Tribal Pot Consultants Criminally Charged

     FLANDREAU, S.D. (CN) — South Dakota criminally charged two employees of a Colorado-based consulting firm Wednesday for their role in attempting to launch a marijuana resort on Santee Sioux land.
     Matthew Hagen, of South Dakota, and Jonathan Hunt, of Colorado, are president and vice president of Monarch America, a consulting firm specializing in managing cannabis dispensaries.
     Two weeks after the Santee Sioux’s tribal leadership voted to legalize marijuana on the Flandreau Indian Reservation, in June 2015, the tribe contacted Hagen and Hunt for help setting up a marijuana “resort” that would include a marijuana growing facility, dispensary and nightclub.
     By October, Hagen and Hunt had overseen construction of an indoor growing facility and had begun cultivating hundreds of marijuana plants, and a nearby bowling alley was renovated as a dispensary and nightclub.
     On Wednesday, a Moody County grand jury indicted Hagen on charges of conspiracy to possess more than 10 pounds of marijuana, possession of more than 10 pounds of marijuana, and attempted possession of more than 10 pounds of marijuana. Hunt faces charges of conspiracy to possess one-half pound of marijuana.
     According to the criminal affidavit, Hunt ordered marijuana seeds from a company in the Netherlands. The seeds arrived at tribal offices “surreptitiously concealed in CD cases or sewn into T-shirts.”
     In exchange for Monarch America’s management, the Santee Sioux Tribe made a $600,000, one-time investment in the company, making the tribe its largest stockholder, the affidavit states.
     Monarch America was to receive a percentage of the net sales.
     Santee Sioux President Anthony Reider told South Dakota lawmakers and press invited to tour the facility in October 2015 that he expected it to generate $2 million a month for the tribe.
     But the facility never opened. In November 2015, the tribe burned its marijuana crop in response to rumors of a federal raid. But the criminal indictment says the tribal council still possesses two “backup” seeds for every strain of marijuana destroyed in the burn.
     The Associated Press reported Wednesday that the tribe does not plan to renew the proposed pot operation but will use the facility to cultivate tomatoes and vegetables.
     Although marijuana is illegal in South Dakota, the U.S. Department of Justice released a memo in December 2014 instructing law enforcement to focus on eight aspects of prosecuting marijuana crimes in Indian Country. These include keeping the drug out of children’s hands, not using it as a cover for trafficking other drugs, and not selling it to states where it is illegal.
     Some felt this opened the door for tribes to legalize marijuana on the reservation so long as they abided by these prohibitions. But tribes have remained cautious, and the Santee Sioux Tribe is one of only a handful of tribes nationwide that has legalized pot on the reservation.
     By contrast, half of the 50 states, plus the District of Columbia, have legalized marijuana in some form, according to
     If convicted, Hunt faces up to two years in prison or a $4,000 fine, while Hagen could be fined $65,000 and spend more than 25 years behind bars.
     No members of the Santee Sioux Tribe have been criminally charged.
     Neither Hunt nor the Attorney General’s Office responded to voice mail or email requests for comment Wednesday night.

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