WASHINGTON -- The federal government issued guidelines on Friday that officials said were intended to increase the financial services available to marijuana businesses that are legal under state laws.

Guidelines announced by the Treasury Department and a memo from a top Justice Department official were intended to ease concerns that the federal government would target banks working with marijuana-related businesses that are legal and regulated on the state level. Expanded banking access will enable them to function like traditional businesses, and implementing a reporting structure will allow the federal government to take a close look at how they operate.

Under the Treasury Department's plan, banks would file a "suspicious activity report," or SAR, for a wide range of financial transactions by any marijuana-related business, but they would specify that they did not believe illegal activity beyond simply dealing in the marijuana trade was taking place.

The Justice Department memo falls short of expressly protecting banks that work with state-compliant marijuana businesses from prosecution. It states only that banks working with businesses that don't violate one of DOJ's eight areas of concern related to the pot trade, like distribution of marijuana to minors, violence and the use of firearms, are less likely to be targeted by federal prosecutors.

"If a financial institution or individual offers services to a marijuana-related business whose activities do not implicate any of the eight priority factors, prosecution for those offenses may not be appropriate," Deputy Attorney General James Cole wrote in the memo, which was sent to federal prosecutors across the country on Friday.

While the phrase "may not be appropriate" falls far short of what the marijuana lobby and financial institutions were hoping for -- and the Cole memo didn't state outright that the move was meant to expand banking access for pot shops -- DOJ officials said easing the financial threat to marijuana businesses working in a cash-only environment was their intent.

"The Department shares the concerns of public officials and law enforcement about the public safety risks associated with businesses that handle significant amounts of cash," Justice Department spokeswoman Allison Price said in a statement. "These guidelines, together with the Treasury Department's guidance to financial institutions, are intended to increase the availability of financial services for marijuana businesses -- that are licensed and regulated -- while at the same time preserving and enhancing important law enforcement tools."

State-legal, state-licensed marijuana businesses often don’t have access to traditional banking, and cannot accept credit cards or open simple checking accounts, due to banks' fears that they could be implicated as money launderers. The businesses are forced into cash-only transactions, putting the retailers' safety at risk and creating issues involving taxes and employee payroll.

Treasury officials, based on their conversations with financial institutions, said they anticipated that the guidelines could encourage smaller and medium-sized banks to deal with marijuana businesses.

“While we appreciate the efforts by the Department of Justice and FinCEN, guidance or regulation doesn’t alter the underlying challenge for banks," said Frank Keating, the president and CEO of the American Bankers Association. "As it stands, possession or distribution of marijuana violates federal law, and banks that provide support for those activities face the risk of prosecution and assorted sanctions.”

Richard Riese, vice president of compliance at the ABA, told The Wall Street Journal that bankers are concerned about the legality of working with federally illegal businesses and have questions about how to effectively scrutinize the transactions made.

Bank of America’s policy, for example, has been to not accept any marijuana businesses as customers, and it’s unclear if the guidance proposed is enough to change that.

Currently, 20 states and the District of Columbia have legalized some form of marijuana, be it medical or recreational. The legal marijuana industry is expected to grow to $2.3 billion in 2014 in the U.S.. One study suggests that figure could balloon to over $10 billion by 2019.

“This is an important step,” Rep. Ed Perlmutter (D-Colo.), sponsor of the Marijuana Businesses Access to Banking Act, said in a statement. But Perlmutter also noted that the guidance doesn’t alleviate all liability for financial institutions interested in doing business with marijuana businesses.

“We need Congress to promptly consider and pass my legislation to provide certainty for financial institutions and the licensed marijuana related businesses to operate just like any other business,” Perlmutter added.

Rep. Jared Polis (D-Colo.), a co-sponsor of Perlmutter's banking legislation and sponsor of the Ending Federal Marijuana Prohibition Act, called the guidelines a "huge step in the right direction," but said the federal government's continued stance that marijuana is one of the "most dangerous" drugs needs to be reconsidered.

"The only true way to protect these small business owners is to remove marijuana from the list of schedule 1 narcotics," Polis said.

Dan Riffle, director of federal policies for Marijuana Policy Project, agreed that more needed to be done to resolve the conflicts between federal and state marijuana law.

"Rather than forcing federal agencies to work around our broken marijuana laws, Congress needs to act to permanently fix these problems by ending federal marijuana prohibition and allowing states to regulate marijuana in a manner similar to alcohol," he said.

The Treasury Department guidance: