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In late January, the Pinoleville Pomo Nation made headlines when the tribe announced that they would take the Department of Justice (DOJ) up on its offer to grow and sell marijuana on sovereign land. When the DOJ announced this in December 2014, Technical420 recognized this event as a catalyst for industry growth. Investors are now claiming that at least 100 additional tribes are exploring the rapidly growing marijuana industry.
The Pinoleville tribe signed a deal with FoxBarry Development Company to develop an indoor grow facility after announcing that the tribe would be entering the marijuana industry.
“Pinoleville is expected to break ground on a $10 million, 100,000-square-foot greenhouse within 60 days.” said Barry Brautman, president of FoxBarry Companies, a group of Kansas-based operations that specialize in developing Native business enterprises.
When FoxBarry entered into the agreement the Pinoleville tribe, Foxberry was also in talks with other Native American tribes and they had agreed to terms with another Indian Nation that did not want to disclose their name.
FoxBerry Contacted By More Than 100 Tribes
“We’ve been contacted by more than 100 tribes from coast to coast that wanted to get into the business in one way or another,” Brautman said. “They have expressed interest and some are certainly actively pursuing the interest.”
In our previous article, we stated that the Pinoleville Pomo Nation was just the start and that they would create a domino effect. We were right. Brautman said that several other tribes may enter the marijuana industry as early as this spring. He declined to name the tribes, citing confidentiality agreements.
How Do I Invest?
When the Justice Department released a memo stating that sovereign Indian nations can grow or sell marijuana on tribal lands without fear of federal harassment, many new opportunities were created. A number of publicly traded cannabis companies capitalized on this opportunity by entering into agreements with these Sovereign Nations.
United Cannabis (CNAB:OTCQB) is offering its consulting services to the FoxBarry-managed medical marijuana farms, particularly related to cultivation, harvesting, processing and sales of medical marijuana and medical marijuana-infused products. The agreement states that CNAB will receive $200,000 in prepaid royalties and 15 percent of net sales. In return, FoxBarry will have exclusive distribution rights to United Cannabis products in California.
Monarch America Inc. (BTFL:OTCQB) appointed Mr. Robert Shepherd to be the company’s Native American Tribal Relations Officer. Robert Shepherd is the former Chairman of the Great Sioux Nation of South Dakota (Feb. 2012 – Jan. 2015), the former Secretary of the National Congress of American Indians (Oct. 2013 – Jan. 2015), the former Chairman of and Sisseton Wahpeton Oyate (Jan. 2011 – Jan. 2015), and former Co-Chairman of the Tribal Interior Budget Council (Mar. 2013 – Nov. 2014).
Medican Enterprises Inc. (MDCN:OTCQB) formed a new subsidiary, Medican Nations, to focus on building strategic partnerships with Indian communities in the United States and Canada. The company also appointed Demitri Downing as Chief Executive Officer of Medican Nations. The subsidiary will focus on the involvement of Native American communities in the indoor gardening and marijuana industries Demitri Downing was a former prosecutor for the Tohono O’odham Nation and spent fifteen years working in law and government relations for reservations and numerous other jurisdictions.
Terra Tech Corp (TRTC:OTCQB) has been one of the companies actively pursuing this new opportunity. Terra Tech is negotiating with 10 tribes or groups that are eying the market and weighing their options.
“California has the most fruitful market, but there’s opportunity in Florida and on the East Coast,” said Derek Peterson, CEO of Terra Tech, a hydroponic farming company with operations in New Jersey and California that joined the medical marijuana industry in January 2014.
“We’re finding that the best markets are large areas with dense populations,” he said. “States with big populations but struggling marijuana programs.”
Peterson expects to see investors go after tribes in states where marijuana use is restricted like Florida and New York. These two states have low supply and high demand, which could lead to lucrative ventures on tribal land.
“Tribes have sovereignty, which means a better level of safety, a better level of protection for investors,” he said. “There’s a level of uncertainty about medical marijuana right now with a presidential election coming up and a new attorney general coming. If the industry can do business with tribes, it’s a lot more stable.”
Skepticism Still Exists
“There are lots of outside forces looking to take advantage of potential economic development in the tribal context,” said Anthony Broadman, a partner at Galanda Broadman, a Seattle-based, Native-owned law firm. “So you would expect that the outside entities are looking to help, exploit, assist, develop, incubate—all the good and bad things that happen with development in Indian Country.”
Walter Lamar, president of Lamar Associates, a Native-owned consulting and professional services company, warns tribes to be cautious when considering it because marijuana is still an illegal drug.
“We’re going to have to watch out for opportunists and hucksters,” said Lamar, who is Blackfeet and Wichita. “The promise of substantial revenues that are coming from this will lure some tribes into it blindly.”
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