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Daily Court Reporter - News Legislation proposes medical marijuana payment system


Legislation proposes medical marijuana payment system

KEITH ARNOLD, Daily Reporter Staff Writer

As the Buckeye State moves toward full implementation of a policy of lawful medical marijuana use, legislators have tinkered and tailored state law and regulation to establish a framework which will allow for limited, legal use.

Of the remaining loose ends, the question of bankability and how transactional funds that are prohibited by federal regulation to stream in and out of commercial banks may be used is arguably the most important.

The Government and Accountability and Oversight Committee in the Ohio House of Representatives has taken on the challenge as members consider a proposed a closed-loop payment system forwarded by House Majority Leader Rep. Bill Seitz, a Cincinnati Republican.

“Whether you support or oppose Ohio’s Medical Marijuana legislation, we all should share a desire that the program be operated with tight controls to prevent tax evasion, money laundering and unsavory characters becoming involved in the distribution chain,” Seitz told fellow House members during sponsor testimony. “We all should desire a system that lets the state carefully monitor who is recommending medicinal marijuana, who is buying it, and how often.

“After all, we learned these lessons the hard way with the opioid crisis and the pill mills, which we finally reined in after years of overprescribing, abuse and black market sales.

That is what House Bill 495 is all about, he said.

The bill would require the state commerce department to adopt rules that establish a closed-loop payment processing system under the Medical Marijuana Control Program.

Individual accounts maintained by the state would facilitate cashless purchases of medical marijuana products by patients and caregivers and pay staff working for authorized medical entities in addition to paying vendors and staff working for authorized sellers.

The commerce department also would authorize state-chartered banks or credit unions to participate in the system and to authorize a closed-loop debit card for making transactions in the system, the bill proposes.

Once operational, all medical marijuana entities and all customers must use the cashless system,” Seitz said. “… The federal government continues to believe that marijuana is a Schedule I Drug, and that those who are in the chain of involvement, including the financial institutions who bank marijuana entities, are at risk of federal prosecution or other sanctions.

“These fears have recently been rekindled because the current U.S. attorney general has signaled a departure from the previous administration’s hands-off enforcement stance towards bona fide medical marijuana enterprises.”

Monroe City Manager William Brock offered his municipality’s backing of the payment plan in recent testimony before the committee.

“Monroe considers medical marijuana to be part of the pharmaceutical industry,” he said, noting the southwest Ohio city will have a small medical marijuana grower operating in the community. “We believe this is a strong economic development opportunity that may present positive downstream impacts on research and development in the ongoing commitment to create smarter, more effective medical treatments.”

Brock noted that other proposals for an all-cash system present problems for cities that have been designated to engage in any aspect of the industry.

“While we recognize that the medical marijuana companies will take security measures, we believe it is prudent to also be aware of the potential effects of this on our public safety services,” he said. “To lower the risk of increased crime and the cost of doing business in Ohio, Monroe supports HB 495.”

The bill had not been assigned subsequent hearing at time of publication.

Date Published: March 28, 2018


Copyright © 2018 The Daily Reporter - All Rights Reserved


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