Morrisey speaks on medical marijuana

AG Patrick Morrisey released a legal opinion Friday stating that, while states could not fully mitigate the financial risks of marijuana-related revenue for banks, they could help banks comply with current standards and protections. 

CHARLESTON — An opinion released by the West Virginia attorney general on Friday notes that U.S Attorney Mike Stuart — who state officials and lawmakers say is one of the reasons West Virginia’s medical marijuana law has been held up — can’t currently use state funding to block the implementation of the state’s medical marijuana law.

However, Attorney General Patrick Morrisey also noted that there is no guarantee Congress will continue to block U.S. attorneys from doing so in the future, and that if Congress ends its protections, prosecutors like Stuart could take retroactive action over previous marijuana-related activity. 

West Virginia State Treasurer John Perdue and Speaker of the House of Delegates Roger Hanshaw, R-Clay, had asked Morrisey for a legal opinion about West Virginia’s medical marijuana law, which passed in 2017. 

Perdue’s office has said implementing the law has stalled because Stuart repeatedly speaks out, often on Twitter, against marijuana, and no banks have agreed to handle the revenue. 

Perdue and Hanshaw asked Morrisey to tell them whether the state could protect banks from legal ramifications.

Morrisey writes, in the opinion, that while states “cannot fully mitigate the risk” for financial institutions, states “can help lessen the concerns” by helping banks comply with existing protections.

The opinion notes that Congress has repeatedly passed an amendment to federal spending plans that says the Department of Justice can’t use its allocated money to block states from implementing medical marijuana laws. 

“The annual appropriations subject to this restriction finance most forms of federal criminal law enforcement, including the Drug Enforcement Administration, the Federal Bureau of Investigation, and the offices of all United States Attorneys,” the opinion states. 

The opinion refers to the restriction as “expansive protection for entities operating consistent with state medical marijuana laws” while adding that “there is no guarantee that Congress will keep including the restriction in future appropriations bills.”

Del. Mike Pushkin, D-Kanawha, a proponent of marijuana legalization, said he doesn’t see Congress removing its protections, since most states have passed medical marijuana laws.

“He just reaffirmed everything we’ve been saying all along,” Pushkin said.

Stuart said, by phone Friday evening, that many mistakenly believe the amendment to federal spending plans means “no enforcement whatsoever.”

“There will never be a day, no matter what the subject is, that it’s free rein,” he said. “Beef is legal but we have rules with respect to the way it has to be processed, the way it has to be inspected. It has to meet certain standards. You’re going to have the same issues with respect to medical marijuana.”

He said he isn’t opposed to the medical marijuana law, but tweets and speaks publicly against marijuana because it’s more “broadly discussed” than other industries.

Morrisey’s opinion also noted that financial institutions in all 50 states already handle marijuana-related revenue. Crescent Gallagher, spokesman for the West Virginia Department of Agriculture, said it was “highly possible” those banks in West Virginia were handling hemp-related revenue.

Because marijuana remains illegal under federal drug law, those institutions must report that they handle that money to the U.S. Department of Treasury Financial Crimes Enforcement Network. But, the opinion notes, they fill out a streamlined form that lets the federal government know they don’t suspect the businesses are breaking any laws that would remove them from Congress’ protection, such as selling marijuana to children. 

The opinion notes that as of last fall, nearly 500 banks and credit unions submitted those forms because they already conducted marijuana-related business.

“Although a lack of enforcement from federal authorities has so far allowed many traditional financial institutions to provide services to marijuana-related entities in states where cannabis is legal for some or all purposes, the supremacy of federal drug law makes the hesitancy some banks have shown to enter this new market in West Virginia understandable,” the opinion said. “As the State of West Virginia considers how to implement its medical cannabis law, it must carefully consider how to balance the unambiguous federal criminal statutes implicating cannabis businesses with an equally clear, yet potentially temporary, non-enforcement policy that has accommodated over 30 states.

“Over the long term, however, the concerns that motivated your requests stem from federal law, and a permanent, complete solution will require additional federal action.”

West Virginia’s medical marijuana law was originally set to take effect in July this year. This week, a spokeswoman for the state Department of Health and Human Resources said implementation is behind schedule for two reasons — because no banks will handle the revenue, and lack of funding. 

DHHR, which is in charge of permitting growers, processors and dispensaries, as well as developing a training course for doctors who want to recommend marijuana to patients, has said it would need $2 million to implement the law, which passed without funding dedicated to it. 

“Without a process for the West Virginia Department of Health and Human Resources, Bureau for Public Health to accept and disburse funds related to applications for permits and fees associated with the implementation of the Medical Cannabis Act and without funding for the program, the Bureau has not been able to proceed along the original time lines previously established,” Allison Adler, DHHR spokeswoman, said in an emailed statement.

“Consequently, the program is still in the early stages of development. Much has been done to lay the groundwork for implementing the law, however there is more that still must happen both within DHHR and across the industry before a medical cannabis product can be made available (for example, development of growers, processors, and dispensaries for DHHR to permit and inspect).”

Lawmakers have said they hope to propose a fix to the banking issue this session. They’ve suggested allowing credit unions to handle the revenue.

In a statement Friday, Speaker Hanshaw said lawmakers appreciate the attorney general’s opinion, and anticipate the committee on banking and insurance will take up this topic sometime soon this session, which began Wednesday.

The state treasurer’s office said they were still reviewing the opinion Friday.