Legal marijuana is a rapidly-growing reality. Four states, including Oregon and Washington, have legalized recreational use of the drug. Several more – including California – could well do so by the end of next year. Forty states have legalized it in some form for medicinal use.

Now, US Senators from Oregon, Washington and Colorado hope to start breaking down the federal barriers that lock many legal cannabis businesses out of routine banking and financial services.

When you start a business, one of the first things you do is set up bank accounts. But for a lot of budding entrepreneurs in states with legal marijuana markets, that’s often nearly impossible.

Matt Price owns Cannabliss, a medical marijuana dispensary with two locations in Portland and a third in Eugene. Price says local bankers have been willing to open accounts for him. But …

Matt Price: “As soon as corporate gets any wind that you’re in the cannabis industry, they end up just shutting your banking down.”

Price has had his accounts shut down twice, which he describes as “a real nightmare.”

Matt Price: “Sometimes they’ll hold your money for up to a month. And just because your bank accounts aren’t able to function anymore doesn’t mean that you don’t still have to pay your employees or keep the lights on or pay your rent or anything of that nature.”

Price is far from alone. According to the Oakland-based ArcView Group – a leading cannabis research and investment firm – the legal pot market in the US was worth $2.7 billion last year. The group projects it will grow to nearly $4.5 billion by 2016. And right now, because banks are leery of dealing with the industry, much of that business is being conducted in cash.

Oregon Senator Ron Wyden says that needs to change.

Ron Wyden: “By compelling Oregon business owners to operate on a cash-only basis, current federal laws are making marijuana businesses sitting ducks for violent crimes and perpetuating negative stereotypes. It is ridiculous to make any business owner carry duffle bags of cash just to pay their taxes.”

Oregon Senator Jeff Merkley says lack of access to banking undermines the new industry’s legitimacy.

Jeff Merkley: “Operating by cash is just an invitation to criminal activity and malfeasance. It’s not a good way of doing business.”

Merkley and Wyden are joined by Washington senator Patty Murray and both of Colorado’s senators in sponsoring a bill that would prevent bank regulators from penalizing banks that do business with the cannabis industry.

Linda Navarro heads the Oregon Bankers’ Association. She says many banks would be happy to offer services to legal marijuana business owners like Matt Price.

Linda Navarro: “It’s a matter of the regulatory structure that banks have to follow at the federal level. Marijuana-related businesses are treated much different by the regulators than other types of legal businesses.”

The basic problem, of course, is that while states are legalizing marijuana, the drug is still very illegal under federal law. In 2013, the Justice Department sought to reassure states that as long as they met a list of criteria – such as keeping pot away from kids and preventing it from leaking across state lines – the feds would keep hands off.

Then, the financial crimes arm of the Treasury Department released an elaborate system of rules, requiring banks to frequently monitor and report on their cannabis-related business customers.

But Linda Navarro says these awkward legal workarounds aren’t having the intended effect.

Linda Navarro: “Frankly they just bring to light the regulatory scrutiny that banks are under when they’re serving these businesses. It’s much higher, and the compliance burden is much more challenging.”

Exhibit A is the Gresham, Oregon-based MBank. The small community bank put out the welcome mat and quickly became the go-to bank for the cannabis industry in Oregon. But last spring, MBank closed all its cannabis accounts, saying the cost of jumping through all the federal hoops was too high.

Linda Navarro says the Merkley bill is a move in the right direction, but she thinks until marijuana is federally legal, it’ll have limited success in coaxing banks to take on cannabis businesses.

Meanwhile, dispensary owner Matt Price says the government needs to step up to the plate.

Matt Price: “If they want us to be able to run these businesses responsibly, they need to allow us banking so that everything is completely aboveboard.”

The bill itself has yet been scheduled for a hearing, but similar language was adopted as an amendment to the pending financial services appropriations bill.