Legalization is upon us. Marijuana, once an illicit substance and now a slowly legalized medicinal substance, is the next big business, and companies are flocking to the industry to be the first to take advantage.

One by one, they’re finding their money troubles multiplying. Not lack of money. Having too much.

That’s right. Companies are making too much money, and it turns out that due to old laws still on the books, companies are having trouble finding banks and other financial institutions willing to host cash made in the marijuana industry.

Marijuana and Finance: a complicated history

Although it’s legal in many places, the world of finance is slow to catch up. Marijuana is still illegal on the federal level, and banks are reluctant to accept money made in the industry for fear of being shut down. This ban is the same at all stages of the industry from growers to consumers.

Cash business is difficult. It makes it hard for growers to price their products and for consumers to purchase. “It’s the biggest problem we have,” said Taylor West, deputy director of the National Cannabis Industry Association.

Dealing only in cash puts business and consumers at risk for theft and creates issues in keeping industry practice above board. It’s difficult to report earnings for taxes, for instance. It’s difficult for dispensaries to pay employees. Everything that a financial institution provides from security to transparency is missing.

Legalization shows no signs of slowing down with even residents of the most federal city in the country, Washington D.C., recently voting to decriminalize possession and transfer of small amounts.

What it takes to finance marijuana

Marijuana is still classified as a federal Schedule 1 drug, the same category as harder drugs. This prevents any financial institution that depends on the Federal Reserve from accepting any funds directly or indirectly from the industry.

Banks fear that opening business to the marijuana industry will run them afoul of this law and shut them down. It’s not worth the risk, so most just ban marijuana money. The latest count suggested that around 105 banks and credit unions, out of some 100,000 in the US, accept money from the industry.

New laws passed recently are meant to allay banks’ fears. Banks must report money coming from the industry and that their customers comply with state laws. The Justice Department also directed U.S. attorneys not to pursue banks that adhere to these rules.

This hasn’t eased fear. A better way to do that is to downgrade marijuana’s drug classification to get around the old federal laws, something advocates are hoping for in the coming years as the industry continues to legalize. They also want to see states made into safe havens from the Controlled Substances Act.

Financing a billion dollar business

Some banks and credit unions are risking everything to open their doors to marijuana business. Some states and financial institutions are trying to get ahead of the problem without federal help.

One credit union in Washington State, Salel Credit, is one of the few institutions that have opened its doors to the industry. It’s a complicated process and one that is slow in implementation.

Large amounts of cash coming into these small branches does put employees at risk. The extra expense of precautions like armored cars is worth it for the banks, however, as they stand to house a lot of money in what’s become a billion dollar industry.

Right now, space is limited for these customers as banks cope with the changes. In the future, banks already participating hope to expand what they can offer to other customers.

Other types of finance have made their mark on the industry as well. Cryptocurrencies, which aren’t subject to federal regulations in the way that fiat money is are offering alternatives to traditional banking that businesses and consumers can use to finance the business and exchange currency for goods.

This might just be the beginning of a takeover of traditional finance from a radical new currency idea housed in networks of computer servers.

The irony of transparency

The formerly underground business is trying to go mainstream, but the biggest blocks to transparency still lie in old federal regulations that prevent companies from taking advantage of above board finance options.

Advocates are hoping that laws coming will change the ways that the industry and its consumers can do business and finally take marijuana from shadows into the light. Until the fed makes some changes, however, the continuing problem of too much money will haunt the industry.