First Native American Tribe Prepares to Open Legal Marijuana Business

By May Wilkerson 07/15/15

Members of the Flandreau Santee Sioux Tribe are hoping to launch a lucrative marijuana business.

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A Native American tribe in eastern South Dakota is preparing to be the first in the country to open a legal marijuana business, but the legalities have raised some concerns.

Last December, the U.S. Justice Department announced that Indian tribes across the country can legally grow and sell marijuana as long as they adhere to federal regulations, like those in place in Colorado and other states where the drug is legal.

The grow facility on the Flandreau reservation is currently being designed and developed by Colorado-based firm Monarch America and should be open by Christmas, if all goes according to plan.

Members of the Flandreau Santee Sioux Tribe are reportedly hopeful that the enterprise will be lucrative for the tribe, much like their booming casino businesses. But there has been some controversy as to whether the impending business venture is actually legal.

South Dakota Attorney General Marty Jackley cautions that the legal status of marijuana on the reservation is not “black and white.” He questions whether the initiative only applies in states where marijuana has been legalized, which don’t include South Dakota.

"I want to encourage tribal leaders to continue to work with state authorities to better ensure ... that both Indian and non-Indian persons are not put in harm's way by the jurisdiction complexities being created by our federal government," he said.

But Eric Hagen, CEO of Monarch America, insists that the feds won’t prosecute tribes or visitors who buy and use pot, as long as growth and distribution is strictly regulated in accordance with federal guidelines. He promises that Flandreau will have even stricter regulations than in states like Colorado and Washington.

Another legal hurdle will be preventing marijuana from leaving the reservation, a concern for local law enforcement. Hagen insists this won’t be a problem, thanks to a "radio frequency identification (RFID) inventory and tracking system" his company is using to track marijuana "from seed to sale, ensuring products do not leave designated areas."

"I personally don't believe it will remain in the building," said Flandreau Police Chief Anthony Schrad. "You can purchase the marijuana in the lounge, but it seems to me it would be very easy to remove the RFID tag from the container you purchase it in, transfer the marijuana to your own personal vial and leave with it."

Hagen says this won’t be a problem, since the business will only permit people to purchase one gram of marijuana at a time, and it must be consumed on the premises. "It's like beer and going to a bar," he said. "You don't grab a six-pack, then drink one and try to walk out the door with the other five. Again, it's just not going to happen."

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May Wilkerson is a writer, comic and Managing Editor @someecards. Co-host of the podcast Crazy; In Bed w/alyssalimp. She is also the top Google result for "insufferable lunatic." Follow this insufferable lunatic on Twitter.