- By Elyse Wild
- Economic Development
FLANDREAU, S.D. — Ten months after opening Native Nations Cannabis, the Flandreau Santee Sioux Tribe is expanding its medical marijuana operations with two new grow facilities to keep up with explosive demand.
“It’s been amazing, and that might actually be downplaying it,” said David Kills-A-Hundred, a tribal member and public relations and communications specialist for the Flandreau Santee Sioux Tribe. “The profit from the first year alone — and we haven’t even gotten to the first year — is substantial.”
Between the dispensary and growing facility, the Flandreau, S.D.-based Native Nations Cannabis employs 50 people. The tribe expects the first of the two new grow facilities to open this summer, with the other following soon after.
The expansion caps off a year of rapid growth, given that the Flandreau Santee Sioux Tribe opened Native Nation Cannabis on July 1, 2021. The launch came eight years after the tribe legalized medical and recreational marijuana within the reservation, and corresponded with the state’s legalization of medical marijuana.
While the tribe could have flexed its sovereignty to open its dispensary earlier, officials waited to launch the venture until state legalization took effect to avoid putting customers at risk of arrest upon leaving the reservation.
To put the success of the tribe’s venture in context, 52 state-licensed dispensaries operate in the state and serve fewer than 425 registered patients in the state's medical cannabis program, according to data from the South Dakota Health Department.
However, Native Nations Cannabis serves around 10,500 tribally registered patients as of this writing.
With demand outstripping supply, Native Nations Cannabis has resorted to rationing products to keep up with purchases. The company could sell up to 28 grams of flower to an individual in a single day, but have opted to limit customers to 4 grams.
The company currently harvests up to 80 pounds of marjiuana per week from its 10,000-square-foot grow facility.
Kills-A-Hundred emphasizes the financial effect that the dispensary has had on the tribe has been nothing short of significant.
“We have been able to increase the living standards for every tribal member that we have on the reservation,” he told Tribal Business News.
Todd Bergeron, a managing partner at Conor Green Consulting LLC, a Chicago-based firm that has been partnering with tribes to access the legal cannabis market since 2015, thinks the burgeoning cannabis sector could prove to be as profitable for tribes as casinos, if not more.
While Indian gaming gross revenue data have not yet been compiled for 2021, most estimates put the sector’s revenues at or ahead of 2019, when gross gaming revenues hit $34.6 billion, according to the National Indian Gaming Commission. By comparison, the legal marijuana market in the United States is currently valued at $15.2 billion and is projected to reach $38.2 billion by 2028.
“If tribes can have 10 or 20 percent of the market, those are massive numbers,” Bergeron said. “That is billions of dollars a year that could be circulating through tribes.”
However, tribes also face an extraordinarily complex regulatory landscape, he added. They also need to decide whether it makes sense to “play ball with the state” and participate in state licensing programs, forgoing their sovereign rights.
“It’s the complexity of marijuana being largely illegal and them having sovereign status, which puts them on the same playing level as states,” Bergeron said. “But now you have the additional hassle of setting up a regulatory infrastructure that basically mimics the state and figuring out how to monitor it and manage it.”
The Flandreau Santee Sioux Tribe was uniquely positioned to find quick success with Native Nations Cannabis. The sovereign nation has extensive regulatory experience, having opened the Flandreau-based Royal River Casino and Hotel in 1990. The tribe also has a “fearless and progressive” legal team and executive committee and has invested in transparency and education with the surrounding communities to achieve local buy-in, according to Kills-A-Hundred.
Besides establishing its own operations, the Flandreau Santee Sioux Tribe is using its knowledge to help other tribes who are looking to get into the cannabis market. Currently, the tribe is partnering with the Saint Regis Mohawk Tribe in New York to expand Native Nations Cannabis, and executives plan to seek more partnerships with tribes across the country.
The meteoric success of Native Nations Cannabis is underscored by the fact that medical marijuana appeared on the South Dakota ballot three times before passing, first in 2006, then in 2010 and finally in 2020.
“We are becoming more well-known within Native communities,” Kills-A-Hundred said. “If we are able to do this in a state where it is still looked down upon and frowned upon … that can help other tribes do it and perhaps even lift themselves out of positions of poverty. We would like to see tribes across the nation be able to do this.”
Currently, 37 states regulate cannabis for medical use by qualified individuals, with another 18 states regulating cannabis for recreational use.
As more and more states pass laws regulating the use of medical and recreational cannabis, Bergeron would like to see tribes emerge as industry leaders, but not solely for economic reasons.
“There is a history and story to tell,” Bergeron said. “Who better to have a significant stake in plant medicine? As we see it legalized at the state and maybe even the federal level, it just has to have tribal inclusion.”
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