Millions in Cannabis Revenue Meant for Health and Safety Programs Remain Unused
Since West Virginia’s first medical cannabis dispensary opened in 2021, the state has collected nearly $34 million in taxes, licensing fees, and interest from its medical marijuana program. The money, by law, was supposed to fund drug treatment programs, medical cannabis research, and law enforcement training—initiatives designed to strengthen the state’s public health and safety infrastructure.
Yet four years later, not a single dollar has been spent.
According to the West Virginia State Treasurer’s Office, the funds remain locked in a credit union account, untouched and unavailable for use because of federal banking restrictions tied to marijuana’s classification as an illegal substance.
“The money in the fund will remain unallocated until federal law changes,” said Carrie Hodousek, spokesperson for the treasurer’s office.
Cannabis Cash Caught Between State Law and Federal Prohibition
The problem stems from marijuana’s status under federal law. Classified as a Schedule I drug since 1970, cannabis is still considered to have “no medical use” and a “high potential for abuse.” Although 40 states now have legalized either medical or adult-use cannabis, financial institutions that interact with cannabis proceeds remain subject to federal penalties for money laundering or aiding illegal activity.
This contradiction has created chaos for states like West Virginia that have legalized cannabis but must still operate within the bounds of federal financial law.
Traditional banks, wary of federal repercussions, refused to handle the state’s cannabis funds when the program launched. As a workaround, the state legislature passed a 2019 law allowing credit unions to manage cannabis-related finances.
Element Federal Credit Union, based in Charleston, accepted the challenge and became the official holder of the state’s medical cannabis revenue.
“It’s up to the individual bank if they want to take that risk,” said Linda Bodie, CEO of Element. “We obviously took the risk because it’s important for the state and the industry to function.”
Delayed Rollout and Longstanding Confusion Over Cannabis Banking
West Virginia’s medical cannabis journey has been anything but smooth. The Medical Cannabis Act, passed in 2017, allowed doctors to recommend medical cannabis for patients with qualifying conditions. But it took more than four years for dispensaries to open due to logistical and legal hurdles.
Former State Treasurer John Perdue faced widespread criticism for the program’s early delays, as banks refused to accept cannabis-related deposits. Without a place to store license and tax fees, the state was unable to issue permits to growers or dispensaries.
The impasse persisted until lawmakers amended the law in 2019, allowing a credit union solution. But even after sales began in late 2021, the revenue that started flowing into the state’s coffers remained frozen in place caught between compliance fears and federal prohibition.
Lawmakers Express Surprise and Frustration Over Idle Funds
Many state legislators who helped craft West Virginia’s medical cannabis laws expressed shock when they learned that millions of dollars in designated funds remain unspent.
“I was not aware of that,” said Delegate Mike Pushkin (D–Kanawha), who co-sponsored the 2019 cannabis banking legislation. “That’s the first I’ve heard that it wasn’t being spent.”
Senator Mike Woelfel (D–Cabell), author of the original Medical Cannabis Act, said he recently discussed the issue with Treasurer Larry Pack.
“I think this has come to the attention of Treasurer Pack, and I think he’s summoned the experts to find a way to meet the expectations of the bill and make this work,” Woelfel said.
While West Virginia Waits, Neighboring States Put Cannabis Revenue to Use
Other states with legal cannabis markets are moving forward with spending their revenue on public health, safety, and education.
- Maryland directs one-third of its cannabis taxes to programs benefiting communities harmed by drug criminalization, while the rest supports state and local government budgets.
- Ohio has distributed over $35 million to its general fund, with plans to expand allocations in the current fiscal year.
- Pennsylvania has used its medical marijuana revenue to bolster addiction recovery programs and support its Commission on Crime and Delinquency.
According to Andrew Livingston, Director of Economics and Market Analysis at cannabis law firm Vicente LLP, West Virginia’s inaction is an anomaly.
“I’m not aware of a systemic issue where cannabis tax revenue cannot be spent in states with legal markets,” he said.
How the Unused Cannabis Fund Could Help West Virginians Today
If West Virginia were to release the full $34 million, the allocations would be transformative for public programs struggling with underfunding.
Under state law:
- $19 million would go to the Bureau for Public Health to support medical research and program evaluation.
- $8 million would flow to the Fight Substance Abuse Fund to support addiction recovery efforts.
- $6 million would go to the Division of Justice and Community Services for community safety initiatives.
- $1.5 million would fund law enforcement training and professional development.
“This is a significant amount of money,” said Dr. Matthew Christiansen, who served as state health officer from 2023 to 2024. “It could help quite a few people, or stand up specific programs for a period of years that would make a positive impact for people with addiction.”
Christiansen added that while federal funds for drug treatment have declined in recent years, West Virginia’s own cannabis revenue could help fill the gap.
“It’s nothing to sneeze at,” he said. “That money could provide sustainable funding at a time when it’s desperately needed.”
The Human Impact: Prevention and Education Programs at Risk
For Elizabeth Shahan, executive director of West Virginia Prevention Solutions, the unspent funds represent a missed opportunity to protect the state’s youth.
Her organization, which focuses on substance use prevention, has struggled since losing federal support. She said a portion of the cannabis fund could help sustain evidence-based prevention education in schools especially after the closure of the state’s RAZE program, a youth initiative that fought tobacco and vaping addiction.
“That fund alone could secure prevention education in our schools,” Shahan said. “Every dollar that’s available for prevention really needs to be invested in prevention. If it sits, it doesn’t do anyone any good.”
West Virginia currently leads the nation in teen vaping, according to a study by Drugwatch, and ranks among the worst states for opioid and substance use disorder rates.
Advocates argue that allowing millions of dollars in cannabis tax revenue to remain idle while communities struggle with addiction is both a moral and policy failure.
Will Federal Reform Unlock the Funds?
The future of West Virginia’s cannabis fund depends on whether federal policy evolves. The Biden and Trump administrations have both taken limited steps to ease restrictions on cannabis banking, but marijuana remains illegal under federal law.
If Congress passes the long-delayed SAFER Banking Act, financial institutions would gain explicit legal protection to handle cannabis-related funds potentially freeing up the state’s $34 million to be used as intended.
For now, however, the money sits motionless in a Charleston credit union, growing modestly with interest but providing no tangible benefit to the people it was meant to serve.
As Dr. Christiansen put it, “We’re sitting on resources that could save lives. Until something changes federally, they’ll keep collecting dust.”
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