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Security threats at a Cannabis Dispensary – What to Watch For

By Jeff Dingle

Security is of the utmost importance in the cannabis industry. The industry is highly regulated and the
sale of cannabis products is strictly controlled, so dispensaries must take specific measures to protect
their products and customers.

Unfortunately we tend to focus on what is in front of us and do not consider all of the potential threats.
The ultimate security goal for a cannabis operation is to prevent and/or reduce loss, which results in
protecting profits.

“Creating a comprehensive security plan is essential to dispensaries for several reasons.” Says Ben
Merritt, Owner and Co-Founder of Growth Security Solutions (GSS) a Northeast based Cannabis security consulting company, “Preventing and reducing loss, protecting profits, and ensuring compliance with regulations are extremely important areas for a cannabis owner to pay attention to.

It’s also important to understand that threats can come from a variety of areas, such as robbery, burglary, employee or insider theft, cyber-attacks, vandalism, and data breaches. For our design and technical team, when developing security procedures and physical security build-outs, it is critical to consider not just what is possible, but also what is probable. This involves creating a secure physical and digital environment, establishing appropriate purchasing & shipping procedures, auditing inventory, and training staff on security procedures.”

Specific threats include:

1. Robbery – “the action of taking property unlawfully from a person or place by force or threat of
force” of cannabis dispensaries is not uncommon. Cannabis businesses are mostly cash, and as such are attractive to robbers. Cannabis businesses are often targeted by criminals looking to make a quick
profit.

2. Burglary – “entry into a building illegally with intent to commit a crime, generally theft” of cannabis
dispensaries is also common. Many people assume that a dispensary is full of cash, and full of cannabis.

Cannabis may be sought for personal use, or to sell. Cannabis is easy to move, unidentifiable as to who
the owner is, and easy to sell on the black market. Generally speaking, robbery is taking something by force FROM A PERSON, while burglary is taking something FROM A BUILDING.

3. Employee theft is a common security threat for cannabis dispensaries as employees may be tempted to steal products, money, or confidential information.

4. Cybersecurity threats, such as ransomware, phishing attacks, and malware, are a growing concern for dispensaries as the industry is increasingly digitized.

5. Vandalism is a security risk for cannabis dispensaries, as criminals may damage property or spray
graffiti on the premises. While vandalism may not be dangerous, it can become very expensive to
remove. Security professionals agree the graffiti should be removed immediately.

6. Data breaches are a major security concern for cannabis dispensaries, as they can result in the theft of customer data or confidential business information.

When dealing with threats, there are two issues to consider, what is POSSIBLE and what is PROBABLE.

Possible is yes or no. Either something is possible or it is not. PROBABILTY is the likelihood that
something will occur. You should be consider all things that are possible, but the greatest effort should
be put toward the things that have the greatest probability.

There are many boiler plate solutions to building a cannabis security program, but boiler plate solutions are not what you need. Every situation is different, and operational plans (including security) really need to be specific to the organization. Generally speaking, there are key areas to consider. The first step in mitigating security threats at a cannabis dispensary is to create a secure physical environment. Install an alarm system and motion sensors, keep all doors and windows locked, and use cameras to monitor the premises. Make sure employees know the security procedures and do regular checks to ensure everything is in order. Additionally, all employees should be required to wear visible
identification at all times, and customers should be asked to present valid identification before entering the dispensary.

The second step is to create a secure digital environment. This involves protecting data, such as
customer information. The dispensary should ideally utilize two-factor authentication for all employee
accounts and data encryption for customer information. Use two-factor authentication for accounts,
secure the network with firewalls, and implement regular software and system updates to protect
against the latest threats. Utilize reliable technology. This includes utilizing a secure point-of-sale (POS) system and implementing strong data security protocols. The POS system should be monitored and updated regularly to ensure it is secure and free of any vulnerabilities.

The third step is to create cash handling policies, procedures and training. Cash handling training is
essential for the cannabis industry due to its unique regulatory and financial environment. Unlike other businesses, many cannabis companies operate in a cash-only environment due to federal regulations that prevent banks from offering financial services to marijuana-related businesses.

This cash-based business model creates several challenges, including the risk of theft, the need for
secure cash handling, and compliance with financial regulations. Cannabis businesses must comply with state and local laws regarding cash handling, such as the reporting of cash transactions over a certain amount.

Cash handling training is vital for the cannabis industry to ensure compliance with financial regulations, reduce the risk of theft, and promote safe and secure cash handling practices. Training should cover topics such as cash management, secure cash handling, record-keeping, and compliance with local and state regulations.

