On August 26, 2019, the West Virginia State Treasurer’s Office (the “Office”) tentatively awarded the state’s medical cannabis banking and fee-processing services to Element Federal Credit Union (“Element”). Element was one of four vendors vying to provide the various financial services necessary for the State’s Office of Medical Cannabis (the “OMC”) to implement West Virginia’s Medical Cannabis Act.
In March 2018, State Treasurer John Perdue informed the Governor, the respective leaders of the West Virginia Legislature, and various Cabinet officials that the Treasurer’s Office’s current banking vendors refused to process the permit application fees and other monies related to the State’s medical cannabis program. Without the ability to collect fees, the OMC was and currently remains unfunded.
During the 2019 legislative session, the West Virginia Legislature passed, and the Governor signed House Bill 2538, which provided the State Treasurer’s Office with the authority to competitively bid all banking and financial services relating to the State’s medical cannabis program.
It is important to note that the Office has only tentatively awarded the state’s medical cannabis banking contract to Element. In accordance with the Office’s rules, each vendor has until September 3, 2019 to file a written protest to the Notice of Intent to Award. Once the award is finalized, the Office will issue a formal Purchase Order to Element. Thereafter, the Office and Element will promulgate interim guidance and regulations for the state’s medical cannabis banking and fee-processing services.
Once Element is ready to handle the state’s banking services for medical cannabis, the OMC will thereby obtain funding, and an avenue for the growing, processing, and dispensing of medical cannabis in West Virginia will become available.
Steptoe & Johnson PLLC is actively monitoring the West Virginia Medical Cannabis Act and is currently advising prospective medical cannabis growers, processors, and dispensaries on regulated practices, facility considerations, and capital handling structures. If you have questions about the West Virginia Medical Cannabis Act, or how the Act can impact you, please contact one of the authors of this Cannabis Counsel Alert.