Prairie Island dispensary will offer early test for recreational cannabis sales closer to the Twin Cities

It’s not quite in the metro, but a new dispensary next to the Treasure Island Casino is close enough to be the first test of demand for recreational cannabis, coming at least nine months before other stores will open.

Island Peži, the latest cannabis store to open on tribal land in Minnesota, is already open but will be officially launched Saturday. The dispensary is located between Hastings and Red Wing on Prairie Island Indian Community land, about 40 minutes from St. Paul. That makes it much closer than previously opened tribal stores by the White Earth Nation, the Red Lake Nation and the Leech Lake Band of Ojibwe.

Island Peži (pronounced pay-ZHEE) comes from the Dakota word for “grass.” The logo is based on historic beadwork produced by a tribal member, said Blake Johnson, president of the tribal company that operates the dispensary.

Johnson grew up within sight of the dispensary and is the twin brother of tribal council president Grant Johnson. He also is the tribe’s lobbyist in St. Paul and watched the evolution and eventual passage of the state’s recreational cannabis law last May. He said he has been working with the council to decide if and how the tribe would get involved in the new industry.

“I wanted to diversify our economy as a tribe. We want to be able to see opportunity. This type of income provides benefits for our community,” he said.

Like other tribal business enterprises, including the hotel and casino across a large parking lot from the dispensary, Island Peži has economic development at its core. Johnson said he expects it to employ about 35 people. Profits go to the tribal government for education, health care and other services.

Once it was clear the state law would pass, the tribe began talking to its members about it.

“There was a lot of involvement from our community members who wanted to be a part of this and see how a business comes together,” Johnson said. Not all wanted the tribe to enter the cannabis business.

“There are tribal members that still think it is  a bad thing,” he said. “But the general sense among the Dakota people is that cannabis comes from  ‘Ina Maka,’ which is Mother Earth. It’s a medicine, and we see it as that and we see it as an opportunity to provide this medicine.” 

The tribal council then developed and passed a cannabis ordinance to lay out how businesses would be created and operated and what rules would govern cultivation, use and possession of cannabis by tribal members for personal use.

While tribes within the state are subject to federal laws and regulations, they are equal sovereigns in relation to the state. So tribal ordinances and tribal regulations are created by tribal councils. Prairie Island, for example, has an ordinance passed by its tribal council. That policy created a tribal cannabis regulatory commission with membership separate from the tribal council that will license and regulate the new dispensary as well as any other cannabis businesses created.

There is another board that oversees the company that operates the dispensary and any future cultivation and manufacturing businesses.

The tribe sponsored “hard-hat parties” for officials from the Office of Cannabis Management and political leaders of the cities and towns around the dispensary to explain the project and show them the building as it was being remodeled.  

Early look at retail

The dispensary provides an early look at how stores will operate once non-tribal retail sales begin in 2025. Customers are allowed into the store in small numbers, first showing proof that they are at least 21. They are registered for the store’s loyalty program and can order products on a kiosk or wait until called by one of four budtenders behind the counter. Glass display cases show the cannabis and hemp products available.

Cannabis products are stored in a separate room and handed to budtenders as they are ordered. Each customer is limited to 2 ounces of flower, which is the state possession limit for public possession. A tribal nation sales tax of 6.875% is charged on all purchases.

The store is cash only, and an ATM machine is available. Johnson said he is working on making debit card transactions available. Restrictions on banking due to federal prohibition of cannabis that affect non-tribal cannabis businesses impact tribes as well. As customers leave the store, others are allowed to enter. Consumption is not allowed in or around the store but the tribe’s ordinance does provide for special licenses for on-site consumption at cannabis events.

“Our goal is to make it bright and welcoming so that anyone who walks in the store feels welcome and safe,” Johnson said. 

As of now, the Prairie Island tribe does not grow cannabis and instead buys its supply of raw cannabis flower from the White Earth Nation.

“We think that’s a great opportunity to have tribal trade,” Johnson said. “A long time ago tribes had tribal sovereignty trade and we’re very excited to be working with other tribes.” He said he is confident that White Earth will be able to provide enough flower to meet the needs of the Prairie Island dispensary. The arrangement gives the White Earth Nation, located four hours from the Twin Cities, access to the state’s biggest population center as well as southeastern Minnesota.

The store also carries hemp-derived edibles and beverages from existing non-tribal suppliers. Should White Earth or another tribe start manufacturing marijuana-based edibles, Prairie Island would consider adding them to its menu.

Johnson said the tribal government is considering building its own supply through both outdoor farms and indoor grow operations. The outdoor cultivation would be on 2.5 acres of tribal land. The indoor grow is planned for five different buildings of 12,000 square feet each that could also house processing and manufacturing of cannabis products.

Go-ahead decisions for  indoor grow have not been made but the intent is to use tribal-grown cannabis both for sale at tribal dispensaries and to sell into the state’s recreational market.

Johnson will fill both roles for now — president of the company that runs the new dispensary and the government relations specialist. That puts him in a rare spot of being both an operator and a lobbyist. And in his St. Paul role, Johnson is involved in negotiations with Gov. Tim Walz’s office regarding a state-tribal compact on cannabis. 

While the Prairie Island dispensary is the closest supply to the Twin Cities now, that advantage goes away once retail stores, microbusinesses and mezzobusinesses begin opening. The tribe could continue to sell cannabis at the wholesale level to non-tribal businesses but it might also be able to open its own stores off reservation lands. That is among the issues being discussed in talks between the governor’s office and 10 of the state’s 11 tribal nations.

“I think there’s a great opportunity to look at business on state lands,” he said. “We’re in discussions with the governor’s office and OCM on what a compact would look like and we look forward to the opportunity to be able to help the market out.”

Johnson said there is draft language for a compact but said there still needs to be “deeper conversations on what a compact would look like and to have those tough discussions with the state.”

Peter Callaghan

Peter Callaghan covers state government for MinnPost. Follow him on Twitter @CallaghanPeter or email him at pcallaghan@minnpost.com.

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