$2.5M Loan For Tribal Cannabis Facility Approved By Minnesota State Agency, Overriding Board Opposition

The Minnesota Department of Iron Range Resources and Rehabilitation (IRRR) has decided to proceed with a $2.5 million loan to the Fond du Lac Band of Lake Superior Chippewa. This decision supports the establishment of a cannabis cultivation and manufacturing facility on tribal land, despite the advisory board’s recommendation against it.

Board Rejection Overridden By Commissioner's Decision

On Tuesday, the IRRR Advisory Board voted down the proposal 5-2 along party lines. However, IRRR commissioner Ida Rukavina issued a statement affirming that the project met the agency’s application guidelines and had been thoroughly vetted by staff, reported MPR News. “This project will support numerous new manufacturing jobs in a rural area of St. Louis County that will further diversify and strengthen our region's economy,” Rukavina said.

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Multi-Million Dollar Tribal Cannabis Investment

The Fond du Lac Cannabis Corporation, a subsidiary of the Fond du Lac Band, plans to use the loan to purchase equipment for an 18,000-square-foot facility in Brookston. The Band also plans to sell cannabis products in a separate retail building in Carlton County. The IRRR's Technical Advisory Committee had recommended approving the loan, along with an additional $250,000 for infrastructure.

A proposed $2.5 million loan from the Minnesota Department of Employment and Economic Development (DEED) and $9.45 million in equity from the Band are also part of the investment package. Despite opposition from board members like State Rep. Ben Davis (R) who voiced concerns about public funds being used for recreational cannabis, the project is set to move forward.

Read also: Negotiations Aim To Elevate Tribal Nations In Minnesota’s Cannabis Market 

Job Creation And Economic Impact Under Scrutiny

This decision follows the Board’s earlier support for a $10 million loan to Hwy35, a Missouri-based company, for a cannabis operation in Grand Rapids. The Fond du Lac project is expected to create 55 jobs with wages ranging from $16 to $18 per hour. The facility will produce 120 to 240 pounds of cannabis flower per month and manufacture approximately 15,000 edibles and concentrate products monthly.

Republican State Rep. Roger Skraba questioned the feasibility of recruiting employees at the proposed wages and the potential for other tribal entities to seek similar funding. Meanwhile, the IRRR Board unanimously approved a $950,000 loan for Finnegan's Farm to expand its hemp processing capabilities.

This loan approval comes within the framework of last year’s legalization of cannabis for adult use in Minnesota. Tribes can operate cannabis businesses without a state license and several have already started operations. The state is still finalizing industry guidelines, with broader licensing expected in 2025.

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