The state Department of Commerce and Consumer Affairs is reassuring banks and other financial institutions that they may open accounts for medical marijuana businesses in Hawaii when dispensaries start operations next year.

Iris Ikeda, DCCA’s commissioner of financial institutions, issued a news release Monday after conducting a series of presentations for the heads of local banks, compliance officers and their attorneys to “address some of their concerns” if they are considering opening these high-risk accounts.

“The question has always been around whether or not banks can open marijuana-related accounts,” she said. “(Federal regulators) want to make it clear that even though marijuana is still a Schedule 1 drug, if they take a risk-based approach, they can open an account. Currently banks are not willing to open the accounts.”

Although 23 states and Washington, D.C., have legalized medical marijuana, cannabis is still a “controlled substance” under federal law, making it illegal to manufacture, distribute or dispense the drug. Most banks won’t touch the business in fear of being charged with money laundering. As a result, most dispensaries don’t have bank accounts, can’t accept credit cards and must pay their bills in cash.

“It’s strictly a cash-and-carry business for them. Banks hate to have to turn this business away, but faced with the risks, I don’t know that they have much choice,” said Ed Pei, executive director of the Hawaii Bankers Association. “The banks face great risk by doing business with medical marijuana dispensaries primarily because of federal statutes, which are inconsistent with state statutes.”

Act 241, adopted this year, authorizes the state Department of Health to issue eight dispensary licenses next year and potentially many more in 2017. Applications for the first eight are due Jan. 29, and each licensee will be allowed to operate two dispensaries and two growing centers: six dispensaries on Oahu, four on Maui, four on Hawaii island and two on Kauai.

Banks already have an “abundance of regulations” regarding high-risk businesses, and if they chose to participate, “there would be a significant burden of daily reporting and tracking of activity for these dispensaries,” Pei said. Additional monitoring would also be costly for financial institutions.

Nationally the burgeoning business of pot is expected to more than double to a $3.5 billion industry this year from $1.5 billion in 2013, according to the ArcView Group, a California-based marijuana research firm.

“At this time we do not plan on providing banking services to medical marijuana dispensaries in Hawaii to remain compliant with federal regulations that govern our bank,” said Wayne Kirihara, Central Pacific Bank’s spokesman. “We are monitoring the positions of both our state and federal regulators going forward.”

Stafford Kiguchi, a Bank of Hawaii spokesman, said financial institutions recognize that there is increasing interest ahead of the deadline to apply for dispensary licenses.

However, he said the recent state law permitting dispensaries does not remove the obligation by a bank to comply with the “significant legal and regulatory reporting requirements relating to money laundering” imposed by the Bank Secrecy Act/Anti-Money Laundering laws and Financial Crimes Enforcement Network.

“This issue is not unique to Hawaii, and we believe authorities recognize the urgency of the matter and are seeking to find a remedy that addresses the concerns of financial institutions across the country,” Kiguchi said. “At this point, without more definitive guidance from federal regulators, we are taking a cautious approach but continuing to stay abreast of the situation and any developments.”

Despite the reluctance among banks, the state may encourage financial institutions in the future to open accounts for legal pot businesses if public safety is at risk due to the amount of cash transactions anticipated to take place in local dispensaries.

“Right now no one’s received a license, so really the pressure is not on banks yet,” Ikeda said. “Once the public safety aspect becomes more heightened, they might be more inclined to take the chance. It will depend on how much (Gov. David Ige) believes banks should be opening theses accounts. Right now he’s neutral. This will keep evolving as time goes on.”