Fond du Lac Band set to start cannabis production in northeastern Minnesota

DULUTH — The Fond du Lac Band of Lake Superior Chippewa will soon join three other Minnesota tribes in the cannabis business, filling a niche in a region of the state where no other marijuana operations yet exist.

The Iron Range Resources and Rehabilitation (IRRR) department will grant a $2.5 million loan to support the $14.7 million project, despite the department's advisory board recommending against it at its Tuesday meeting in Eveleth. Whether the band supported mining was among the first questions tribal leaders faced there. The band has filed several legal challenges to permits related to copper-nickel mining.

IRRR Commissioner Ida Rukavina later said the department would invest in Fond du Lac Cannabis Corp. regardless.

The project had been thoroughly vetted by the agency and "will support numerous new manufacturing jobs in a rural area of St. Louis County that will further diversify and strengthen our region's economy," she said in a news release following the meeting.

An 18,000-square-foot cultivation and manufacturing building will be constructed in Brookston, Minn., about 27 miles west of Duluth. Medical and recreational cannabis products will be sold near Black Bear Casino Resort along the Hwy. 210 corridor in Carlton County.

The IRRR will also give a $250,000 grant for the project, which is expected to create 55 jobs. The money will go toward furniture, fixtures and equipment for the cultivation of cannabis and manufacturing of products. A $2.5 million loan is expected to come from the state's Department of Employment and Economic Development Minnesota 21st Century Fund.

State Sen. Rob Farnsworth, R-Hibbing, said he didn't want to spend public money on recreational marijuana, and questioned the band's stance on mining since it asked for money that stems from the industry. State law requires mining companies in Minnesota to pay a production tax instead of property taxes. Along with counties, cities, townships and school districts within the boundaries of the northeastern Minnesota taconite assistance area, a large portion is shared with the IRRR, which distributes to businesses, communities and school districts via grants and loans.

As a downstream community worried about water quality standards, the band is opposed to irresponsible mining but not mining as a whole, said Vice Chair Roger Smith Sr.

The band understands the need for mining and jobs, he said, but wants to protect the St. Louis River, which flows through its reservation.

The cannabis operation is "about creating jobs for us" in an area that doesn't have many, said Robert Abramowski, secretary and treasurer of the band.

State Sen. Grant Hauschild, D-Hermantown, said that while he may have concerns about the band's positions on certain projects, it's critical to partner with it, especially on a project that can be an economic driver.

"My hope is this is a first step in engaging in future conversations where we can talk about economic benefits of all sorts of industries; non-ferrous, timber, cannabis and beyond," Hauschild said.

The board voted 5-2 against it, but did approve nearly $1 million for a Two Harbors hemp business, Finnegan's Farm, so it can process hemp in-house. Some board members appeared to draw a line between low-dose hemp-derived products and marijuana. Hemp-derived products are required to contain less THC than marijuana products under Minnesota law. Finnegan's Farm sells THC and CBD gummies, drinks and tinctures.

Last fall, the IRRR awarded a $10 million loan to a Missouri cannabis entrepreneur and a local partner looking to build a cannabis growing operation in the former Ainsworth timber mill in Grand Rapids.

Because of their sovereign status, Minnesota tribes can begin cannabis operations without state licensing. Recreational cannabis was legalized here in 2023.