Federal regulators have a rejected a bid by the marijuana industry in states where it has been legalized from using the U.S. financial system on the grounds that pot is still an illegal drug on a federal level.

The U.S. Federal Reserve and the National Credit Union Administration blocked applications from Fourth Corner Credit Union out of Colorado, which is now appealing to a federal judge, according to an Associated Press report.

The credit union wants to help the pot industry stop relying on cash and start using the regulated banking system, but the illegality of the drug on a federal level makes it difficult, even though the drug has been legalized by the state of Colorado and other states.

That means pot businesses have to jump through lots of banking hoops in order to pay their bills and store their funds. They have had to do things like use money orders to pay electricity bills, or even squirt Febreze on money that smells like marijuana, according to the report.

Last year, the U.S. Treasury Department issued some guidelines on how banks should deal with pot money, but most large banks feel that the regulations are irritating and not worth their time, and therefore they refuse deposits related to the marijuana industry. It’s why Colorado banking regulators had proposed a credit union like Fourth Corner.

Fourth Corner would have enabled pot businesses to use checking accounts as well as access business lines of credit. Doing business strictly in cash also presents a security risk for both businesses and its customers.

Some financial institutions have worked with the marijuana industry, but the drug’s federal status makes it a very difficult situation for the industry.