The small town of Flandreau, South Dakota, stepped into the national spotlight this week when the two-year standoff between the Flandreau Santee Sioux tribe and South Dakota Attorney General Marty Jackley finally made it to a Moody County courtroom, where Eric Hagen, a Colorado-based cannabis consultant, faces up to 15 years in prison for advising the tribe on an ill-fated cannabis development.
'Law enforcement was invited in. There were no secrets.'
Hagen is charged with three felony counts pertaining to his work in 2015 on a proposed cannabis grow facility and consumption lounge on the reservation land of the Flandreau Santee Sioux tribe. (Leafly published this feature about the controversial project in late 2015.)
The trial has drawn national attention because of its potential implications for tribal sovereignty, and the precedent it could set for cannabis consultants working on projects in Indian Country.
Hagen was charged with three cannabis-related felonies almost nine months after the Flandreau Santee Sioux tribe destroyed its crop.
The state lacks the authority to try members of the tribe for acts done on the reservation, so the state brought charges against Hagen, who is not a tribe member. Prosecutors have accused him of possession, conspiracy to possess, and attempted possession of more than 10 pounds of marijuana. If convicted, Hagen could face up to 15 years in state prison.
Hagen’s case kicked off on Friday morning in a cramped county courtroom just a mile away from the failed event center and adjacent grow operation. And it was that grow facility, along with Hagen’s alleged role within the operation, that the prosecution attempted to lay out on day one of proceedings.
Prosecution: Hagen as Mastermind
The prosecution’s opening statement was delivered by state attorney Katie Mallery, who attempted to paint a picture of Hagen as the mastermind of the cannabis grow/resort venture. Mallery put forth the theory that it was Hagen and Jonathan Hunt (the vice president of Monarch America who accepted a plea deal in the case) who controlled and ran the operation. Mallery portrayed Hagen as a hands-on participant who ramrodded a cannabis project onto the land of, and at the expense of, the Flandreau Santee Sioux tribe.
Defense attorney Mike Butler countered in his opening statement: Hagen’s transparency and cooperation throughout the venture, Butler argued, proved that Hagen was nothing more than a cooperating consultant on a project covered by tribal sovereignty.
“The evidence will show this would have had to be the most transparent conspiracy ever, if it was that,” Butler said. “Law enforcement was invited in by Mr. Hunt, by Mr. Hagen. They”—meaning law enforcement officials—“declined. This thing was laid out on a platter, what was being done on tribal land, in a tribal building. There were no secrets.”
The prosecution’s story started to come apart with the first witness.
Defense: Hagen Invited the Authorities In
The state called Sam Kavanagh, a South Dakota Department of Criminal Investigation case officer. He gave background information on the investigation, and revealed what knowledge the state had regarding the proposed cannabis grow operation. Mallery continued for the prosecution, but immediately changed course on a crucial detail with Kavanagh on the stand.
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Showing you dispensaries nearIn her opening statement to the jury, Mallery said that law enforcement officials made a visit to the grow facility in October of 2015, where they “found” Hagen and Hunt, before meeting with the pair at a location outside of the facility. Yet in the defense’s opening statement, Butler said Hagen was not present that day, and that his client traveled to South Dakota the next day to meet with authorities.
As part of his testimony, Kavanagh told Mallery that Hagen, another DCI agent, and a pair of FBI agents traveled to Flandreau on October 14, but confirmed Butler’s assertion that Hagen showed up at the facility on the following day to try and meet with authorities.
Cops Didn’t Want to Visit
On cross examination, Kavanagh went on to explain that the law enforcement officials did not want to tour the facility, or appear on video at the facility, for fear of creating a public perception that law enforcement was cooperating with the project. When asked by Butler how the public would know about the visit, or why a visit would suggest law enforcement was cooperating, Kavanagh said he did not know.
Butler continued to press Kavanagh. The defense attorney asked Kavanagh if it was usual law enforcement practice to turn down an invitation to see evidence. Kavanagh said no. Butler also asked Kavanagh about attempts to get a search warrant for the tribal facility’s surveillance footage. Kavanagh said the DCI and FBI did not seek out the footage because they did not want to “tip their hand” about a potential raid.
No Ask for Security Footage
Even after the crop was destroyed, Kavanagh indicated that there was no attempt made to obtain the security footage from the grow facility.
“I don’t know why we didn’t grab (the footage),” said Kavanaugh.
“You didn’t even ask?” replied Butler.
“No.”
When asked by the prosecution about not seeking search warrants, Kavanagh said his agency didn’t need footage, due to Jonathan Hunt’s cooperation in the case. That came after Butler asked about the investigation into the communication between Hagen and Hunt, with Kavanagh indicating that law enforcement did not seek the e-mail and text messages exchanged between the Monarch America executives.
One text message exchange that was on display involved the other witness called by the state. Cory Johnsen was Monarch’s marketing consultant in South Dakota. He took the stand Friday as a non-indicted co-conspirator. Johnsen, who was testifying under the protection of a use-immunity agreement, explained his role in the promotion of the Flandreau cannabis project. He walked the jury through a text message exchange about purchasing plumbing parts for the facility.
Speedy Trial
Johnsen told jurors that he organized, created promotional material for, and eventually hosted a cannabis seminar on tribal lands. He also discussed his early inquiries into a potential shuttle service between the proposed resort and the city of Sioux Falls, which is located 50 miles south of the tribe’s casino and planned event center on the reservation next to Flandreau.
With the case moving quicker than expected, proceedings were halted after Johnsen was excused from the witness stand, and the court adjourned for the weekend.
The state’s case will resume on Monday morning, when the jury is expected to hear the testimony of Hagen’s Monarch America business partner, Jonathan Hunt. Hunt accepted a plea agreement in exchange for his testimony about the operation. Tribal leaders and other law enforcement officials are also expected to take the witness stand in the coming days.
