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This story is part of our series on Native economic development, "Beyond the Bet."

Hoping to boost his tribe’s economy beyond gambling some 15 years ago, former Tribal Council member Earl Pendleton went searching for a project that could bring jobs and investment to benefit the entire Lower Sioux Indian Community.

Scrolling through YouTube videos, he saw people building homes with hempcrete, an insulation made from the woody inner core of the hemp plant. It seemed like a perfect match — a sustainable economic model rooted in the earth. 

Native American farmers would grow hemp; the crop would be processed into hempcrete on the reservation. Native crews would build needed homes insulated with hempcrete.

“Earl always had this vision of having a full circular economy, a fully integrated business,” said Danny Desjarlais, who runs what’s now the Lower Sioux’s hempcrete business in rural southwestern Minnesota.

Pendleton’s vision took root in 2017 when the tribe signed on to a 

, an opportunity made possible only after 

Congress legalized industrial hemp for research purposes

. The operation is now part of a quiet, national surge in Native-owned startups, although steep challenges remain to keep the business growing.

“We’re kind of biting off quite a bit here and trying to do it all,” Desjarlais said as he showed me around the operation recently. “We’ve scraped our knees a few times and we’re learning along the way as well.”

The odds don't seem to faze him. He’s enthusiastic about the sustainability and health benefits that spring from using hempcrete in building homes and other structures on the reservation and elsewhere. He's building a home for his family using hempcrete.

Type “hempcrete” into YouTube and you'll land on plenty of explanatory and enthusiastic videos — mostly from Europe and Australia — lauding the building material. 

Hempcrete mixes the core of the hemp plant with a lime-based binder and water to make a concrete-like material. While it’s not load-supporting, it makes for exceptionally good thermal insulation, with energy bill savings anywhere from 30 to 70 percent.

Hempcrete is long-lasting, carbon negative, 100 percent recyclable and it eliminates the need for using traditional insulating products made from petrochemicals and plastics. 

Perhaps most impressive, hempcrete is mold resistant, pest resistant, and fire resistant, the three major risks to buildings.

“I came into this conventional builder, and my eyes have been opened, and now there’s no way I could go back and build that same way and expect my community members to live in those toxic materials,” Desjarlais said. 

“We always talk about thinking seven generations ahead, and that’s what we're really doing here with these homes.”

It made perfect sense for the Lower Sioux Community. It was an entrepreneurial opportunity but also a way to improve the community's housing stock. The reservation has roughly 160 existing homes and, according to federal housing data, needs 200 more.

The Lower Sioux Indian Community’s hempcrete operation is part of a larger resurgence in Native American entrepreneurship. There are more than 400,000 Native-owned businesses in the United States, up 36 percent since 2012, according to the U.S. Small Business Administration. 

While the growth in tribal-owned casinos is widely recognized, Indigenous entrepreneurs are finding success in a wide variety of businesses, including telecommunications, agriculture, construction, and the arts. The push for economic diversification is strong.

“If you go around to any Native conference, or you sit in any tribal council chambers, I think you hear the word diversity constantly, or diversity of their economic outlays,” said Casey Lozar, director of the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis. “It's a really important thing.”

While the gains in entrepreneurship are impressive, Native startups have long dealt with steep barriers to success, including high rates of reservation poverty, limited access to capital, negative racial stereotypes and, in many cases, geographic isolation.

Despite the recent rapid growth, Native American businesses account for just over 1 percent of firms in the U.S. 

Most entrepreneurs fund their startups through accumulated family wealth, a second mortgage against home equity, or a signature loan backed by strong credit, but those paths are largely closed to Native entrepreneurs, said Robert Miller, a law professor at Arizona State University who studies Native entrepreneurship.

Reservation land, he added, is often held in federal trust, which makes it difficult to mortgage; poverty limits savings; and thin credit histories keep banks wary.

Results from a recent survey by the Federal Reserve Bank of Minneapolis's Center for Indian Country Development bear that out. The survey found that 45 percent of Native-owned small businesses seeking financing received none, compared with 36 percent of non-Native businesses. 

The same survey showed Native-owned firms are, on average, located farther from banks and credit unions than businesses elsewhere in the country.

Those headwinds are visible up close with the hempcrete business. Like all ambitious startups, though, Desjarlais has found the gap between lofty business aspirations and gritty reality is a struggle. 

For instance, the operation’s 10,000 square foot hemp warehouse is half its planned size. The processing equipment isn't big enough to bring hempcrete to scale. Dejarlais and his five-member crew have built only a handful of homes. The tribal council wants him to find outside funding.

The business has made headway on the policy front. Last year, Desjarlais and his colleagues led a broad coalition that successfully petitioned Minnesota's Department of Labor and Industry to move hempcrete toward formal inclusion in the state building code. 

There has been funding too. The federal Environmental Protection Agency awarded the tribe a five-year, $5 million grant for weatherization and hempcrete construction, and the Minneapolis-based McKnight Foundation provided seed money to outfit the construction crew with a forklift and proper safety equipment.

Tribal governments aren’t required to disclose revenue from their casino operations (and rough estimates from third party business are just that–rough), the tribe’s casino — Jackpot Junction in Morton, Minn., — is the Lower Sioux Indian Community’s chief source of revenue. Like other tribes, though, the concern is to reduce the community’s reliance on casino dollars and build a more diversified economic model.

Passionate about getting the hempcrete word out and growing the business to benefit his neighbors living on the Lower Sioux Indian Community reservation, Dejarlais has also started a nonprofit called the Green Buffalo Institute.

“It's basically geared to trying to educate others, especially tribal communities, about these materials and how to use it and why they should be using it,” he said. “Hopefully more people will have us out to do their workshops or have us out to do a building.”

Each house they work on helps prove the concept.

Near the government center on the reservation stands a remodeled home Desjarlais thinks is more than 100 years old, the oldest on the reservation. He and his crew completely gutted the house. 

The walls are now insulated with hempcrete, and the exterior of the two-bedroom home is striking, dark and clean-lined.

“It was a complete overhaul,” he said. “It’s the first one that we ever did like that. And I think it's only the second in the country to be a complete retrofit.”

The appeal of hempcrete isn't limited to the reservation. 

Desjarlais's crew recently built a home for two Mayo Clinic physicians who discovered hempcrete in the same way as Pendleton, the tribal leader — scrolling through YouTube. 

The doctors researched the material extensively before choosing it for what they call their “forever home,” telling Desjarlais they couldn't find anything healthier to build with. For him, the moment confirmed something he'd already come to believe. "When people find out about it," he said, "it kind of chooses them."

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Hoping to diversify its economy beyond gambling, the Lower Sioux Indian Community has put its chips on hempcrete, a sustainable housing insulation. The operation is part of a quiet, national surge in Native-owned startups. But steep challenges remain.

Hemp builds houses, economy and opportunity in one Minnesota tribal community

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