This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

Please enable Javascript to watch this video

DENVER -- Marijuana dispensaries, strip clubs, and liquor stores – you name the vice – Colorado welfare recipients are using tax money to enjoy them.

Fox31 Denver’s investigative team first revealed how welfare debit cards were used at ATMs inside at least 19 separate pot shops just in the month of January.

Now we learn some Colorado lawmakers are worried the state risks losing hundreds of millions of dollars in federal low-income, community funding if they don’t figure out how to stop welfare abuses.

It's against both federal and state law to use a Quest welfare debit card and pull cash out of an ATM at a liquor store, but Fox31 Denver found more than a hundred such transactions last month alone.

Records show a few welfare recipients also used ATMs inside strip clubs, pulling money from a tax funded account aimed at helping needy families.

The same scenario occurred at nearly two-dozen marijuana dispensaries. The proof is in the cash receipts we acquired under the Colorado Open Records Act.

Marijuana dispensary owner Tim Cullen, who didn't install a private ATM inside his store like many other pot retailers, says his colleagues better watch out.

“I guess I'm not shocked that you found that, but I'm a little bit disappointed,” Cullen told Fox31 Denver after seeing our initial ATM welfare cash for pot story.

“We'd like to avoid the federal government shutting down this amazing experiment that's been really successful in Colorado - based on the actions of a few individuals.”

According to some lawmakers, the U.S. Department of Health and Human Services has already warned Colorado; it needs to take welfare abuse prevention seriously or risk losing enormous amounts of low income program grant money.

State Senator Vicki Marble says Democrats killed her bill last month that would have made strip clubs and pot dispensary ATMs off limits for welfare recipients.

“This bill will come back next year and with the work you're doing - I can't thank you enough because it's work like that that proves it's a necessary bill to pass.”

We asked Democratic leadership for comment, but were not granted an interview.

State House minority leader, Representative Brian Del Grosso, R-Loveland, says it’s been a frustrating process to not be able to create what he sees as common sense rules to deter welfare abuse.

"Under current law you cannot use those inside a casino or liquor stores or bars so we try to say, 'You know what - this marijuana industry is new and why should we not line that up with what we have in current law.'"

Fox31 Denver discovered another problem that might need addressing before any agency can properly monitor where welfare debit cards are being used.

Colorado does not regulate private ATM machines -- the kind we found in nearly every marijuana retailer and liquor store we visited.

That's a serious concern for the feds who want to monitor any signs of money laundering.