Morrisey: Medical marijuana financial regulations should closely mirror federal law

West Virginia Attorney General Patrick Morrisey says any regulations governing banks that handle transactions for businesses that sell medical marijuana should closely mirror federal law. (MGN Online)

West Virginia Attorney General Patrick Morrisey said any regulations the state hammers out for banks handling transactions for businesses that sell medical marijuana should be carefully crafted to closely mirror federal reporting obligations.

The attorney general said in an opinion Friday that it may take federal action, however, for a complete solution to a dilemma that has made states fear running afoul of the law.

“It does not appear that any state has found a complete solution,” Morrisey said in a news release. “The most effective option for states seeking to facilitate access to banking services for cannabis-related entities may be to design implementing regulations in a way that makes it easier for banks to comply with current federal reporting obligations.”

The opinion from Morrisey responded to a request sought by West Virginia Treasurer John Perdue and House Speaker Roger Hanshaw. Both leaders asked if the state could safeguard financial institutions that serve companies involved with the sale of medical marijuana.

Morrisey said he understands the hesitancy some banks have shown to enter the new market, since the fact remains that marijuana remains illegal under federal law.

That means any entity that provides banking services to a cannabis business carries an inherent risk of federal civil or criminal action, even in states where medical marijuana is legal, such as soon will be the case in West Virginia.

Congress has blocked the U.S. Department of Justice from using its funds to interfere with a state’s authorized marijuana-related activities. Morrisey’s opinion on Friday warns there is no guarantee Congress will maintain the restriction. It further concludes an end to the funding restriction could expose entities to retroactive prosecution within the statute of limitations.

The opinion also recognizes reporting guidance issued by the U.S. Department of Treasury to effectively provide a “safe harbor” for banks serving marijuana-related businesses. It also points out the congressional funding restriction, that guidance could be rescinded at any time.

West Virginia House Speaker Roger Hanshaw, R-Clay, released a statement after Morrisey issued his opinion.

“We’ve been aware of the conflict of the medical marijuana statute and federal law, and various proposals to alleviate that," Hanshaw said. "We appreciate the attorney general’s analysis of the situation and insight on potential paths forward. I anticipate our Committee on Banking and Insurance will take up this topic sometime soon this session.”

Below is Morrisey's opinion:

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