DENVER – A federal judge will decide whether Colorado’s marijuana industry must continue to deal in cash or if money generated from the sale of a drug that remains illegal under federal law can enter the U.S. banking system.

U.S. District Judge R. Brooke Jackson said during oral arguments Monday at the Alfred A. Arraj United States Courthouse that federal guidelines on legalized marijuana in a handful of states equate to a strategy of “put our head in the sand and all this will go away.”

Jackson heard from an attorney for Fourth Corner Credit Union, a pot bank that is suing for access to systems managed by the Federal Reserve. An attorney for the Federal Reserve Bank of Kansas City, meanwhile, maintained it is too risky to get involved with an industry that is violating federal law.

Colorado voters legalized recreational marijuana in 2012. Along with the legalized grows, sales and possession of pot have come a string of related industry groups and law firms. Fourth Corner Credit Union was established to meet their banking needs.

Mark Goldfogel, executive vice president of industry relations for the credit union, said that most of the industry is dealing in cash because banks routinely deny or close their accounts.

“It’s going to be a $1.2 billion industry in 2016 regardless of this judge’s decision,” Goldfogel said after the hearing. “With that much cash floating around, someone is going to die and then we’ll be able to open.”

Many from the industry have expressed concern over carrying large amounts of cash and even having to pay taxes in cash.

Part of the argument presented Monday is that those taxes being paid on marijuana sales also should be causing a headache for financial institutions that do business with the state of Colorado, and any counties or municipalities that have legalized marijuana.

Jackson sounded sympathetic to the argument but repeatedly said his responsibility was to answer the legal question and not to solve a fairness issue.

“My job is to enforce and apply the law,” he said.

The judge and both attorneys bemoaned the lack of action by Congress on this issue that could clarify the legality of banks accepting money from the industry.

Jackson even noted that it was rare in Colorado for Democrats and Republicans to agree on an issue, but that they seem to agree on the need for a legitimate banking system for the industry.

While Colorado lawmakers have tackled the issue, it’s been unable to get traction in Washington, D.C.

Jackson said he would write an opinion in the case rather than ruling from the bench so that the losing side will have it in writing when it chooses to appeal. His decision could come at any time.

–

The Associated Press contributed to this story.