The Santee Sioux is opening the nation’s first marijuana resort on its reservation in South Dakota. The experiment could offer a new money-making model for tribes nationwide seeking economic opportunities beyond casinos.

Santee Sioux leaders plan to grow their own marijuana and sell it in a smoking lounge that will include a nightclub, arcade games, bar and food service and, eventually, slot machines and an outdoor music venue.

“We want it to be an adult playground,” the tribal president, Anthony Reider, said. “There’s nowhere else in America that has something like this.”

The tribe said the project could generate up to $2m a month in profit, and work is already under way on the growing facility. The first marijuana cigarettes are expected to go on sale 31 December at a New Year’s Eve party.

The legalization of marijuana on the Santee Sioux land came in June, months after the Department of Justice outlined a new policy that allows Indian tribes to grow and sell marijuana under the same conditions as some states.

Many tribes are hesitant to jump into the marijuana business. But the profit potential has attracted the interest of many other tribes, just as the debut of slot machines and table games did almost 27 years ago.

“The vast majority of tribes have little to no economic opportunity,” said Blake Trueblood, business development director at the national center for American Indian enterprise development. For those tribes, “this is something that you might look at and say, ‘We’ve got to do something’.”

A marijuana resort open to the public has never been tried in the US. Even in states such as Colorado and Washington, where marijuana is legal, consumption in public places is generally forbidden, although pro-marijuana activists want to loosen restrictions. Colorado tolerates a handful of private marijuana clubs.

Unlike the vast reservations in western South Dakota, where poverty is widespread, the little-known Flandreau Santee Sioux Reservation is on 5000 acres (2000 hectares) of gently rolling land along the Big Sioux River.

The Santee Sioux hope to use marijuana in the same way many tribes rely on casinos: to make money for community services and to provide a monthly income to tribal members. Existing enterprises support family homes, a senior living community, a clinic and a community center offering after-school programs.

Reider hopes marijuana profits can fund more housing, an addiction treatment center and an overhaul of the clinic.

The prosperity that marijuana could bring to Indian country comes with huge caveats. The drug remains illegal under federal law, and only Congress can change its status. The administration that moves into the White House in 2017 could overturn the Department of Justice’s decision that made marijuana cultivation possible on tribal lands.