TILT Holdings CEO Gary Santo (left) and Little Beach Harvest managing director Chenae Bullock at the Little Beach Harvest building site on Shinnecock Indian Nation Territory, in Southampton, New York. Photo © Sam C. Long, Honeysuckle Media, 2022.
When TILT Holdings and the Shinnecock Indian Nation finalized a partnership that would establish an adult-use cannabis enterprise on tribal territory on the eastern end of Long Island, New York, they were doing something truly unprecedented in the cannabis world.
Unlike many social equity partnerships where a multi-state operator provides funding and other considerations in exchange for a percentage of the business — or, in some cases, an option to acquire the entire brand at a later date — TILT has no such assurances.
The partnership will launch Little Beach Harvest, a wholly owned subsidiary of Shinnecock Nation, while TILT will only collect fees for services rendered per their management services agreement.
“This is an opportunity to show that not all corporate cannabis is bad,” says TILT CEO Gary Santo.
From left to right: Sunshine Gumbs, Celeste Inez, Chenae Bullock and Shinnecock Nation
Tribal Chairman Bryan Polite. Photo courtesy TILT Holdings.
Breaking Ground
While the phrase “social equity” has become synonymous with the modern cannabis movement and efforts to legalize cannabis across the United States, the partnership between TILT and Shinnecock Nation takes that concept to a higher level of social responsibility.
One of the key responsibilities for TILT is having the cultural sensitivity that is often overlooked by private businesses working with tribes, says Chenae Bullock, the managing director of Little Beach Harvest.
“Our tribal identity is kind of in the center of it all,” Bullock adds. “They put that first and that’s important to realize.”
The Little Beach Harvest project actually began in 2016, but the real momentum started when TILT came on board in 2021. The company broke ground on its 5,000-square-foot dispensary in Southampton on July 11, 2022 — a process that included the oversight of a cultural resource monitor, who ensures that the build sites are not culturally sensitive areas and that other critical considerations are followed.
“It’s an amazing design,” Santo says of the dispensary layout. “It’s not just going to be a box where people can buy cannabis. We are an integral part of the community.”
He says the design by T-Arch Studios calls for extensive use of glass and natural woods.
“They’re trying to stick with things that look native to the land,” he says. “Everything about the brand and the concept is to really bring people back to one with the land. It’s going to be more of a typical consumer experience, where it’s not just going up to a counter and talking to a budtender or getting an iPad thrown in your face. It’s designed to be a lot more interactive, a lot more educational, a very warm and inviting space.”
The retail store is expected to open for business in the first quarter of 2023, followed by the groundbreaking on its cultivation and manufacturing facility later in the year. Santo expects Little Beach Harvest will provide jobs to at least 100 members of Shinnecock Nation, plus additional positions involved in initial training and management as the company gets up and running, creating a sustainable environment that fosters economic growth within Shinnecock for generations to come.
One of the challenges for Bullock is looking at the big picture and the long-term sustainability of Little Beach Harvest.
“I have to think about what is best for the nation,” she says. “It’s not about what’s best for me, or for the business, or for the partnership. And it’s not always about what’s best right now because a decision needs to be made. I have to ask, ‘What is the best solution for the nation?’”
A rendering of the exterior of the Little Beach Dispensary. Courtesy T-Arch Studios.
Perfect Partnership
Around the time New York passed its legislation to legalize adult-use cannabis, Gary Santo was talking with an investor and made a comment about how he’d like TILT Holdings to break into the Empire State market.
TILT is a multi-state operator with investments in both the plant-touching and ancillary sectors of the industry, but it’s on the smaller side of MSOs compared to the giant enterprises investing tens of millions, if not hundreds of millions of dollars, to gain a foothold as one of the 10 medical licensees in New York. Santo wanted a way to enter the New York market in a meaningful way, without needing a massive outlay in capital. That’s when he was introduced to Conor Green Tribal Economic Development, which was acting as an advisor to the Shinnecock Nation and helping build out a cannabis program.
Through Conor Green, Santo met with Shinnecock elders and leaders, including Chenae Bullock, and began developing the structure for a partnership both parties see as beneficial for the long run.
“We’ve been burned by so many different partnerships over the years,” Bullock says. “It’s left a bad taste in the mouths of a lot of people when it comes to joint partnerships, but this just seemed like the perfect match.”
