Before a House committee passed a bill Thursday designed to fix banking issues with a looming medical marijuana program, lawmakers amended in language to stave off perceived threats from an “overzealous” federal prosecutor.
The House Banking and Insurance Committee passed an edited version of House Bill 2538 Thursday. It still needs to get through the Judiciary Committee before landing on the House floor.
Delegate Isaac Sponaugle, D-Pendleton, put forth an amendment stating West Virginia will legally protect its employees against any “claims, charges, liabilities or expenses,” should they arise.
“The bill might make a statement that if they’re going to stand up and attack our state employees since we’re mandating that they follow this, they should not be subject — they may or may not get charged, but the state needs to stand up and back them from overzealous federal prosecution on this,” he said.
He later explained the amendment, naming Mike Stuart, U.S. Attorney for the Southern District of West Virginia, as the “overzealous” prosecutor, citing an anti-recreational and medical marijuana symposium he held in December, his ongoing civil lawsuit against a Mason County hemp farm, and other dustups with the cannabis sativa plant.
Medical marijuana is illegal under federal law, although a number of safeguards prevent the federal government from prosecuting medical marijuana businesses that operate legally under state laws.
West Virginia Attorney General Patrick Morrisey authored an advisory opinion to that effect in January. It essentially says though there are risks for the state in running counter to federal law, other states do it and there have been no federal enforcement actions in those states where marijuana is legal, and a number of “safe harbors” against federal enforcement have existed for years.
Diana Stout, general counsel to Treasurer John Perdue, explained the banking issue to the lawmakers. She said the office has to process license fees, penalties and taxes associated with the program, although the vendor that runs its central account won’t touch medical marijuana funds.
The bill will enable different financial institutions to bid for the business.
“The purpose of this bill is to try to enhance and make it an opportunity for credit unions, because right now, credit unions cannot bid on the concentration account,” she said. “Because there is some interest from them, we are hoping that they will actually bid on this.”
Sponaugle asked Stout about the protections. She said her office would like to see them, given Stuart’s posturing.
“Earlier you mentioned a federal prosecutor, and he seems to be pretty vehement in terms of his beliefs against marijuana as a whole,” she said. “He brought civil action against hemp farms. We have no idea what he basically would do in regard to this. So the office really is a little bit worried.”
The bill found one vocal critic in Delegate Eric Porterfield, R-Mercer. He offered an amendment that would clarify the banking mechanism only applies to medical marijuana, not recreational marijuana legislation, as has been introduced by House Democrats.
He said the medical banking bill is opening the state up to “very bad things” in the future that are both divisive and “uncouth.” The committee voted down the amendment and went on to pass the bill.
In an interview after the hearing, Perdue said he’s happy to see the long-awaited banking fix get off the ground. He said he didn’t know for sure whether his office could make the July 1 deadline, assuming all other pieces of the program can make it as well. Gov. Jim Justice signed the Medical Cannabis Act into law in 2017, with sales scheduled to begin this July 1.
He declined to comment on the Legislature tailoring its laws around Stuart.
“I really don’t have a comment about that,” he said. “My job is to enforce the laws of the Legislature. Whatever those laws are, as the Treasurer dealing with banking, that’s what I’ll do.”
Stuart did not attend Thursday’s hearing, but issued a statement afterward.
“My office is not in the business of enforcing state laws,” Stuart said. “This United States Attorney will never apologize for doing my duty to protect the public, the vulnerable, and enforcing federal laws.”