The U.S. government has opened a new line of business for America’s biggest banks, and for once they don’t want it. Little wonder: It’s cash from legalized marijuana.

The financial-crimes arm of the Treasury Department is making it easier to deposit the fledgling industry’s growing revenue, at last count nearly $3 billion annually and almost all in cash. The government wants to tax the revenue and keep it away from organized crime. And it figures banks with strong compliance departments can best help it track the money.

At the same time, federal bank regulators have remained silent on the issue, raising the specter that banks could run afoul of federal drug laws if they accept the cash. That’s left the banking industry dazed and confused about what to do even as legal marijuana sellers in 23 states and the District of Columbia are faced with mountains of cash piling up in warehouses and basement vaults.

“More than 200 million Americans live in states where there is some form of legal marijuana,” said U.S. Representative Earl Blumenauer, an Oregon Democrat, who is pushing a bill on marijuana taxation. “It’s a disservice to these business people to deny them normal access to banking services.”

Marijuana Cookies

It’s been just over one year since the Financial Crime Enforcement Network, also known as FinCEN, first provided instructions to banks on how they can both accept marijuana business dollars and still comply with the law. Since then, the industry has been surging. It’s getting financing from investment funds and pot icons like Willie Nelson and the estate of Bob Marley are pitching new products. Yet few banks have opened their doors, prompting some 100 business people from the cannabis industry to descend on Washington last month to lobby Congress for greater access to banking.

The pressure couldn’t come soon enough. With billions in cash from lawful sales of weed and marijuana cookies and sweets stranded outside the banking system, cash can’t be monitored by banks for possible illegal activity. Local officials in communities where marijuana is legal are also concerned that large stashes of cash in warehouses, businesses and homes could create public safety issues, possibly leading to violent robberies or worse.

To minimize those risks, FinCEN officials, in meetings with bank executives to discuss a broad array of business activity outside the banking industry, are reminding them about the marijuana directive, according to a person familiar with the matter.

FinCEN Directive

In a nutshell, FinCEN’s directive provides a workaround of federal drug laws, requiring banks to file compliance reports, also known as suspicious activity reports, or SARs, on each customer. In the SARs, banks must categorize those businesses in one of three categories: those in good standing, those that warrant closer monitoring and those on customers whose accounts the banks have cut off.