The fourth step is to establish secure purchasing and shipping procedures. Establish protocols for
verifying customer identity and keeping track of orders. When shipping, use tamper-proof packaging
and require a signature for delivery. Consistently train new staff in shipping procedures and make sure
they understand the importance of following them. Regularly review security measures to ensure they
are up to date and train staff on the latest threats.

Businesses should develop a comprehensive security plan that adheres to all applicable laws and
regulations. This includes implementing policies and procedures for employee behavior, customer
access, and product storage.

Merritt further advises “Developing and adhering to policies and procedures for employee behavior,
customer access, and product storage are additional ways to add to a robust security posture, all while
maintaining a comprehensive record-keeping system. A tailored security program is vital for protecting products and customers, and the success of any cannabis operation depends on implementing and maintaining proper security measures.

The dispensary should have a comprehensive record-keeping system to ensure that all transactions are
properly tracked and monitored. Management should regularly review and update their security policies and procedures to ensure that they are effective and up-to-date.

By implementing these security measures, businesses can significantly reduce the risk of security
threats. Cannabis dispensaries must take extra precautions to protect their customers, employees, and
products, as they are subject to a variety of risks. By utilizing reliable technology, creating a safe working environment, and adhering to all applicable laws and regulations, businesses can ensure that their dispensary is secure and free from potential threats.

Jeff Dingle

Jeff Dingle

Jeff Dingle is a career security professional specializing in high risk/high threat operations. His experience includes senior management positions with the federal government, casinos and FORTUNE 15 companies. He can be reached at [email protected].

 

This Post Has One Comment
  1. If I may add to Employee Theft and “step 3” of Data Breaches:
    – 90% is employee theft in more conventional retail operations. I feel it’s higher in cannabis businesses, as I haven’t heard of a single customer who has checked-in with their photo ID flip the script and rob the place. I have, however, heard of 40, 50, 100 lbs of flower disappearing. Who was responsible? Lower-level management and employees, with poor decision-making.
    – Limit cash drawer limits, and have secondary witness (manager, security) supervise cash counts, refills, and drops to a designated safe for that manager. Maintain paper, wet-ink, logs of these activities, in addition to any electronic reporting.
    – As a former vault custodian at WAMU eons ago – Ensure you have safes that only your security company can open. There are plenty of vendors out there. If not feasible, have multiple safes that only high-level mangers have access to, in a secured room. Next – as mentioned briefly above, assign specific safes to each of the managers on duty for cash drops and drawer refills, but don’t share safes – just as it’s best not to share cash drawers.
    – Regarding receiving inventory, I’ve found matching a purchase order to the METRC manifest is an initial step, but, taking the few extra minutes to physically count the units one is taking receipt of can maintain solid inventory-control procedures. Restricting this duty to management is vital, and just like cash drawer drops, requires a second person there to witness the activity, optimally a physical hand-written log as well.

    Deterring Robbery and Vandalism
    – My recommendations are to always have at least 2 security guards on site during business hours, and a 24-hr security monitoring and response company on contract as well.
    – 1 guard Never leaves the lobby, the other can be on roving patrols, presence patrols, and assisting cash or inventory activity as supervision in addition to security.
    – Cyclically, optimally hourly or more frequently, a security guard needs to conduct a “presence patrol,” of the permiter of the property, and parking lot. This is not only to see and be seen, but to re-assure the customers they are patrons of a quality store.
    – Establish with your terms of service with the security guard / private patrol operator that their guards are not to over-associate or in other words “make friends,” with overly friendly patrons. This is an established form of casing a retail establishment, by befriending security and/or engaging them in cooperation. Intra-company cohesion and friendliness, cooperation and a positive work environment is not the topic, it’s keeping “scouts” from gleaning actionable information from The Person who’s area of purview is to dissuade and prevent crime – spotting scouts is one method.
    – Conduct inventory control protocols such as bi-weekly or monthly full-store physical inventory counts. In the interim between full physical inventory counts, conduct cycle counts by filter – let’s say by vendor/brand, as one, and my preferred is by item category. Cycle count all vapes Monday, all topicals Tuesday, pre-rolls Wednesday, and so on. The alternative of brand is suggested as some Point-of-sale software providers do provide great reports, and ad hoc reporting modules – whereas some are light, and need some development. Regardless, cycle counts every day and full-physical inventory counts every 2 or 4 weeks will yield tight inventory control, satisfying owners that all is well, and in the event of a pop-up inspection or audit, records are “audit-ready.”

    I hope this helps expand a bit; keep up the good work!!

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