A bill that provides state protections for banks that deal with medical marijuana revenue was approved overwhelmingly by the West Virginia House of Delegates on Friday.
Introduced by Del. Eric Nelson (R), the legislation authorizes the state treasurer to open a bidding process for banks and other financial institutions that are willing to process the “fees, penalties and taxes collected under” the state’s medical cannabis program.
It would also make it so the state government could not “prohibit, penalize, incentivize, or otherwise impair” financial institutions that accept accounts for medical cannabis businesses operating in compliance with state law. And if state employees face penalization by the federal government or otherwise for being involved with marijuana-related banking, the bill stipulates that the government will do everything “permitted by law” to defend them and will cover “payment of the amount of any judgment obtained, damages, legal fees and expenses, and any other expenses incurred.”
Part of the motivation behind the legislation was that the implementation of West Virginia’s medical marijuana system has been delayed because banks fear federal prosecution for taking on cannabis-related accounts. Medical cannabis products are supposed to become available to patients starting July 1.
To that end, Nelson’s bill is largely symbolic, as marijuana remains prohibited at the federal level and there is nothing West Virginia lawmakers can do to change that. Concerns about prosecution and asset forfeiture have long haunted financial institutions operating in legal states, but so far those that have taken the risk have operated unencumbered. That could explain why a growing number banks have begun opening cannabis accounts, according to federal data.
“The Legislature finds and declares that the inability to provide banking services needed to collect and remit the fees, penalties, and taxes authorized under the West Virginia Medical Cannabis Act has delayed the implementation and is precluding access by the patients potentially eligible to be prescribed medical cannabis and investment by the persons and entities interested in providing services under the Act,” the bill states.
And while federal marijuana banking reform legislation hasn’t succeeded in past sessions, lawmakers convened for the first cannabis hearing on the 116th Congress this week and discussed addressing the issue—a sign that comprehensive legislative change could be on the horizon.