Creating Distribution Group Error

Exchange 2013 SP1 in server 2012 hyper-v. I want to create a group so i can just enter that group name in an email and not everyone separately. So i go into the ecp and create a group. We have multiple domains in exchange and the group gets an email address that i need to change. So i do but when clicking save, i get this error:

WARNING: Couldn't update the primary SMTP address because this mailbox is configured
to use an email address policy. To disable the email address policy for this mailbox,
run the command with the EmailAddressPolicyEnabled parameter set to $false.

So i run:

[PS] C:\>Set-Mailbox <groupname> -EmailAddresses groupname@domain.com -EmailAddressPolicyEnabled $false

and get this error:

The operation couldn't be performed because object 'groupname' couldn't be found on 'host.domain.com'.

Because this is a distribution group in AD, i assume is why i get this error. So, how do i change the primary SMTP address of a distribution group?