Squaxin tribe pursues new outlets for cigarette business

Tribe plans to raise production from 50,000 cartons monthly

By Lynda V. Mapes | The Seattle Times • Published May 15, 2007

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SQUAXIN ISLAND RESERVATION - It started as a tribal smoke shop in an old schoolhouse here 35 years ago. Two years ago, it grew into a cigarette factory, right on the reservation.

Now the 1,000 members of the Squaxin Island tribe are going big time: The People of the Water are taking on Big Tobacco.

The tribe decided a month ago to step up its cigarette-manufacturing operation of about 50,000 cartons a month, sold only on its reservation and through tribal smoke shops on other American Indian lands. Now the tribe, which has the capacity to manufacture up to 250,000 cartons a month, wants to go mainstream, even national, with its distribution.

Tribal leaders say they are keenly aware of the uncomfortable position they are in, selling a product that can kill. That's especially true in American Indian country, where the rate of smoking-related illness is 20 percent higher than in the rest of the United States.

But they also see an opportunity to better fund tribal programs and make more money for tribal members.

Economic development has been particularly challenging in American Indian country, said Brian Cladoosby, chairman of the Association of Washington Tribes. Because tribal land is held in trust by the federal government, it can't be mortgaged to raise capital, and private investors are often leery.

So tribes are working to establish new and expanded business ventures such as the Squaxins' tobacco company. And while they know they aren't going to take out the big guys, they want to take some of their shelf space in stores all over the country, and snag market share.

"The real business is to go after Philip Morris and RJ Reynolds," said Bob Whitener, CEO of Island Enterprises, the tribal government's business arm.

"We don't want to create a single new smoker. But we absolutely want to steal customers from those two manufacturers; we have no guilt about that. Who better than a government that puts the money into child care and police to do this? This isn't a private for-profit operation, it's a government operation."

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