ALBANY, N.Y. -- New York wants state-chartered banks and credit unions to start providing services to medical marijuana businesses which operate on a cash-only basis because banks are afraid to get involved in the pot industry.

Medical marijuana businesses are forced to pay their employees and taxes with wads of cash, according to memo released today by the state Department of Financial Services.

These cash-only businesses, their employees and customers are in danger of becoming targets of criminals, according to the memo.

Banks are reluctant to do business with medical marijuana providers because marijuana is considered illegal by the federal government which regulates banks.

The department said it will not take any regulatory action against state chartered banks or credit unions that provide services to marijuana businesses as long as they follow federal Financial Crimes Enforcement Network guidelines issued in 2014.

Early this year U.S. Attorney General Jeff Sessions rescinded an Obama administration policy of non-interference with marijuana-friendly state laws.

But the Financial Crimes Enforcement Network guidelines are still in effect. Those guidelines require banks to make sure medical marijuana businesses are licensed before establishing banking relationships with them.

"We're cutting the red tape and removing regulatory barriers to support businesses in the legal cannabis industry," Lieutenant Gov. Kathy Hochul said in a prepared statement. "Today's action to encourage banking relationships will go a long way to assist this emerging sector of our economy."

Medical marijuana became available in New York in 2016.

New York's push to get banks doing business with the pot industry comes at a time when the state is considering legalizing recreational marijuana.

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