Five financial institutions submitted bids to provide banking services for West Virginia’s medical cannabis program.
Gina Joynes, a spokeswoman for Treasurer John Perdue, said there’s no definitive timeline as to when a winner will be selected, and evaluations begin next week. The five vendors are: Element Federal Credit Union, Paul Fairbanks IFEB, MVB Financial, DMTLP and JP Morgan.
The bid submissions mark the clearing of a significant hurdle for the program since Perdue told state officials in March 2018 that his vendors had no desire to process any sales, fees, licenses or taxes under the program, given the conflict with federal law.
Under the program, dispensaries are to be taxed at 10 percent of their gross receipts. Permits to operate as a grower/processor cost $50,000. Permits to operate as a dispensary cost $10,000 per location. The program caps permits at 10 growers (with two locations per permit), 10 processors and 100 dispensaries.
Upon request of Perdue and House Speaker Roger Hanshaw, R-Clay, West Virginia Attorney General Patrick Morrisey produced an advisory opinion on the medical cannabis program. The opinion found that while any medical marijuana business is likely operating in violation of federal law, there’s no evidence of any federal enforcement actions taken against the industry. Likewise, several “safe harbors” exist for businesses operating legally under state laws.
State lawmakers used the opinion to support legislation that allowed Perdue to bid out the banking contract. At the time, they emphasized the ability of a credit union to handle the program’s financial end.
However, Richard Shaffer, senior vice president of the West Virginia Credit Union League, offered a lukewarm outlook on the program from the industry. He said the league took a neutral position on the legislation, though he thinks the culture of West Virginia’s credit unions is too risk-averse to seek entry.
“We have not advised any credit unions to get into that business,” he said. “We have advised them on what the current laws are and provided them all the updates on what the various legal entities have said on it.”
The league is comprised of roughly 82 of the 86 credit unions in the state. None of the bidders, he said, are league members.
In March, Jason Frame, executive director of the Office of Medical Cannabis, estimated it will be two to three years after the state implements a banking system for the program before patients can actually procure marijuana, “if all goes smoothly.”
In related news, Gov. Jim Justice signed a bill Saturday designed to improve the business potential for businesses getting into the medical cannabis industry.