Derek Dorr thought the Mille Lacs Band of Ojibwe could lose millions in federal contracts and break the law if the tribe got into the marijuana business, and said he brought his concerns to tribal leaders and the U.S. State Department last fall.
Fired Mille Lacs executive who blew whistle on tribe’s marijuana plans sues
Derek Dorr, who oversaw the tribe’s federal contract business, alleges reprisal in a federal lawsuit and seeks potentially millions.
The Minnesota Star Tribune
June 25, 2024 at 10:37PM
Dorr was promptly fired as CEO of tribal-owned Makwa, which handles contracts with the State Department and other government agencies, according to a federal lawsuit filed this week.
“The timing of his discharge was not a coincidence — it was a reprisal,” the suit alleges. “Cannabis remains a prohibited substance under federal law, and Makwa is a company in the business of federal government contracting.”
Dorr is seeking potentially millions of dollars in damages and lost compensation.
A lawyer for Makwa, Molly Ryan, said the company denies the claims and will “vigorously defend the allegations of the lawsuit.”
Several Minnesota tribes have started growing or selling marijuana since the state legalized recreational cannabis last year. Mille Lacs Corporate Ventures (MLCV) is building a 50,000-square-foot cannabis growing facility near Grand Casino Mille Lacs in Onamia and has plans to build more in the future.
The tribe-owned company’s executive said this spring he sees a potentially $100 million opportunity in cannabis.
Tribes have sovereignty to set their own rules around cannabis, but they are still subject to federal law — as are states that have legalized marijuana. However, a lack of federal enforcement guidelines keeps the industry in legal “limbo,” lawmakers wrote earlier this year.
Dorr, who founded Makwa in 2019, said by the time he learned of the band’s cannabis plans, he believed MLCV “had already violated federal law, impacting Makwa’s [compliance] and federal contracts in the process,” according to the lawsuit. MLCV is the parent company of Makwa.
“For the majority of Makwa’s customer base, contracting with Makwa while MLCV was engaged in the cannabis industry would be out of the question,” the lawsuit says, since many of Makwa’s customers are involved in national security.
When Dorr spoke with an official at the State Department on Oct. 11, “the deputy director’s reaction to the possibility of Makwa’s proceeds supporting the development of a cannabis business was extremely negative,” according to the lawsuit.
Dorr was fired Oct. 26, and he declined a severance agreement, according to court filings. His 10-year contract allowed Makwa to fire him with or without cause.
Dorr later filed a complaint with a federal agency and sought a $12 million settlement the company rejected.
“Makwa has not engaged or invested in cannabis-related businesses,” Nicole Truso, an attorney for the company, wrote in a letter in January regarding the proposed settlement. “Mr. Dorr’s fixation on the legality of marijuana at a federal level is misplaced and nonsensical.”
The Small Business Administration’s Office of Inspector General has taken no action on Dorr’s complaint.
With a lottery looming, a local pot attorney says litigation is “the only course left” for some clients who were turned away from a shot at Minnesota’s social equity program.
