Legislators heard an update on banking issues with the state’s medical marijuana program and also approved sending a letter requesting a legal opinion from the West Virginia Attorney General on proposed banking solutions.
Diana Stout, general counsel with the West Virginia State Treasurer’s office addressed lawmakers during Monday’s Joint Committee on Health. Stout said the office has run into issues in crafting possible solutions. She said banking institutions relayed their concerns to the office following U.S. Attorney General Jeff Sessions rescinding the Cole Memo.
Stout said the office mainly deals with BB&T, which told the office it would not be willing to accept medical marijuana funds. She said U.S. Bank has mentioned similar concerns, saying both cited the rescission of the Cole Memo.
Stout said the Treasurer issued a request for information, soliciting responses from 70 different financial institutions, but only received two proposals back. She said neither had much information and wouldn’t provide more information until they were competitively bid.
Delegate Mike Pushkin, D-Kanawha, asked her if she felt the reason banks have not reached out is because they want to wait until it’s opened up to bid. Stout said she hoped that was true. She said there are some cases where a bank’s board of directors are not willing to accept money from the program.
Stout said in May, the office sent a letter to the governor outlining two options—one a state bank and another, a closed-loop system. She said North Dakota has experienced economic stimulus from its state bank. However, she said there are certain things the Bank of North Dakota does to generate money that is already handled by other agencies in West Virginia. She said a state bank would be expensive. Delegate Mick Bates, D-Raleigh, asked how much it would cost and Stout estimated without capital cost, it would be about $2-3 million to start.
Stout said the office felt the closed-loop system as the best option. To describe this system, Stout used the example of signing up for a Lowes card, which would only be usable within that system, whereas an open-loop system would allow a person to use that card at other home improvement stores. She said there were concerns that an open-loop system would be less manageable.
Stout said the governor asked for a legal opinion from the West Virginia Attorney General regarding banking solutions but she was not aware of a response as of Monday.
Delegate Andrew Robinson, D-Kanawha, made a motion for the committee to urge the Attorney General’s office to provide a legal opinion on banking solutions and separately request the Senate President and House Speaker to request a legal opinion of their own, which would be identical to the governor’s request. His motion was adopted in a 15-7 vote.
