West Virginia creates banking framework for medical marijuana-related transactions

State Issues State Legislation Medical Marijuana

On March 26, the West Virginia governor signed HB 2538, which establishes a legal banking framework in West Virginia for handling medical marijuana-related funds. Medical marijuana was legalized in 2017 and distribution was authorized to begin July 1. Among other things, HB 2358 permits the state’s treasurer to “competitively bid” one or more financial institutions—including credit unions and non-bank entities—to provide banking services for fees, penalties, and taxes collected under the West Virginia Medical Cannabis Act (the Act). The Act also does not prohibit or otherwise impair a financial institution from providing services to a person or entity involved in a medical cannabis-related business functioning under the Act “solely because the person or entity is a grower, processor, dispensary, owner of any proportion, operator, employee, patient, caregiver, family or household member, financial broker, or other similar person or entity” except that the Commissioner of Financial Institutions has authority to enforce applicable laws and regulations related to ensuring the safety and soundness of a financial institution. HB 2538 serves to provide a solution to banking problems West Virginia has encountered in connection with the Act. HB 2538 takes effect 90 days after passage.