March 25, 2019

March 25, 2019

Subscribe to Latest Legal News and Analysis

Status of Medical Marijuana in West Virginia

On January 11, 2019, Patrick Morrisey, the Attorney General of the State of West Virginia, issued a legal opinion discussing the legal risks the financial service industry may face as West Virginia implements its medical cannabis law. Marijuana, or cannabis, is classified as a Schedule I drug under the federal Controlled Substance Act.

Marijuana is still illegal under federal law. As such, federal law creates obstacles for federally regulated financial institutions. If a bank chooses not to report marijuana-related activity, it could face federal criminal charges, civil liability, and its officers could be held personally liable.

Given these complications, the Attorney General has explained the viability of several potential responses to safeguard banks from these regulations. These responses include creating one or more of the following: (i) a “Seed-to-Sale” system, wherein the State would enact its own safety regulations regarding marijuana to minimize exposure that banks face; (ii) a “Closed-Loop” system, which circumvents traditional banking methods by conducting all financial transactions involved in a state-legalized marijuana industry through a separate, state-managed portal; (iii) a state-run bank, in attempts to avoid the federal regulations altogether; and finally (iv) a “Cannabis Credit Co-op,” which would operate similar to a credit union.

Despite the lack of guidance from state and federal authorities, the medical marijuana industry is flourishing in the United States. It presents an opportunity for creative, thoughtful entrepreneurs to develop compliant payment systems that preserve the integrity of West Virginia’s medical marijuana program and minimize the potential risk of federal criminal and civil liability for financial institutions and others participating in the program.

© Steptoe & Johnson PLLC. All Rights Reserved.

TRENDING LEGAL ANALYSIS


About this Author

Brian Laliberte Business Attorney
Member

Brian Laliberte is relentless. His singular focus is to help clients achieve their objectives. He immerses himself in his clients’ businesses and industries so that he can provide clear, direct, and timely strategic and tactical counsel. He cuts through the clutter and finds the best route for his clients.

Brian’s practice can best be described as a hybrid trial-business practice. He is a formidable advocate and strategist in litigation matters and in the boardroom. He has an uncanny ability to assimilate information, identify operative issues, design a plan, and execute it. In...

614-458-9792
Steven Royce Commercial Attorney
Associate

Steven Royce focuses his practice in the areas of banking, real estate, and commercial transaction law.

Work Experience

2016   Steptoe & Johnson PLLC

2015   Summer Associate, Steptoe & Johnson PLLC

2014   Summer Associate, Steptoe & Johnson PLLC

Key Experience

Drafted petition for exemption for client’s commercial use of an Unmanned Aircraft System (UAS/Drone) with the Federal Aviation Administration (FAA)

Assisted in drafting loan modification documents

Assisted in preparing documents for real estate transactions

Professional

CALI Award - Insurance 
CALI Award - Transactional Skills
Graduated magna cum laude, West Virginia University, B.S. (Accounting)

304-598-5375