Colorado U.S. Sen. Cory Gardner on Tuesday accused the federal government of endangering the public by refusing to recognize the marijuana industry as a legitimate business enterprise.

“In short, the states are leading on this issue and the federal government has failed to respond,” Gardner said. “It has closed its eyes and plugged its ears and pretended the issue will go away.

“It won’t.”

He testified during a hearing of the Senate Banking, Housing and Urban Affairs Committee as it considers whether to approve the Secure And Fair Enforcement (SAFE) Banking Act.

The proposed legislation would give marijuana businesses access to bank services, including loans, credit cards and savings accounts.

Federal law now forbids banks from dealing with marijuana businesses. They are forced to make nearly all their transactions in cash.

As a result, the federal government is inadvertently encouraging thefts from marijuana dispensaries, sometimes with violent and deadly outcomes, Gardner, a Republican, said.

“Stockpiles of cash make the industry a target for thieves,” Gardner said.

He mentioned the example of 24-year-old Marine veteran who was shot and killed in 2016 by robbers while working as a security guard at a marijuana dispensary in Aurora.

Thirty-three states have legalized medical marijuana, while 11 allow regulated recreational use.

“What makes the current situation intolerable and untenable is the disconnect between federal and state law,” Gardner said.

Marijuana transactions in Colorado’s $1.5 billion cannabis industry are legal under state law but illegal under federal law, he said. As a result, law firms, accountants, landlords and others risk becoming federal criminals for serving their clients among marijuana businesses.

“Banks will not accept [marijuana] industry money for fear of regulatory action or federal forfeiture,” Gardner said.

Joanne Sherwood, chief executive officer of Denver-based CityWide Banks, said giving marijuana businesses access to banks would increase tax collection and make the industry more financially transparent.

Under current federal law, the businesses often pay their taxes in cash at Internal Revenue Service offices, sometimes bringing in thousands of dollars in backpacks or duffel bags.

“Processing such paper-based returns costs the IRS nearly 17 times more compared to an e-filed return, and sometimes requires local tax offices to invest in additional security measures because of the cash payments,” Sherwood said.

In addition, cash transactions make it easier for the businesses to hide their income, she said.

“The city of Sacramento, for example, estimated that cannabis dispensaries are underpaying their taxes by up to $9 million per year due to poor recordkeeping or filing of inaccurate financial statements with local tax collectors,” Sherwood said.

John Lord, owner of cannabis cultivator, manufacturer and retailer LivWell Enlightened Health, said the SAFE Banking Act could give guidance to an industry filled with uncertainties by differences in state and federal laws.

In one case, he said he was compelled to carry $3 million in cash to the Denver IRS office to pay his company’s taxes because federal law discourages his business but state law legalized it.

“It took more than three hours for them to count it all,” he said.

A guidance last year from the Treasury Department’s Financial Crimes Enforcement Network clarified services financial institutions can offer marijuana businesses, but legal obstacles remain, Lord said.

LivWell Enlightened Health runs 15 retail dispensaries throughout Colorado. The company operates with more than 600 employees and earns revenue of about $100 million a year.

The strongest opposition to banking services for marijuana businesses came from Garth Van Meter, a spokesman for the anti-marijuana advocacy group Smart Approaches to Marijuana.

He told the Senate committee that risks of addiction and threats to public health that could be promoted by the SAFE Banking Act make it a bad idea.

Smart Approaches to Marijuana “believes no one should be locked up or have the rest of their life ruined just because they got caught with a joint, but we should also not create a new addiction-for-profit industry in the model of Big Tobacco,” Van Meter said.

The Senate hearing took place days after Colorado’s attorney general joined counterparts from 33 other states in a letter to the Food and Drug Administration urging the agency to regulate cannabis-derived products like cannabidiol.

The attorneys general also asked that states be allowed to maintain regulatory control over the emerging market for products derived from the cannabis plant.