi-state operators from cornering the market. Many states have addressed this by capping licenses, but Minnesota so far has looked to a different approach. Instead, the state’s law discourages vertical integration and places a cap on canopy size for licensees. Micro businesses are capped at 5,000 square feet, mezzo businesses at 15,000 square feet, and bulk cultivators are capped at 30,000 square feet.
While the Mille Lacs Band bill largely follows the state’s bill, it does not limit canopy size. Within its first facility, MLCV will grow 40,000 square feet of cannabis and predicts it will produce about 1,600 pounds of flower per month, Mille Lacs Band’s commissioner of corporate affairs and MLCV’s CEO Joe Nayquonabe told TCB.
“That’s where the real benefit to tribes is to really invest in scale, so that’s where we’re starting,” Nayquonabe said. “We eventually do think we will play in the retail side and potentially will play in the consumer product side, but in our initial entry we plan to be really aggressive on just meeting the demand that we think the state’s going to have for just flower.”
MLCV’s first facility will create 30 to 40 skilled jobs, bolstering Onamia’s rural economy, he noted, adding that this first facility is just the start.
Being an early leader in the state’s cannabis industry is no small task, Zach Atherton-Ely, MLCV’s VP of strategic growth, told TCB. MLCV owns businesses like the Grand Casino Mille Lacs and Grand Casino Hinckley, along with the InterContinental St. Paul Riverfront Hotel and the DoubleTree hotel in St. Louis Park. MLCV also owns a movie theater, a grocery store, convenience stores, and a wastewater treatment plant.
“We know that we haven’t been an agricultural company in the past and so we’ve had to go out and interview and vet strategic partners who have the expertise and we feel that’s an important part of the process,” Atherton-Ely said of the construction of the cultivation facility.
In addition to working within the tribe, MLCV plans to work and partner with other tribes and other cannabis businesses across Minnesota as the market launches. MLCV is looking to stay nimble as the market shifts and is keeping an eye on lessons learned in other states.
“I do think that some caution is warranted to avoid a situation like Michigan or Colorado where so much supply flooded the market that you ended up having places go bankrupt,” Atherton-Ely said.
The hope is entering Minnesota’s emerging industry will continue to boost economic development for the tribe, he said, both through adding jobs and through MLCV profits, all of which go back into the tribe to promote government programs and services for its members.
“It’s exciting for tribes to be able to participate at the very beginning of an industry. Historically that hasn’t really happened,” he said.
Wendy Merrill, one of five elected officials for the Mille Lacs Band of Ojibwe, sponsored the Mille Lacs cannabis bill.
“It stems from a profound belief in its potential to drive economic development,” she told TCB.
Band Assembly worked on the bill for over a year, starting before the Minnesota Legislature passed its marijuana legalization law in its 2023 session. Merrill said it has been one of the tribe’s largest bills in the last year and highlighted how deeply collaborative the process was. It came after extensive community engagement and through partnerships with various branches of government. Other bill proponents were the tribe’s secretary and treasurer Sheldon Boyd, chief executive Melanie Benjamin, District I Representative Virgil Wind, District III Representative Harry Davis, and revisor of statute Hanna Velento.
The Band’s Office of Cannabis Management has five board members but will also have staff executing day-to-day regulatory operations. This department will be responsible for granting cannabis licenses for cultivation, manufacturing, wholesale, retail, and testing activities within the Mille Lacs Band’s sovereign territory.
The bill also includes a surcharge tax from gross sales. Taxes levied through this will support drug use prevention efforts through education initiatives.
“The bill is designed to prioritize the growth and development of the Mille Lacs Band communities while stopping those illicit markets for cannabis and related products. Additionally, it promotes a safeguard for the band’s sovereignty,” Merrill said.
Education will also be emphasized to empower individuals to make informed decisions around cannabis, she noted.
“We plan on being leaders in the industry,” Merrill said. “Our citizens expect nothing less than for us to be the best and try to lead in anything we do.”
Editor’s note: A previous version of this story misspelled Joe Nayquonabe’s last name on second reference. The story has been updated.
