Hundreds of ATMs located in medical marijuana dispensaries — the lifeblood of businesses otherwise forced to work in cash — were shut down Wednesday, just days after similar machines were unplugged from recreational shops.

The machines in Colorado and Washington were connected to a network served by South Dakota-based MetaBank, which in January warned ATM providers by e-mail that machines located in marijuana shops violated federal banking rules.

But the machines, both cashless and the traditional cash-dispensing variety, continued to work until this week, according to owners of cannabis shops affected by the shutdown.

A spokesman for MetaBank and its parent company, Meta Financial Group, did not immediately respond to requests for comment Thursday. MetaBank’s electronic arm, Meta Payment Systems, is the largest ATM sponsor in the country.

“Just like that, it was out of commission,” said Andy Williams, who owns Medicine Man, a recreational and medicinal marijuana dispensary in Denver that has an on-site cash-dispensing ATM. “I got a warning the night before saying they’d lost their bank, and that was it.”

Marijuana Industry Group executive director Michael Elliott said a number of the trade group’s clients lost stand-alone machines that dispense bills, as well as key-padded devices that are found at checkout counters and don’t spit out cash.

One industry insider said he learned that Meta Payment Systems found that a number of ATM providers that contracted with them had placed machines in dispensaries, and then attempted to sidestep Meta’s earlier warnings by improperly identifying those businesses.

“There was no real way for anyone to know who had the machines or where they were,” the insider said, refusing to be identified because banks’ contracts are protected by federal law.

Deactivation of the machines comes just days after several Colorado bankers said they’ve gotten quiet approval from regulators to continue working with marijuana clients as long as they monitored those accounts.

“This isn’t about bank accounts. It’s about a merchant processor who simply decided to stop processing,” said Ean Seeb, co-owner of Denver Relief, where a number of cashless ATMs were deactivated Wednesday.

Seeb said Denver Relief was warned by the merchant provider that the machines used for recreational sales would be taken off-line.

“Then we got word that they were all going down,” he said Thursday.

The provider maintains its own bank account with MetaBank, which is its access point to the nation’s financial system. The provider, Seeb said, was to have a new bank working with them late Thursday.

Cashless ATMs work differently from those that dispense currency, allowing customers to be charged for a transaction directly through a credit or debit card using a PIN rather than a signature. The transaction is recorded as a cash advance and does not route through the same system as when a user signs a receipt.

Not all shops were affected, although providers estimated it to be in the hundreds and perhaps impacting shops in more than just the two states where recreational sales of marijuana is legal. Those tied to a different bank network were able to process transactions Thursday.

MetaBank told providers in January that machines could not be located in marijuana businesses because the sale and consumption of pot and infused products remains illegal under federal laws.

“MetaBank, as a federally chartered bank subject to federal banking regulation, cannot sponsor ATM terminals that are deployed in any business establishment that distributes marijuana,” according to the e-mail.

But the relationship remained quiet and unaffected, mostly because banks rely on ATM providers to monitor and track a machine’s location. ATMs are unregulated in Colorado, so there is no one agency or bank that knows where they all are located.

Several dispensaries were able to avoid the prohibition by working with neighboring businesses — such as hair salons and bookstores — that installed ATMs that dispensed cash.

But cashless systems are preferred since they can be used at the point of sale.

“When a patient or customer is ready to complete a transaction, they swipe their debit card or credit card through the cashless ATM terminal and enter the transaction amount,” said Lance Ott, co-owner of Guardian Data Systems, a Vancouver, Wash., company that provides payment processing for marijuana businesses. “They are prompted to enter their PIN number and accept a service charge.”

David Migoya: 303-954-1506, dmigoya@denverpost.com or twitter.com/davidmigoya