(This is the second part of a two-part story from Hemp Industry Daily examining the developing hemp markets on tribal lands in the United States. Read the first installment here.

For more detail about tribes growing hemp, check out Hemp Industry Daily’s Hemp & CBD Factbook, available for purchase here.)

Hemp and CBD companies have been working with American Indian tribes since the 2018 Farm Bill created a legal pathway for tribes to produce hemp and commercial outlets for selling it.

Some mission-driven food, beverage and CBD manufacturers have developed or are working to set up supply-chain partnerships with tribes to provide fair-trade, living-wage economic impact opportunities to American Indians — communities that are often impoverished and suffer high unemployment rates.

Companies navigate tribal relations

Cultural barriers and a lack of communication can complicate partnerships between tribes and corporations, according to Tim Houseberg, a Cherokee Nation citizen and co-founder and vice president of the Native Health Matters Foundation in Oklahoma.

“Unfortunately, half of the thing about dealing with Indian tribes is the culture … which means great deals are lost all the time because the business men didn’t know the culture,” Houseberg said.

“It also means bad deals are done all the time because of the culture of corruption in Indian tribes.”

And not all companies looking to do business with American Indian tribes have the tribes’ best interests at heart, causing lost money and assets, and sullying tribal nations’ appetites for working with outside commercial entities.

That’s why partnerships must be approached with utmost care, according to Andrei McQuillan, global head of sales and marketing at EcoGen Biosciences, a vertically integrated hemp and CBD company based in Grand Junction, Colorado, that has plans to work with the Turtle Mountain Chippewa Nation and Winnebago Tribe this year.

McQuillan, who is of indigenous heritage, said that some hemp companies may not have the perspective necessary to see how working with tribes can provide hemp partnership opportunities.

“From an agricultural standpoint, these are agrarian cultures historically — they have been farmers through their heritage. They have fertile, vast lands, and their economies have been undersupported by agriculture,” McQuillan told Hemp Industry Daily.

“They also have some cultural social issues … that can be addressed by hemp and hemp-derived products. So it’s a product that not only can benefit their economy, but that can benefit their culture.”

Success stories

Manufacturers like Evo Hemp, a Boulder, Colorado-based CBD and hemp foods company, have committed to paying farmers significantly higher prices, without having to drive up prices for consumer products.

Evo Hemp began working with Alex White Plume, a veteran American Indian hemp producer from the Oglala Sioux Tribe of the Pine Ridge Reservation in South Dakota.

White Plume was impactful in advocating for using industrial hemp as a way to revitalize his community, which is still in one of the most impoverished areas in the country, with an 87% unemployment rate and an average adult life span of 55 years old, according to Ari Sherman, Evo Hemp co-founder.

The reservation had previously been targeted and raided for growing hemp in the late 90s.

“We found this great partnership with Alex where he would be able to have him and his family cultivate the hemp right there on the reservation, and we would create supply contracts that would allow them to get a significantly higher amount of income per acre, even than the CBD farmers, in competing states,” Sherman said.

Even after the CBD wholesale prices have plummeted significantly, Evo Hemp still maintains its mission to pay a fair market price to tribal hemp producer, paying five times the average price for CBD oil produced by its native partners to help them set up the production infrastructure needed, Sherman said.

“It’s still a very labor- and cash-intensive business, and because of the commodities market of hemp right now, it’s kind of plummeted,” he said.

“We’re in it for the story and we want this to be a big success and watch the Pine Ridge reservation get out of that No. 1 spot of the most impoverished community. … We want to make a real economic impact.”

Marketing benefits

The partnerships with tribes also benefit brands at the consumer level because their stories resonate both with retail product buyers and consumers.

American consumers, especially younger demographics, are “voting with their dollars” and gravitating more toward companies that focus on the “triple bottom line” of profit, people and planet.

