Dana Ferguson, and Mark Walker

Argus Leader

FLANDREAU — Two leaders of a Colorado-based marijuana growing company face felony charges in connection with their efforts to help a South Dakota Native American tribe grow its own crop, the state's top prosecutor announced Wednesday.

While the Flandreau Santee Sioux Tribe asked Monarch America, Inc. to help start a proposed marijuana lounge on reservation land, South Dakota Attorney General Marty Jackley said non-tribal members have no authority to possess or conspire to grow cannabis in the state.

Jackley, in a press conference in a Moody County courtroom, walked a delicate line in alleging Eric Hagen and Jonathan Hunt violated state and federal law, while maintaining that tribal members weren't at fault in the exchange. Instead, he said, the tribe was made a victim by the pair.

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Law enforcement officers at the meeting tried to paint a clear picture that marijuana growth, use or distribution wouldn't be advised, even by tribal members on lands governed by sovereign tribes, and wouldn't be permitted on non-reservation territories.

Jackley presented the charges to a courtroom full of community members and reporters. He said state investigations found that Hagen and Hunt bought marijuana seeds of 55 strains from the Netherlands, which they had sent packaged in CD cases and sewn into T-shirts. Court documents show that the pair along with other Monarch employees began growth of approximately 600 plants in the Flandreau facility.

Material for remodeling the facility, which was on tribal grounds, was ordered by Hunt and a contractor was hired. Some of Hunt’s expenses were submitted for reimbursement to Hagen at Monarch America, court records show.

While the Flandreau tribe maintained that non-tribal members would be subject to tribal ordinance while on tribal ground, Jackley said that wasn't the case.

“What I’ve always said is that there needs to be respect in South Dakota for federal law, state law and tribal sovereignty,” Jackley said. “In relation to the tribal ordinances that were passed, the tribe has jurisdiction over enrolled members of a federally recognized tribe.”

A Moody County jury indicted Hagen, 34, on one count each of possession of more than 10 pounds of marijuana, conspiracy to possess more than 10 pounds of marijuana and attempted possession of more than 10 pounds of marijuana. Hagen was president and CEO of Monarch America, Inc.

A $10,000 cash or surety warrant has been issued for Hagen's arrest.

Jonathan Hunt, 43, of Colorado has been charged with conspiracy to possess marijuana. He is expected to plead guilty to one count of conspiracy to possess more than one-half pound, but less than one pound of marijuana. He faces a maximum of two years in prison. Hunt was vice president of Monarch America.

Hagen and Hunt declined to comment on the charges.

Jackley said he wouldn't bring charges against tribal members for their involvement in the grow operation and asked for their cooperation in turning over to law enforcement remaining marijuana seeds.

“I wouldn’t personally go meet with somebody that I anticipate indicting and so, I’m openly indicating my desire to meet with tribal authorities," Jackley said. "To some degree the tribe has become a victim in this instance."

PHOTOS: See a tour of the tribe's now shuttered marijuana growing facility.

Moody County State's Attorney Paul Lewis delivered a different message, though. While Jackley said the state couldn't control tribal members' decisions as far as using marijuana on reservation territory, Lewis said the tribe should listen to the message presented with the charges.

“This is not an indictment against the members of the Flandreau Santee Sioux Tribe,” Lewis said. “This indictment this morning is a clarion call from the people of the state of South Dakota to the executive council of Flandreau Santee Sioux Tribe to reconsider their efforts towards moving forward with an adult playground for marijuana ingestion and consumption."

Tribal Attorney Seth Pearman didn't immediately respond to requests for comment Wednesday.

The tribe announced last year that it intended to open a marijuana lounge that would have allowed visitors to use cannabis on reservation land. After a standoff with Jackley, tribal officials decided to burn its existing crops in November.

Lael Echo-Hawk, a Washington DC-based attorney and general counsel for the National Indian Cannabis Coalition, said the news would likely have a chilling effect on tribes entering into similar ventures with marijuana growing groups. Echo-Hawk said South Dakota tribes would likely struggle to develop successful marijuana growth or distribution facilities unless state or federal law changed.

She offered advice to tribes and partners looking at similar endeavors.

"Be careful, be deliberate and know who your partners are," she said. "And for partners, make sure you have good legal counsel. You need someone to lead you through the legal quagmire out there."

Follow Dana Ferguson and Mark Walker on Twitter @bydanaferguson and @ArgusMWalker