Grower Joe Rey tends marijuana plants at 3-D Denver Discreet Dispensary in December 2013. (Denver Post file)

South Dakota Indian tribe signs deal with Colorado company to grow pot

SIOUX FALLS, S.D. — An Indian tribe in South Dakota that plans to start selling marijuana for recreational and medicinal purposes envisions its single point of sale on the reservation as a facility that will also have a bowling alley, a bar and other entertainment features.

Leaders of the Flandreau Santee Sioux Tribe on Wednesday unveiled details of their plans to sell cannabis after signing a contract with Denver-based Monarch America Inc., which will be responsible for the design, construction and development of an indoor growing site that will feature a marijuana consumption lounge.

The tribe, which already operates a casino on its land, is looking at the operation as a source of revenue that would allow the community to develop housing, build an addiction treatment center and improve the local clinic, among other projects. Tribal leaders legalized the sale of marijuana on the reservation earlier this month and are estimating a monthly profit of up to $2 million.

“When completed, this economic development project will help to create many important additional new jobs and increase economic stability for the tribe and its many members,” tribal President Anthony Reider said. The growing facility alone is expected to be 10,000 square feet.

The plan for the facility’s 15,000-square-foot recreational area calls for 10 bowling lanes, arcade games, gambling machines, bar and food service, as well as an outdoor patio and music venue in an existing structure adjacent to the Royal River Casino and Hotel. The tribe intends to host large-scale outdoor music festivals on tribal trust land where on-site marijuana consumption would be allowed.

South Dakota Attorney General Marty Jackley has said any changes in tribal laws won’t affect any non-Indians or any nontribal lands, and therefore, non-Indians smoking marijuana on tribal lands would be breaking state law. Still, the tribe estimates thousands of people — Native and non-Native — will flock to the reservation to consume marijuana.

Reider said traffic studies of interstate highways that the tribe considered before making its decision showed that people would travel to the reservation from Fargo, North Dakota; Omaha, Nebraska; and Rapid City, Sioux Falls and communities in between.

Under the agreement signed Wednesday, the tribe will maintain 100 percent ownership and control over the growing operation, but the company will receive a fixed percentage fee on net revenues for consulting services related to the facility and cannabis-growing advice. The agreement is for five years with two five-year renewal options.

“Our Monarch America team looks forward to utilizing its expertise to design and build a world-class grow facility in Flandreau that can serve as a case study for other federally recognized tribes looking for economic diversification opportunities and considering entering the marijuana or hemp sector,” the company’s CEO, Eric Hagen, said in a statement.

The prospect of pot on tribal land was made possible after the U.S. Justice Department outlined a new policy in December allowing Indian tribes, which are considered sovereign nations, to grow and sell marijuana on their lands as long as they follow the same federal conditions laid out for states that have legalized the drug.

The company expects to build the facility within the next two months. The tribe plans to begin selling the drug by Jan. 1.


Regina Garcia Cano can be reached on Twitter: @reginagarciakNO