This startup wants to solve the No. 1 problem in the legal-marijuana industry

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colorado dispensary

AP Photo/David Zalubowski

In this photograph taken on November 20, 2014, bud tenders Maxwell Bradford, left, and Emma Attolini display buds in the shape of Christmas trees that are on sale for the holiday season in a recreational-marijuana shop in northwest Denver.

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The marijuana industry faces a huge problem: Few banks will touch cannabis cash.

Even though big bucks are on the line - Colorado is predicted to pull in more than $140 million from taxes on marijuana sales in 2016 alone - marijuana is still classified as a Schedule I drug at a the federal level.

Most banks don't want to deal with that kind of risk, forcing dispensaries to operate on an all-cash basis.

"There's still a great stigma in the banking community around marijuana. It's palpable," says Jeff Foster, a cofounder of Jane, a startup that provides hardware and software for cash-management solutions for marijuana companies.

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That makes everything from paying taxes to tracking sales exceedingly difficult.

Beyond the difficulties of paying taxes in pure cash, serious security issues arise. It's not uncommon for dispensaries to employ armored cars to ferry around their employees.

How Jane works

Enter Jane. The company was founded by Foster and Yves Yon and is led by David Ellerstein, the current CEO. The idea came to Foster after watching some Netflix documentaries about marijuana prohibition.

Cannabis, Business, Expo, Marijuana

Courtney Verrill

A Jane kiosk.

Jane kiosks are placed in dispensaries, and customers can simply come in, place their orders on the touch screen (or from an app on their phone), insert their cash, and take a receipt to pick up their product. The company has already started rolling out machines around Colorado.

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The cash is held securely within the machine, and the receipts allow dispensaries to precisely track payments and inventory. It's basically like a marijuana ATM machine - in reverse.

The kiosks themselves are manufactured in Colorado for around $15,000 a piece, according to Foster.

In addition cash solution, another part of Jane's mission seeks to rectify the cannabis industry's problems of retail shrinkage - the loss of inventory between what's been recorded and what's actually there.

Any retail store that deals with cash, whether it's a shoe store or a liquor store, will lose a certain percentage of their inventory to shrinkage, according to Foster. Shrinkage amounted to a $45.2 billion loss for retailers across the country in 2015, according to the National Retail Federation.

The loss of inventory and money due to shrinkage creates a huge problem for the marijuana industry, particularly because it's an all-cash industry, according to Foster.

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Though Foster couldn't provide specific numbers, he estimated that dispensaries lose "well over 6%" of their inventory annually due to shrinkage.

This is often through employees giving their friends discounts, or outright stealing product, according to Marijuana Business Daily.

"We've been through a number of different business models," Foster said. "And in every model we worked on, eliminating the shrinkage makes it worth it for a dispensary to lease a Jane kiosk."

Kiosks run a bit steep - between $2,495 and $3,495 a month, depending on the services that the dispensaries use. And though the company has faced some challenges convincing dispensaries to lease them, the expense always pays off for the dispensaries, Foster said.

Adding legitimacy to the marijuana business

The government has made some moves to fix the banking issues. For example, Senate Appropriations Committee voted in June to allow banks to handle cannabis cash. But it will likely be a long time until legal-marijuana businesses are banked.

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"Banks are among the most conservative organizations in the world. They detest gray area," Foster said. "They're not trying to stem the tide of the legalization movement, but they do have some serious concerns about how these transactions are taking place."

marijuana dispensary

Reuters/Robert Galbraith

A cash transaction for medical marijuana is shown at Coffeehouse Blue Sky in Oakland, California, July 23, 2009.

Foster, who has worked in the retail-payment processing and risk-management field for decades, thinks that until banks are absolutely positive their concerns about the marijuana industry can be addressed - specifically mechanisms that allow banks to audit dispensaries - they simply won't be interested.

"If you opened a shoe store and ran it exactly the same way a marijuana dispensary is forced to operate today, banks probably wouldn't work with you either," Foster said.

With Jane, banks can simply go online, look at a dispensary, and see all the cash coming in. Furthermore, banks can actually see these transactions tracked back to the original seed number that's been brought into inventory, according to Foster.

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Beyond managing the often-complex cash payment process for marijuana, Jane is trying to build out express ordering for dispensaries. Think along the lines of the Starbucks app - except for pot.

Jane's business in the future will be "heavily weighted towards express ordering and pre-ordering" and "adding convenience to relieve congestion," Foster said.

For dispensaries, the busiest hours are after work, between 4:00 p.m. and 7:00 p.m. - what Foster calls "Christmas season." During peak hours, Jane can help streamline the ordering process and cut down on wait times.

Other companies that work in the financial and IT services side of the marijuana industry feel good about Jane too.

"Jane offers a great cash-management solution, and we certainly recommend them to our clients," said Jessica Billingsley, the COO of MJ Freeway, a cannabis-specific consulting and IT firm based in Colorado. Full disclosure: MJ Freeway and Jane are entering a strategic partnership.

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Dispensary owners in Colorado especially have already reaped the benefits of Jane.

"I think the best thing for us is to allow our regular customers to have an opportunity to not have to wait in line," Anne Gordon, the owner of Herban Underground, told CNBC in June. "And we know who they are; they come in and everything is ready to go."

It's a big step toward bringing financial maturity to the marijuana industry.