Advisory Opinion Paves Way for Medical Marijuana
CHARLESTON — An advisory opinion from West Virginia’s top attorney could give lawmakers the green light to proceed with fixing the state’s medical marijuana law while at the same time warning about long-term legal issues at the federal level.
West Virginia Attorney General Patrick Morrisey released an advisory opinion Friday, offering the state guidance on how to proceed with implementing its Medical Cannabis Act. The opinion was requested by state Treasurer John Perdue and House Speaker Roger Hanshaw, R-Clay.
“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,” the opinion states. “Nevertheless, we are aware of no federal enforcement actions for services related to the marijuana industry in states where medical marijuana is legal, and ‘safe harbors’ against federal enforcement have existed for the past several years.”
The Medical Cannabis Act was created with the passage of Senate Bill 386 in 2017. The state Department of Health and Human Resources’ Office of Medical Cannabis, along with the Medical Cannabis Advisory Board, have been working to get the program up and running by the July 1 deadline.
The program, however, has run into a hiccup that could delay its full implementation. Last March, Perdue sent a letter to Gov. Jim Justice informing him the treasurer’s office would not be able to handle revenue generated by the application fees for dispensaries wanting to participate in the medical marijuana industry.
The state Senate attempted to address the banking issue last session in an amendment to a House bill, but the legislation died in the House on the final day of the 60-day general session. At the time, Perdue recommended creating a third-party system or a state bank to handle these transactions.
The federal Controlled Substances Act classifies marijuana as a Schedule 1 controlled substance, making it risky for banks to handle revenue generated by legal medical and recreational marijuana in states. A memorandum from the U.S. Justice Department under former President Barack Obama previously protected states from enforcement actions for legal marijuana, but that memo was rescinded by the Justice Department under President Donald Trump.
Even without the memo, Congress has not funded Justice Department budget line items that would provide funding for closing down legal marijuana in the states. According to the advisory opinion from Morrisey, 500 banks and credit unions across the country chose to handle legal marijuana transactions.
“Regardless of future changes in federal policy, West Virginia would not be alone if it continues to implement its medical marijuana laws,” Morrisey wrote.
Still, Morrisey urged caution should federal and congressional policies change.
“There is no guarantee that Congress will keep including the restriction in future appropriations bills,” Morrisey wrote. “And if it removes the restriction, the consequences could be significant.”
While the state would not be able to completely shield banks from the legal and criminal liabilities involved with handling medical marijuana transactions, Morrisey said there are some options. These include handling all transactions with cash, enacting regulations requiring medical marijuana businesses to document their strict compliance with state law or a state-created “closed loop” system similar to a state bank.
Gina Joynes, communications director for the treasurer’s office, said Perdue is looking over the advisory opinion.
“The 10-page document is a complex opinion that weighs the legal risks of medical cannabis banking,” Joynes said. “Treasurer Perdue takes his role regarding this issue seriously and recognizes the need for a lawful solution. An initial review of the opinion appears to allow the state Legislature to move forward with legislation that will address medical cannabis banking issues in West Virginia; at the same time, it states, “any permanent fix must come from the federal government.”
Lawmakers are also reviewing the opinion as they prepare to offer fixes for the banking system. Delegate Shawn Fluharty, D-Ohio, has been outspoken on the need to get the state’s medical marijuana program functional.
“Morrisey’s opinion today is a fair and accurate assessment of the law,” Fluharty said. “It clearly provides a path for successful medical cannabis implementation in West Virginia and reiterates what I have said from the beginning — it’s time to move forward and the obstructionists in our way need to stand down because we have West Virginians who need our help.”
One of the obstructionists Fluharty is referring to is Mike Stuart, the U.S. attorney for the Southern District of West Virginia. Stuart has frequently used social media to speak out against legal marijuana, including the medical kind. He recently held an invitation-only symposium on marijuana with anti-cannabis proponents.
Stuart’s office did not respond to a request for comment.
Delegate Mike Pushkin, D-Kanawha, also has worked to make the state’s medical marijuana program work, introducing several bills already this session. Pushkin frequently has engaged Stuart on social media and even attended Stuart’s forum.
“It appears the attorney general has reaffirmed what proponents of the Medical Cannabis Act have been saying all along,” Pushkin said. “The Department of Justice, specifically Mike Stuart’s office, cannot prosecute a legal cannabis program. That would be a misappropriation of federal funds.”
West Virginia is one of 33 states and Washington, D.C., Guam and Puerto Rico that have legal medical marijuana on the books.