House Judiciary Committee passes medical cannabis banking bill

CHARLESTON, W.Va. – The House Judiciary Committee overwhelmingly approved and sent to the House floor the medical cannabis program banking bill, HB 2538. The vote was 20-3.

Two of the opponents expressed concerns about cannabis remaining Schedule I and federally illegal.

“This is simply a mechanism to get around federal law,” said Delegate Tom Fast, R-Fayette.

Delegate Ray Hollen, R-Wirt, said, “This is no different than any other money laundering scheme.”

In contrast, Delegates Brandon Steele, R-Raleigh, and Mike Pushkin, D-Kanawha, both pointed out that Congress has for several years deliberately appropriated no money to prosecute state cannabis programs, there have been no prosecutions attempted against the other 30-plus state programs, and the incoming U.S. attorney general has said he won’t prosecute any.

People who oppose getting West Virginia’s program up and running, Steele said, are “frankly being obstructionist. … This is medication.”

Judiciary’s committee substitute for the introduced bill wraps in the changes approved by the Banking and Insurance Committee. It creates two state funds. The primary one is the Medical Cannabis Program Fund designed to receive license fees, penalties and taxes associated with the program. The other is the Treasurer’s Medical Cannabis Fund created to receive all fees charged to the institution by the treasurer and to be spent on oversight and compliance expenses.

The treasurer will select by competitive bid one or more financial instruction to handle banking services for the fund. The institution may be a bank, credit union a “non-bank financial institution.”

Once federal law changes and it becomes legal for banks to handle program money, the contract or contracts will end and the money will be transferred to the institution holding the state concentration account, meaning the single account it uses to write checks.

Diana Stout, general counsel for the treasurer’s office, repeated much of what she told Banking and Insurance. The bank holding the state’s checking account, BB&T, won’t handle cannabis money. Other institutions have expressed interest but won’t step up. So this bill is an effort to stir the interest of credit unions to bid on a contract.

Stout told Judiciary members that West Virginia faces a bit more of a challenge than other states because Southern District U.S. Attorney Mike Stuart is outspoken in his opposition to medical and recreational cannabis.

Stout said that her office hasn’t contacted other states about their banking solutions, partly because Stuart poses a unique challenge. But Pushkin said bill sponsors and advocates have spoken with and visited other states and consulted with law firms engaged in the cannabis business to learn about their programs and practices.

This bill’s final paragraphs spell out various state-level protections for financial institutions, state employees and state officers involved in the program.

Delegate Marshall Wilson, R-Berkeley, wrapped up the debate before the vote. He said there are many veterans wrestling with pain and other issues who would benefit from medical cannabis, and that available treatments turn them into zombies. “Please help us out here.”

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