The Passamaquoddy Tribe at Indian Township has signed a letter of intent with a Denver-based medical marijuana management and consulting company to develop a cultivation facility on tribal land in Washington County.

Monarch America Inc. announced last week that it intends to design and manage a “state of the art” marijuana cultivation facility in an existing 35,000-square-foot building on Passamaquoddy Tribal Trust Land in Princeton, Maine.

Billy Nicholas, chief of the Passamaquoddy Tribe at Indian Township, confirmed Tuesday that the tribe had signed the letter of intent, but characterized the potential operation as an industrial hemp production facility rather than a medical marijuana cultivation facility.

“We’re talking about starting off with hemp production and as the state of Maine and federal law allows, we’ll reassess to see whether we expand into other areas,” Nicholas said. “But don’t get me wrong: We’re not here to break the law.”

If the tribal government formalizes a partnership with Monarch, it will enter a fuzzy legal area. Although Maine has legalized medical marijuana and industrial hemp production, the federal government considers both illegal. Hemp and marijuana are variants of the cannabis plant, but the latter contains more of the chemical that produces mind-altering effects while the former can be used in myriad products, from building materials to clothing to plastic composites.

Nicholas hopes the tribal government, based in Princeton, will be able to reach an agreement with Monarch within the next month. If the facility is created, it could provide 15 jobs to start, he said.

“The business venture allows us to have a better economic base and exercise our sovereignty when it comes to business operations and employment on the reservation, and off the reservation,” he said.

POT LAW ENFORCEMENT, PRIORITIES

Eric Hagen, Monarch’s CEO, said the company is interested in working with the tribe to build the facility and help it navigate the complex legal landscape surrounding the cultivation and sale of medical and recreational marijuana.

Hagen, who says he is very familiar with Maine marijuana laws, said state laws aren’t necessarily a hindrance to sovereign Native American tribes that want to produce or sell marijuana, even for recreational use.

Federally recognized tribes are sovereign nations, he said. But there are overlapping decisions from the U.S. Justice Department around enforcement actions in states that legalize marijuana use. Among them is “the Cole memorandum,” which says federal officials should focus on eight priorities, including the prevention of marijuana sales to minors and using sales to finance criminal enterprises. Otherwise, enforcement should be left to local authorities.

In a clarification issued last year, the Justice Department concluded it would allow the nation’s Indian tribes to legalize and regulate medicinal or recreational marijuana on their reservations as long as they abide by the same federal guidelines that states must follow.

Hagen and Monarch America are in discussions with several tribes around the country about how to develop medical marijuana businesses in accordance with the Cole memorandum. It is currently working with the Flandreau Santee Sioux Tribe in South Dakota to build a marijuana cultivation facility. Hagen said the project is going smoothly even though South Dakota considers marijuana illegal for any use, including medicinal.

OPPORTUNITY FOR REVENUE, JOBS

It’s not clear whether the Passamaquoddy Tribe at Indian Township is planning to legalize recreational marijuana on its reservation. Other Maine tribes, including the Passamaquoddy Tribe at Pleasant Point, have said in the past that they’re investigating the potential economic opportunity of legalizing pot.

Hagen said part of the due diligence expected over the next month in the Passamaquoddy Tribe agreement is to reach out to the state, its attorney general and the U.S. attorney for Maine to discuss the initiative. Nicholas said the tribe had contacted Gov. Paul LePage’s legal staff to discuss the project, but the governor declined to meet.

“He would meet on other economic things, but not on this issue,” Nicholas said.

Nationally, tribal leaders are talking about the possibility of marijuana cultivation as a way to generate income and create jobs. About 200 tribal leaders met this spring at the National Congress of American Indians, which included a talk on legalization by Justice Department officials. Legalization also was the topic of a conference at the Tulalip Indian Tribes’ resort in Tulalip, Washington, where 75 tribes gathered in late February, and was on the agenda at a major tribal economic summit in Las Vegas in March.

Nicholas said the Passamaquoddy Tribe is pursuing this endeavor to provide economic opportunity to its members and the area. He cited the tribe’s past failed attempts to create a casino as a point of frustration.

“In the political sense, we’ve been stopped too many times in regard to gaming and other things,” Nicholas said. “I can’t speak for Pleasant Point, but as governor we are looking at economic projects that bring good wages and an economic base to this reservation as well as the surrounding area. And legally we can do it.”

A ballot initiative to legalize marijuana for recreational use is underway in Maine. When asked if Monarch America is positioning itself and the Passamaquoddy Tribe to take advantage of that initiative if it is successful, Hagen said: “Absolutely. We try to position all our clients to be first to market and (to take advantage of) opportunities with future laws that come down the line.”

NEW LAW ON HEMP PRODUCTION

In its last session, the Maine Legislature created a law allowing the industrial cultivation of hemp, and last year’s federal Farm Bill opened the doors to industrial hemp production through university-associated pilot cultivation programs.

Under the new Maine hemp law, businesses need to receive a license from the Maine Department of Agriculture, Conservation and Forestry. Any businesses interested in growing industrial hemp also would need to be affiliated with a university, said Rep. Deborah Anderson, a Republican from Chelsea who sponsored the Maine hemp bill.

“So not just any company is going to be able to come in and cultivate industrial hemp,” she said.

Sanderson said tribal representatives weren’t at the table when discussing the passage of her bill, but she had heard rumors that some of the tribes were interested in cultivation of hemp on their lands.

John Bott, an agriculture department spokesman, said the department is in the process of writing the rules for Maine’s industrial hemp cultivation law. He said it has received many inquiries from businesses, but none from Monarch America as of Tuesday.

Assuming a final agreement with the Passamaquoddy Tribe is reached, Hagen said it would be about three months before operations got underway.

“It gets them one step closer to complete sovereignty,” Hagen said. “That’s the goal for most tribes across the United States.”

This story was updated at 10:10 a.m., Sept. 9, to correct the spelling of John Bott’s last name.

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