Santo was immediately interested in working with the Shinnecock Nation because of the preparation that went into the tribe’s planning.
“We were just so impressed by how pragmatic they thought through everything,” he says. “They’ve chosen to take this more pragmatic path because they see the bigger picture and that’s rare to find in cannabis.”
By partnering with the tribe, TILT was able to avoid spending the exorbitant amount of money that many companies have had to spend in order to acquire a license in limited license states — before even investing anything in the facilities.
“Every dollar we’re spending right now is going into building the operation,” Santo says.
But overall, TILT is taking a more collaborative approach with Little Beach Harvest than the typical partnership in the cannabis space. Upon completion of the dispensary and production facility, TILT will not actually own a percentage of Little Beach Harvest.
TILT will provide funding, training and management consulting, and will earn its revenue through management services contracts.
“The risk we take is that we’re not going to own this at the end,” Santo explains. “There’s no magic clause that we can invoke to take ownership. We know that if we don’t hold up our end on the management side and provide the services we think we can provide, we shouldn’t be guaranteed anything.”
Key individuals with the Little Beach Harvest project celebrate the groundbreaking on July 11, 2022. Photo by Patrick Ryan / Hillpix
Bullock believes this model can become a template for future partnerships in a way that is mutually beneficial for all parties involved.
“They can actually show others in the industry how to respectfully do it and uphold that social responsibility,” she says.
Although TILT is technically a multi-state operator, Santo says the company is somewhat unique in that it is less focused on its own products and more focused on leveraging its infrastructure to help launch or expand independent brands, which it has done with brands such as Her Highness and Black Buddha. He estimates up to 50% of the brands TILT is affiliated with are from “underserved populations.”
“TILT is looking to partner and grow together with brands, not purchase or compete,” says Her Highness co-founder Allison Krongard. “Our relationship is perfectly complementary and symbiotic.”
“The partnership with TILT solved our supply issues and allowed accelerated expansion into new states,” adds Her Highness co-founder Laura Eisman. “As founders, we were able to focus on the art and fun of women creating products for women, for Allison and I to do what we do best — delight female customers.”
Roz McCarthy, the founder and CEO of Black Buddha, says partnering with TILT was key to turning her company into the Black woman-owned multi-state brand she envisioned.
“My connection with the TILT team has been exceptional,” she says. “I’m grateful to TILT Holdings for supporting and creating a space for Black-led brands and companies to thrive.”
A rendering of the interior of the Little Beach Dispensary, displaying the use of glass and natural wood that are cornerstones of the design. Courtesy T-Arch Studios.
Sovereign Land
According to Bullock, the Shinnecock tribe, as a sovereign nation, can operate Little Beach Harvest outside the limitations and requirements of New York State’s adult-use cannabis program.
“We don’t need a license, and we don’t seek out a license,” she says.
The retail shop and the production facility will both be located on the Shinnecocks’ traditional and sovereign land, which the tribe has held for hundreds, if not thousands, of years. It’s a point of pride and historical significance, as well as a functional benefit in certain circumstances.
“My people have been able to hold our land, in our care, forever,” Bullock says. “It’s never been taken from us. And the older I get, the more I understand that that becomes my responsibility as well, to make sure that we’re not chipping away at our sovereignty.”
While other American Indian tribes have established compacts with their state governments to operate cannabis businesses, those agreements haven’t always worked out well, Bullock says.
However, Santo says the question is how Little Beach Harvest can handle wholesale transactions with state-licensed companies.
“There’s nothing explicitly prohibiting anyone from selling product onto sovereign land or selling off, but there’s nothing to say we can,” he says. It’s unlikely that New York State operators would be willing to risk their license to do business with Little Beach Harvest unless we get clarity, he adds.
“The good news is I think the state is very receptive,” he says. “Obviously, you’re balancing a lot of different things — they’re trying to get their own adult-use program lined up — but it is a collaborative process.”
Either way, Bullock says it’s vastly important for the Shinnecock Nation to get Little Beach Harvest up and running. She says the “elephant in the room” is that Native Americans have the highest rate of opioid and drug abuse, but the tribe doesn’t have the resources, the proper support or the funding to create programs to help with the treatment of the opioid epidemic.
“For me, the benefits are two-fold,” she says. “The revenue that’s generated from this particular business alone is going to help create the treatment program that’s needed for my people. And it’s going to empower and inspire my people to create their own jobs.”