Tribe gets into tobacco business

BARAGA — The Keweenaw Bay Indian Community Tobacco Company (KBICTC) soon will be putting its permit to manufacture tobacco into effect after receiving approval Nov. 27 from the federal Tax and Trade Bureau.

According to Jennifer Misegan, vice president of the Tribal Council, KBIC started even before the application to gain the permit to manufacture tobacco was filed at the end of March.

The process involved the initial evaluation involving background checks of the board members, a comprehensive interview with the Tribal Council and a site visit with a field investigator who examined equipment and operation site.

KBICTC will be partnering with Allegany Capital Enterprises (ACE), a subsidiary of Seneca Manufacturing, which has been in the tobacco manufacturing business for more than 20 years.

The tribe’s interest in manufacturing tobacco stems from an interest in economic advances.

“We saw it as an economic development opportunity for the tribe,” Misegan said.

The KBIC’s past relationship with Seneca, with its expertise in manufacturing tobacco products made this an easy choice in partnership, she said.

“We have a good working relationship with Seneca, and they have knowledge and expertise on cigarette manufacturing,” said Misegan.

The goal of tobacco product manufacturing has been a long-term project for KBIC, which began in 2011 with the initial purchase of equipment.

“The equipment has been sitting there for several years, because we could not use it without a permit,” Misegan said.

According to Misegan, timing is everything. The permit approval made it the right time to partner with Seneca, move forward with the facility and finally put the equipment to use.

The KBIC’s November newsletter states, “The startup costs for the KBICTC were the donation of the machine from the tribe, a $100,000 gift approved by the tribe to the company, and there is a loan of $375,000 that the tribe granted to the new tobacco company.”

The facility is located in the KBIC’s industrial park at the Tubcraft building. The machines are installed and ready to go.

The facility has two parts. One side will house where the actual cigarettes will be made, and the other section will store them until sold.

Misegan says they are currently finalizing contracts while taking their time get supplies, equipment, and packaging in order.

“We anticipate everything to start in about eight weeks,” said Misegan.