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ALBANY — When state-regulated pot shops finally commence operation in New York, they will likely face vigorous competition from retail cannabis outlets to be run by the Oneida Indian Nation, owner of the sprawling Turning Stone casino complex in the Mohawk Valley.

Tribal officials announced Monday the Oneidas are getting into the cannabis business in a big way, with construction beginning in October on a 50,000 square foot growing and processing facility in the town of Verona.

The Oneidas said they will oversee the entire business from “seed to sale.” In addition to Turning Stone, the tribe runs a chain of a dozen convenience stores/gas stations that are popular with motorists traveling east or west along the upstate stretch of the state Thruway.

“The Oneidas are obviously a formidable business enterprise, and a highly successful one,” said Karl J. Sleight, an attorney with the firm of Lippes, Mathias, whose specialties include advising clients involved in New York’s emerging cannabis marketplace. “With this decision to get involved in this industry, they’re instantly a player.”

The Oneida Nation signaled that its pursuit of cannabis production and sales “is in furtherance of its commitment to diversify its economic base and create separate revenue streams to support its vital government programs and services for the Oneida people, such as health care, education, public safety, and cultural preservation.”

The expansion into the marijuana trade will also forge new employment opportunities for residents of the region, the tribe said.

It is also a reaffirmation of the Nation’s reinvestment efforts in the region and its commitment to creating new employment opportunities for its workforce and the community.

The cultivation and production ends of the business will be “highly regulated” by the Oneida Indian Nation Cannabis Commission, tribal officials said.

While that commission is separate and distinct from state cannabis regulators, the tribe noted it has been engaged in discussions about a joint inspection program with the state Office of Cannabis Management.

And though the tribe made it clear it sees significant money-making potential with marijuana sales, the Oneida Nation is showing less tolerance for pot use than current state law, which allows marijuana to be smoked in all places where tobacco products can be used.

“The consumption of cannabis will remain prohibited at Oneida Nation Enterprises venues, including at all of its casinos, hotels, restaurants, bars, and entertainment venues,” the tribe said in a statement.

While the Oneida Nation offered no hint as to how its cannabis products will be priced, the tribe, operating outside the regulatory framework created by the state, could seek to boost its market share by offering weed at lower prices than its non-tribal competitors.

It already does that with cigarettes and gasoline, noted Sleight.

Jesse Campoamor, who was the state’s chief negotiator for the Marijuana Reform and Taxation Act when he worked in the Cuomo administration, said tribal marijuana outlets will likely pose challenges for the state-licensed marijuana shops.

“Not only will they be competing against the legacy (underground) market, but now they’re competing against the tribal market potentially,” Campoamor said. “And that’s going to force the regulators to be very price conscious to begin with, and make sure that good quality product is present.”

Following the state’s move to legalize adult recreational use of marijuana in March 2021, the Seneca, Akwesasne Mohawk and Oneida Nation tribes have all now given the green light to the cannabis trade.

For state regulators striving to help newly-minted marijuana shops licensed by the state be profitable, the Oneidas will join the Cayuga, Seneca and the Akwesasne Mohawk nations in establishing, or at least allowing, legal marijuana businesses in the wake of the state’s 2021 legalization of weed for adult recreational use.

What will ultimately drive consumers to choose a particular outlet for their marijuana products, Campoamor said, are three factors: price, quality and knowing who is behind the product.

The cannabis supply for the state-regulated marketplace is expected to be “dramatically constrained for the first couple of years,” particularly for top-quality marijuana in flower form, he added.

The federally-recognized tribes in New York have sovereignty, giving them the ability to operate marijuana businesses that fall outside the scope of state regulators, as long as they are on tribal lands.

In Western New York, at least 15 cannabis shops authorized by the Seneca Nation have been operating for months in Salamanca.

The Oneida Indian Nation said it will collect taxes at the same level as the state, with the proceeds channeled into tribal programs such as housing, public safety, education and health care.

“The Nation has adopted a robust cannabis ordinance and regulations that impose governance standards that are comparable to those embodied in the New York State cannabis laws,” the tribe said. “These include comparable age restrictions and limitations on purchase amounts, employee licensure requirements, and assurances of product safety and quality.”

Meanwhile, state regulators have yet to issue any retail shop licenses for pot sales, though applications for the first wave of “social equity” licenses are being reviewed. Conditional licenses were issued to 242 growing operations, allowing a crop to be harvested this year so cannabis products produced in the state will be available to the New York shops once they open.

The Oneida Nation-authorized shops are expected to open by late 2023.

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