'Marijuana resort' plan ends with Native American consultant on trial
PIERRE, S.D. (AP) — Roughly two years after an American Indian tribe began an ambitious push to open the nation's first marijuana resort in South Dakota, a consultant who helped pursue the stalled venture is heading to trial on drug charges.
Jury selection starts Thursday in the case of Eric Hagen, a consultant who worked with the Flandreau Santee Sioux Tribe on its operation about 45 miles north of Sioux Falls. Hagen was indicted on state marijuana charges months after the tribe destroyed their crop amid fears of a federal raid.
[related_articles location="left" show_article_date="false" article_type="automatic-primary-section" curated_ids=""]Here's a look at key information about the trial:
Hagen and fellow consultant Jonathan Hunt, officials with Monarch America, a Colorado-based company in the marijuana industry, were charged last year after assisting the tribe.
The Santee Sioux began a marijuana growing operation after the Justice Department outlined a new policy clearing the way for Indian tribes to grow and sell marijuana under the same conditions as some states that have legalized pot.
State Attorney General Marty Jackley warned against the idea from the outset. The tribe ultimately destroyed its crop in November 2015 after federal officials signaled a potential raid.
In this 2015 file photo, Eric Hagen talks about marijuana in Sioux Falls, S.D. Roughly two years after an American Indian tribe began an ambitious push to open the nation's first marijuana resort in South Dakota, Hagen, a consultant who helped pursue the stalled venture, is heading to trial on drug charges. (Emily Spartz Weerheim/The Argus Leader via AP, File)
Jackley announced charges against Hagen and Hunt about nine months later. Hagen, 34, of Sioux Falls, has pleaded not guilty to charges of conspiracy to possess, possession and attempted possession of more than 10 pounds of marijuana.
He faces a maximum penalty of 10 years in prison on both the conspiracy and possession counts and 7 1/2 years on the attempted possession count. Hunt last year pleaded guilty to a drug conspiracy count after agreeing to cooperate with law enforcement.
Court documents say Hunt ordered marijuana seeds from a company in the Netherlands that were shipped surreptitiously to the tribe's office in 2015. Authorities say he and others cultivated the plants at the Flandreau grow facility before they were burned.
The state doesn't have jurisdiction over the tribe. But prosecutors argue that state courts have jurisdiction over non-Native Americans who commit "victimless" crimes in Indian Country, so Hagen can be prosecuted. Hagen's defense has argued that the federal government has jurisdiction.
Hagen's defense against the indictment is that the marijuana belonged to the tribe. Mike Butler, Hagen's attorney, said Jackley doesn't have jurisdiction to charge the tribe, so perhaps the prosecution is "an offshoot of his frustration that he couldn't impose his will on the tribe."
"The tribe voted to enact a law. The tribe paid for this stuff. The tribe ultimately voted to burn it. Not my client," Butler said. "It was the tribe's exclusive possession in this case."
Butler said law enforcement was fully informed and involved from the beginning of the venture. He pledged to appeal if Hagen is convicted.
"This is a one-of-a-kind prosecution," said Tim Purdon, a former U.S. attorney for North Dakota. "That doesn't mean it's a bad one. It's just, this is truly groundbreaking."
When tribal leaders initially touted their plan to open the resort on tribal land in Flandreau, President Anthony Reider said they wanted it to be "an adult playground."
They projected as much as $2 million in monthly profits, with ambitious plans that included a smoking lounge with a nightclub, bar and food service, and eventually an outdoor music venue. They planned to use the money for community services and to provide income to tribal members.
Reider said after the marijuana was burned that federal officials had concerns about whether the tribe could sell marijuana to non-Indians, along with the origin of the seeds used for its crop.
Purdon, now a partner at the Minneapolis law firm Robins Kaplan, said that if Hagen is convicted, it would put a "huge chill on non-Native consultants working with tribes who are interested in exploring medical or adult use cannabis."
Reider this week called the prosecutions of Hagen and Hunt "very unfortunate," saying that the tribe originally reached out to Monarch America about the project.
He said the Santee Sioux have looked into the possibility of growing marijuana again, but said they're waiting for more clarity at the federal level with President Donald Trump's new administration.
The grow facility hasn't been used since the marijuana crop was burned, Reider said.
"It's unfortunate that we were unable to be successful with the project," he said. "We were hoping with the revenues to do a lot of positive things for the tribe and the local community."
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