CHARLESTON, W.Va. — West Virginia Attorney General Patrick Morrisey has concluded the state can take some steps to ease concerns about processing money related to medical marijuana, but a long-term solution must come from the federal government.
“We conclude that notwithstanding West Virginia’s law, marijuana’s federal status as a controlled substance makes it very difficult for medical marijuana businesses to operate in a way consistent with current federal law and that by extension, financial institutions providing services to these entities may be at risk of federal civil or criminal liability,” Morrisey wrote in an opinion released today.
The Attorney General also noted that his office is not aware federal enforcement actions for services related to the marijuana industry in states where medical marijuana is legal.
“Ultimately, however, this issue implicates federal law and criminal statutes, and any permanent fix must come from the federal government,” the Attorney General concluded.
Thirty-three states have laws legalizing marijuana for medical use.
West Virginia has had its medical marijuana law since 2017, when legislation was passed out of the Senate and then was forced to a floor vote in the House of Delegates. Gov. Jim Justice signed the bill into law, saying “all of us will feel like we’re doing something good for families out there.”
But questions arose shortly after that about how West Virginia would comply with federal law when handling taxes and fees.
A bill meant to address those issues passed the Senate last year but fell short in the House of Delegates on the final night of the regular session.
The state Treasurer’s Office has been searching for solutions for handling funds.
One possibility recommended by the Treasurer’s Office was establishing a state bank. Another was a third-party loop system through a vendor, essentially conducting financial transactions through a portal. And yet another under discussion is a cash-only system.
The opinion from the Attorney General’s Office explored each of those possibilities, concluding that some aspects of the proposals might improve confidence that those handling funds associated with medical marijuana would not face federal scrutiny. But the Attorney General’s Office said in each case there would be no guarantee.
“It does not appear that any state has found a complete solution,” Morrisey wrote.
“The most effective option for States seeking to facilitate access to banking services for cannabis-related entities may be to design implementing regulations in a way that makes it easier for banks to comply with current federal reporting obligations.”
U.S. Attorney Mike Stuart has been vocal about concerns about complying with federal law. “This U.S. attorney doesn’t pick the law,” Stuart has said.
The Attorney General noted that Congress has blocked the U.S. Department of Justice from using its funds to interfere with a state’s authorized marijuana-related activities.
But the opinion issued Friday also warns there is no guarantee Congress will maintain the restriction. It also concludes that ending the funding restriction could provide risk of retroactive prosecution.
Delegate Mike Pushkin, D-Kanawha, described the advisory opinion as helpful, saying it does make clear that there are federal safeguards against prosecution already in place. Pushkin also noted the report’s conclusion that no state so far has experienced federal prosecution.
“It confirmed what a lot of us have been saying all along,” Pushkin said. “That is the Department of Justice and more specifically our U.S. Attorney here in southern West Virginia cannot use federal funds to prosecute medical cannabis programs.”
Pushkin said he’s preparing a bill that would provide flexibility for credit unions to bid on handling transactions for medical marijuana in West Virginia.
“Allowing them to bid on it would be the small government, simple free market approach to the situation,” Pushkin said.
House Speaker Roger Hanshaw, R-Clay, and state Treasurer John Perdue formally asked for the advisory opinion from the Attorney General’s Office.
Perdue’s office released a reaction this afternoon, noting that the advisory opinion is complicated. That statement continues to say Perdue takes his role seriously and recognizes the need for a lawful solution. It concludes by saying Perdue and his legal team will take time to analyze the opinion.
The Attorney General earlier provided an informal advisory to the Governor’s Office, although that advisory was not publicly released.
Governor Justice again described a desire to fix West Virginia’s medical marijuana law during his State of the State address.
“As far as medical cannabis, we need to solve the riddle, guys. We’re running out of time. There’s a lot of people out there that are hurting, and they could probably very well use medical cannabis.”
The governor did not recommend a fix during that speech though.
State lawmakers started reacting right away on social media to the Attorney General’s advisory opinion.
Thanks to WV AG for issuing opinion. It is clear the fed govt needs to act now to legalize med cannabis. This has been a bipartisan effort across the country & it is time for Congress to act now. Get it done for the American people, @realDonaldTrump, @senatemajldr, @SpeakerPelosi
— Jordan Hill (@DelegateHill) January 11, 2019
— Shawn Fluharty (@WVUFLU) January 11, 2019