Shinnecock Indian Nation gets new partner for Little Beach Harvest cannabis dispensary

The Shinnecock Indian Nation announced a new development partner for its Little Beach Harvest on-reservation cannabis dispensary, after the former partner, TILT Holdings, expressed concerns about the New York market and “substantial doubt” about its own ability to remain an ongoing business.

TILT Holdings, which starting in 2021 helped fund the groundbreaking and construction of the nearly complete dispensary on sovereign tribal land in Southampton, on Tuesday announced it had sold its interest for $1.4 million to a subsidiary of PowerFund Holdings. Another Shinnecock development partner, Conor Green Consulting, continues to hold a minority stake, the companies said.

Tribal leaders and PowerFund said they expect Little Beach Harvest to open in the fall.

In a statement released Tuesday, the Shinnecock council of trustees thanked TILT for the year of progress since the 2022 groundbreaking and for “leading us through this journey.” They also said the PowerFund group would “bring us to the point of completion and official opening as the first tribally owned cannabis dispensary in Eastern Long Island on our sovereign land.”

PowerFund chief executive Sean Power, in a statement, said that the goals of the Shinnecock Nation and PowerFund are “perfectly aligned,” and that he’d work with subsidiaries to “support an ecosystem of Shinnecock-based cultivators and manufacturers.”

TILT last month reported a net loss of $26.9 million, compared with a prior-year loss of $7.1 million for the quarter ended June 30, on revenue that declined to $41.6 million from $47.1 million a years ago.

TILT in its quarterly report, citing a “history of losses and negative working capital,” said its management had concluded that there is a “substantial doubt about the company’s ability to continue as a going concern within 12 months after the date of this filing” on Aug. 14 after a primary supplier “significantly changed the payment terms” of a loan. “This was an unexpected event impacting short-term liquidity,” which led TILT to secure additional financing.

In the same filing, the company noted that it “may not be able to collect the full amount of its loan receivable” from the Little Beach Harvest partnership, which at June 30 stood at $5.1 million, while interest income on that loan had accrued to $198,000.

During a conference call with financial analysts, TILT’s newly named interim chief executive, Tim Conder, announced a series of strategic shifts that included a plan to review its partnership with the Shinnecock Nation, after an official noted “challenges” in the New York market, including “unlicensed operators selling cannabis on Shinnecock land.”

“The regulated adult-use cannabis market in New York state has experienced a number of hurdles during its delayed rollout,” Conder said during the conference, which was first reported by Green Market Report.

“Our partnership with the Shinnecock has been impacted by certain statewide challenges, including unlicensed operators selling cannabis on Shinnecock land and the inability to bring in or sell cannabis products across sovereign and New York state lines,” Conder said.

Bryan Polite, chairman of the Shinnecock council of trustees, said the tribe has been working to reign in unlicensed shops selling cannabis on the reservation, and has instituted a five-point plan to bring them into compliance. Doing so would benefit the tribe as it would require the shops to pay an approximately 4% tribal fee on sales. Polite also said that it’s not just the Shinnecock nation that is dealing with unlicensed shops. “It’s an issue for the entirety of New York State,” he noted.

Little Beach Harvest, a 100% tribally owned entity, was among the first tribal operations to be issued a license for adult-use cannabis sales.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.