By Ernest Scheyder
WILLISTON, N.D. (Reuters) - The former chairman of a North Dakota Indian nation that controls one-third of the state's oil output has formed a marijuana company to help tribes around the United States produce and distribute the drug.
Tex "Red-Tipped Arrow" Hall, who until last fall led the Three Affiliated Tribes of the Mandan, Hidatsa and Arikara (MHA) Nation, has formed Native American Organics LLC with California-based Wright Family Organics LLC, a medical marijuana company, the companies said in a statement.
Native American Organics said it will help Indian tribes grow and distribute marijuana to wherever legally possible, as well as offer expertise on hydroponics and genetics and advice on how best to work with state and federal officials.
"In a matter of time, this industry could be just as big as gaming is for tribes, if not bigger," Hall said in an interview on Tuesday.
While legal jurisdiction can be complex, most Indian reservations are technically sovereign nations within the United States, with some federal law enforcement oversight.
Last December, the U.S. Department of Justice said it would no longer enforce laws that regulate the growing and selling of marijuana on reservations, a ruling that paved the way for Native American Organics.
Marijuana is illegal to possess in North Dakota, Hall's home state, though it is not illegal to produce on the reservation. Native American Organics said it will work on "breaking down barriers to entry" across the United States.
The company said it will conform to a mission, long held by Hall, for tribes to be self-sufficient and support each others' economies. As tribal chairman, Hall supported lending funds generated from oil extraction to poorer tribes, though his term ended controversially after a report criticized his personal business dealings.
The MHA Nation lives on Fort Berthold Indian Reservation, where one-third of the nearly 1.2 million barrels of oil produced each day in the state is extracted, bringing the tribes more than $1 billion in oil tax revenue since 2008.
Native American Organics would help Hall extend his plan for cross-tribal support for marijuana, considered a multibillion-dollar market in the United States as it is increasingly used as a palliative for cancer and other diseases.
Medical marijuana is legal in 23 states and voters have approved it for recreational use in four states and Washington, D.C.
A federal ban on the possession of marijuana, which limits options for legal marijuana businesses to gain access to the U.S. banking system, could be a boon for Indian-owned marijuana manufacturers. American-Indian banks aren't required to follow certain U.S. financial regulations.
The Bureau of Indian Affairs did not respond to a request for comment about the formation of the business and the economy of marijuana on reservations.
(Reporting by Ernest Scheyder; Editing by Terry Wade and Jeffrey Benkoe)