SACRAMENTO (CBS13) — California regulators are only months away from finalizing rules for the multibillion-dollar recreational marijuana industry. But when it comes to what to do with all the money, the options still hinge on the reluctant federal government.

According to the feds, cannabis is an illegal drug, meaning any business dealing with the product is also against the law in their eyes. Bank access is nearly impossible. Cultivators, dispensaries and other cannabis-related companies are dealing with large amounts of cash that will only grow.

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“We are in the dark ages for it,” said one cultivator, “all cash.”

Any private bank that is insured by the federal government can’t knowingly touch cannabis cash. Company payroll, taxes, finances are all conducted in cash. It’s a topic discussed monthly by a committee including members of the Board of Equalization: how to handle the flood of money soon to flow.

“I think people get a little fed up and they want an alternative that is going to be easy transparent and affordable,” said Fiona Ma, with the state Board of Equalization.

She says the idea of a public state-run bank, free from federal control is gaining traction.

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“This would be a long-term solution, and there needs to be a commitment from the state,” said Ma.

She explained that a state bank would be owned by the public and able to issue loans and accept deposits from taxpayers. It could be run by government officials and set up in a way that would funnel profits to the people. Marijuana would be allowed.

“What’s unclear is how they could be able to do this,” said Beth Mills with the California Bankers Association.

She says public funds could be at risk without federal insurance for each dollar. Plus, cannabis businesses are still illegal by federal government standards. The federal government hasn’t shown much interest in changing that fact.

“Right now, the state law has put itself in conflict with federal law,” said Mills.

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The Cannabis Banking Working Group will release their findings at the end of the month. Their final meeting is scheduled for September. The final regulations for the recreational marijuana industry must be in place by Jan 1.