After extensive research and the release of a Request for Information, State Treasurer John Perdue has submitted a letter to Governor Jim Justice recommending two possible banking solutions for medical marijuana in West Virginia. Both options would require legislative action.
Those options included: - Passing state legislation that would strengthen the State Treasurer’s authority to create and implement a third-party loop system through a vendor; or
- Passing legislation that would create a State Bank within the Treasurer’s Office.
Both options were sent to Governor Jim Justice via letter. The loop system would monitor and facilitate the financial transactions between the State of West Virginia and entities associated with medical cannabis along with the appropriate compliance requirements by the banking industry. The state-owned bank option would create a bank owned and operated by the State of West Virginia, similar to operations in North Dakota. Both options would have potential costs and implementation timelines that would be determined during the legislative process.
Treasurer Perdue noted there were only two submissions to the recent Request for Information (RFI) issued by the State Treasurer’s Office in search of solutions.
“I was disappointed there were only two brief submissions to the RFI, however, my staff and I feel there is enough expressed interest and research available to suggest the two options I have presented,” Perdue said.
In addition to the RFI, Treasurer Perdue has taken other steps to move forward with processing medical cannabis funds in the state, despite the complexity of the issue. Those steps included a letter to the U.S. Treasury Secretary for clear banking guidance, a letter to members of Congress and research of other state practices.
“It is my fiduciary responsibility to follow state laws and conduct the banking business of the state in a safe and secure manner,” Perdue said. “Up until this time, my office was not part of the planning process for implementing medical cannabis, however, when we became aware there might be a state banking issue related to this, we began researching options and took steps to actively address the issue.”
Perdue added that there has not been any additional guidance on the federal level, but the U.S. Treasury Department’s FinCEN guidance on cannabis banking remains in place.
In 2017, West Virginia lawmakers legalized medical marijuana. Earlier this year, banking vendors currently on contract with the state notified the Treasurer that they will not accept deposits related to marijuana sales, citing federal banking laws.