CHARLESTON, W.Va. — “This U.S. attorney doesn’t pick the law” was the response from Mike Stuart, U.S. attorney for West Virginia’s Southern District, when asked about the potential for prosecutions of banks processing funds from a state-legalized medical marijuana industry.
“We enforce all laws,” said Stuart during an appearance on Friday’s MetroNews “Talkline.”
Under federal law, marijuana is a Schedule I controlled substance and it will mostly likely remain that way after the Mountain State’s medical cannabis law takes effect in July 2019.
Existing banks have indicated being uncomfortable or unwilling to process funds from medical marijuana because of that and, Stuart said, it’s a valid concern.
Under federal law, he noted Thursday night on Twitter, banks that provide marijuana businesses with checking, debit or credit cards or business loans can be found guilty of money laundering or conspiracy.
“This is not just a West Virginia issue,” Stuart said.
Fed law makes it crime to engage in certain transactions, including involving insurer, with money known to be derived from cannabis. Law requires banks and financial firms to file suspicious activity reports for transactions involving pot. Not complying is big problem.
— US Attorney Mike Stuart (@USAttyStuart) May 17, 2018
The West Virginia Medical Cannabis Act was passed during the 2017 Regular Legislative Session and is scheduled to take effect on July 1, 2019 when the first patient identification cards should be issued.
That take effect date, though, remains in question until the banking matter is addressed.
Earlier this month, state Treasurer John Perdue sent a letter to Governor Jim Justice proposing two possible alternatives: (1) establishing a state bank or (2) establishing a third-party loop system through a vendor.
Both options require legislative action.
“The idea of a state-run bank, aside from the cost of forming that bank, the lack of federal deposit insurance, it would still have to use federal wiring services and it would have to engage in interstate commerce to some extent,” Stuart said.
Cannabis co-ops, in his view, would also not be an option because Federal Reserve consent is required.
“California, Oregon, other states, Alaska, have gone down this same road to consider whether they want a state-run bank,” Stuart said.
As of Friday, West Virginia House Democrats were still circulating an online petition through the West Virginia Democratic House Legislative Committee calling for the medical marijuana banking issue to be addressed during an upcoming Special Session.
Governor Jim Justice has discretion for what makes it onto the agenda for the Special Session that was expected to begin on Sunday at the State Capitol.