Why the Cannabis Industry is Particularly Vulnerable to Theft and What Can be Done
If you own, manage, or work in the cannabis industry, you’re witnessing the beginning of a burgeoning industry with exciting potential. As with any newly-deregulated industry, ambitious entrepreneurs and businesspeople are moving in to capitalize on some of the opportunities associated with legal cannabis.
While the potential profits are massive, there are significant risks associated with working in the cannabis industry. Some of those risks are well-known (your mind may quickly go to regulatory risk, both at the state and federal level). That said, another prominent risk happens to be theft.
Any business selling a good or product is susceptible to theft, but the cannabis industry is especially vulnerable. Cannabis businesses are so vulnerable that they consider theft a “cost of doing business.” That said, by understanding the problem and taking precautionary steps, you can make it less likely that you are a victim of theft in your cannabis business.
Theft in the Cannabis Industry
A cannabis business is more susceptible to theft for a number of reasons. The most prominent reason is that cannabis businesses are forced to deal only in cash. This is due to the fact that cannabis businesses are legally prohibited from conducting transactions with federally regulated banks. These banks also include state and community banks that are owned by the Federal Reserve System. Simply put, even banks that aren’t federally regulated are hesitant to do business with cannabis businesses, as the Department of Justice has made it easier for federal prosecutors to enforce federal marijuana laws in states that have already legalized the drug.
Because of the lack of access to the banking system, cannabis business owners must take customer payment by cash and must pay their employees with cash. Quite obviously, this leads to a large reserve of cash in a cannabis business as compared to another type of retailer. Knowing that there is an abundance of cash onsite, thieves are thus more likely to target cannabis businesses.
As just one example, in Portland, Oregon, police have reported numerous hold-ups, break-ins, and even murders due to criminals knowing that the cannabis industry operates primarily in cash. Lawmakers have proposed federal legislation called the SAFE Banking Act, which would allow banks to conduct business with state-approved cannabis retailers and growers. Having said that, the legislation has stalled. In the interim, cannabis businesses will have to address the reality that they are especially vulnerable to theft due to the cash-nature of their work.
What Can Be Done?
Considering the reality, what can be done to protect cannabis businesses from theft? There are several steps that you can take.
First, be careful with hiring. While any business owner must trust his or her employees, this is especially crucial for cannabis businesses. As your organization is hiring new employees, ensure that candidates are ethical and trustworthy, especially those that will be handling cash. Putting in this work now will save you from massive headaches down the road.
Next, it helps to have at least two individuals involved in every part of the inventory process. This is not only to ensure that cash isn’t being stolen, but to also ensure that cannabis isn’t being stolen and then later sold to a third-party. While you may have to increase your headcount or give additional responsibilities to your current staff, adopting a “buddy system” in your inventory process can reduce internal theft.
Finally, you can protect yourself from theft by investing in security. At BrickHouse Security, we offer a number of products that can help protect your cannabis business from theft. Some of our products include hidden cameras, alarm systems, and even safes. Ultimately, security is our expertise and we are happy to help you secure your cannabis business.
Secure Your Business Today
While the cannabis business is tremendously exciting, the risks associated with the business are still real. While things like regulatory risks are almost entirely out of your control, you can easily manage and control the security of your physical business. Doing so is a critical task, especially in an industry that is prone to theft.
We would be happy to help you secure your cannabis business. If you have any questions or would like to learn about our products, clickhere or call BrickHouse Security directly at 800-654-7966.