Tribal Council took a step last week toward financing the Cannabis Project, or CP Enterprise. The next important step will be the General Council meeting set for Monday evening, July 24.
In a narrow vote last week, Tribal Council approved the formation of Warm Springs Financial Strategies, a limited liability corporation wholly owned by the tribes.
The sole purpose of Financial Strategies LLC is to provide financing for membership-approved capital improvements and economic development, such as CP Enterprise. As will be discussed at the General Council, funding would be in the amount of $3 million.
The money comes through Warm Springs Ventures and GeoVisions, as generated by the carbon sequestration project. Carbon sequestration will net the tribes more than $10 million over a term of years, according to Ventures’ estimate.
For CP Enterprise the self-funding option eliminates the need to give an outside entity an ownership or revenue share in the project. In time, as the enterprise generates its own revenue, the $3 million would be paid back to the tribes.
The referendum in late 2015 asked whether the Confederated Tribes should “allow, regulate and operate an on-reservation, tribally owned cannabis cultivation and extraction facility….” The vote was 1,252 in favor to 198 against; or about 86 percent in favor.
Carrying out the mandate has proven to be a challenge. At first the tribes focused on necessary work with the state legislature and regulatory commission, the U.S. Attorney’s Office and BIA. Ventures and Tribal Council then established the tribal Cannabis Commission, and on-reservation regulatory documents.
For the past year the obstacle has been financing. A partnership option is not in the tribes’ best interest: This would send up to half of the revenue off the reservation, said Don Sampson, Ventures chief executive officer.
The language of the referendum would also seem to preclude an outside entity owning a part of CP Enterprise. The way to carry out the referendum, then, is for the tribes to finance the project.
In funding the CP Enterprise, the carbon sequestration revenue would be invested in economic development and new revenue, Mr. Sampson said. The process involves a supplemental budget for 2017, subject of the July 24 General Council meeting.
The process also required the formation of Warm Springs Financial Strategies LLC. By resolution (see page 7) Tribal Council approved the Financial Strategies articles of organization, and operating agreement.
At first the Council vote was two in favor, two against, and two abstain. Tribal Council Vice Chairman Jody Calica then broke the tie in favor of the resolution. His vote was to carry out the mandate of the 2015 referendum, and respect the vote of the membership, Mr. Calica said.
Voting in favor, Councilwoman Carina Miller said, “The people have voted on this, and they want to get it moving.” Warm Springs Chief Delvis Heath also voted in favor.
Other Council discussion was in regard to details of Financial Strategies LLC. The limited liability aspect of the entity protects the tribes from any potential liability, as the LLC itself would be the only recourse, said tribal attorney Ellen Grover.
Financial Strategies would be managed by a management committee comprised of the Secretary-Treasurer, the director of tribal Finance, and an individual tribal member appointed by Council.
The management committee will be in charge of direct approval of any loans that comply with the purpose of the LLC. The committee will provide an annual budget report to the tribes.