A South Dakota jury on Wednesday cleared a consultant of drug charges after he helped an American Indian tribe grow marijuana for a pot resort that the tribe once hoped would include a nightclub, an outdoor music venue and bring in millions of dollars.
Eric Hagen, a 34-year-old consultant who worked with the Flandreau Santee Sioux Tribe, had faced charges of conspiracy to possess, possession by aiding and abetting and attempted possession of more than 10 pounds of marijuana. The plan for a resort north of Sioux Falls was ultimately abandoned.
The jury took only a couple of hours to find Hagen, of Sioux Falls, not guilty in state court. He had faced 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.
The verdict was a setback for state Attorney General Marty Jackley, who opposed the tribe’s project from the start. Jackley, a Republican running for governor next year, said in a statement that he respected the jury’s decision on Hagen’s role.
“I do continue to urge our South Dakota tribes to make their own determination that marijuana grows of this nature can affect the public health and safety on their reservations and across our state,” Jackley said.
Afterward, Hagen said the prosecution had damaged Monarch America, the consulting company for which he serves as president and CEO that helped the Santee Sioux. He said Jackley’s prosecution was spurred by politics.
“He tanked our company by spreading lies and rumors, and it’s upsetting,” Hagen said. “This was simply a media ploy for Marty because he’s running for governor in 2018.”
When the Santee Sioux announced their plan for the marijuana resort in 2015, it set the stage for a collision between the tribe’s hopes for economic development and state and federal law. Flandreau President Anthony Reider said Wednesday that the tribe had proceeded with caution and transparency.
“From the start, we did not want to see anybody get in trouble with this project,” he said.
Their push came after the Justice Department, asked in 2014 to clarify whether they would enforce marijuana laws on tribal land as states such as Colorado and Washington were legalizing the drug, appeared to clear the way for tribes to do the same.
But the same 2014 Justice memo also reserved the right to enforce federal law that still says marijuana is illegal, and when federal officials signaled a potential raid, the tribe burned its crop. 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.
Marijuana isn’t legal in the state of South Dakota, though the tribe legalized it in on Santee Sioux land in 2015. Hagen and fellow consultant Jonathan Hunt, with Colorado-based Monarch America, were charged last year after helping the tribe. Hunt pleaded guilty to a drug conspiracy count after agreeing to cooperate with law enforcement.
Authorities have said that Hunt and others cultivated the plants at the Flandreau grow facility before hundreds of plants were burned. Assistant Attorney General Bridget Mayer told jurors that Hagen aided and abetted Hunt in possessing more than 10 pounds of marijuana.
Hagen’s defense argued that the marijuana belonged to the tribe, not to him.
“That marijuana was the property of the Santee Sioux tribe,” defense attorney Mike Butler said. “They undertook to build this facility, to legalize it on their reservation, they sought to do so under a Justice Department guideline for Native American tribes.”
When tribal leaders initially touted their plan to open the resort on tribal land, 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 the Santee Sioux have discussed the possibility of growing marijuana again, but said they’re waiting for more clarity at the federal level.
“We don’t want a repeat of what happened,” he said.