They want to support brands that help to build a new supply and support economic development for indigenous populations, according to Eric Schnell, cofounder of BeyondBrands, which produces mood33 hemp-infused herbal teas and sources hemp produced through Evo Hemp’s tribal partners.

“One thing I’ve learned about being on the mission-based side of the food and beverage industry for two decades and data coming out the past few years on millennials … is that at this point 85% of consumers or more that are asked their opinion if they would pay a premium for a product that was based on a fair trade or mission based supply chain, the answer is they would,” Schnell told Hemp Industry Daily.

Laura Drotleff can be reached at [email protected]

(This is the first in a series of stories from Hemp Industry Daily examining the developing hemp markets on tribal lands in the United States. For more detail about tribes growing hemp, check out Hemp Industry Daily’s Hemp & CBD Factbook, available for purchase here.)

It’s been more than two years since nationwide hemp legalization offered a legal pathway for American Indian tribes to produce hemp and CBD and find commercial outlets for selling it.

But it hasn’t been an easy road for tribes to establish hemp production.

When Congress first allowed experimentation with legal hemp, through the 2014 Farm Bill, states were granted the authority to set up hemp pilot research programs. But the law did not provide American Indian tribes the authority to implement their own industrial hemp cultivation programs regardless of state law.

The Menominee tribe of Wisconsin found out the hard way in 2015.

The tribe tried to grow industrial hemp, only to have federal agents seize 30,000 plants from its reservation after a federal court ruled that year that the 2014 Farm Bill required that hemp be cultivated in compliance with state law. At the time, hemp production was not yet legal in Wisconsin.

The 2018 Farm Bill, aimed to fix that, directing the U.S. Department of Agriculture to develop a system for American Indian tribes to submit plans for hemp production on tribal lands.

Delays continued

Even after the passage of the 2018 Farm Bill, tribes were forced to wait until the USDA established hemp production regulations that could apply to indigenous lands.

By the summer of 2019, the Flandreau Santee Sioux Tribe in South Dakota filed a lawsuit against the USDA over delays.

The tribe argued that that under the 2018 Farm Bill, the agency was required to approve production plans within 60 days, regardless of whether regulations were in place. Failure to do this impeded American Indians from capitalizing on hemp production during the 2019 season.

The tribe requested a temporary restraining order against the USDA and a preliminary injunction to allow it to proceed with its hemp crop in 2019. But the request was denied, citing the USDA’s announcement that it had planned to finalized rules in the fall, in time for the 2020 growing season.

To date, some 40 tribes have received USDA approval for their hemp production plans, while five plans are still under USDA review. Three other tribes have indicated they are working on production plans for submission.

It is difficult to quantify how many acres of hemp are under production or exactly what is being grown in the United States.

Trouble in the tribes

Another concern among American Indian tribes is corruption within tribal councils.

Tim Houseberg, a Cherokee Nation citizen and co-founder and vice president of the Native Health Matters Foundation, said that rulemaking can be frustratingly slow for tribal citizens.

“The only thing harder on Indian tribes than the United States government has been the tribal government,” Houseberg told Hemp Industry Daily.

Some tribes have dealt with unsavory practices in which tribal members have taken advantage of the land they have leased by growing federally illegal marijuana under the auspices of hemp production.

A three-day FBI raid of 21 farms in the Shiprock area of the Navajo Nation in New Mexico late last year destroyed more than a quarter million marijuana plants that were allegedly grown illegally as unlicensed hemp on the tribal nation’s lands.

Such issues have made some tribes wary of getting involved in high-THC marijuana production as well.

USDA’s next steps

In the first quarter of this year, the USDA is expected to release its State and Tribal Hemp Annual Report, which should provide more clarity on the size and scope of hemp production in 2020.

States and tribes are required to report the total acreage planted, harvested and disposed in their jurisdictions.

The agency addressed one slowdown facing tribes just this month when it released its final rule for nationwide hemp production.

Laura Drotleff can be reached at [email protected]