Operating as a multi-billion dollar industry while on the wrong side of federal law, the cannabis industry faces unique challenges and heightened risks. As states have legalized cannabis for either medical or recreational use, regulators in these states have taken a myriad of approaches to required security measures, often leaving businesses struggling to best protect their assets against risk while remaining compliant.
MANAGING RISKS IN CANNABIS
Cannabis businesses can face any number of potential adverse events, from fires and floods to medical emergencies and active shooters. Being prepared for these events is critical for the safety of your business, your employees, and your customers.
One of the biggest threats to cannabis businesses remains theft. Dispensaries are an especially attractive target since they remain mostly a cash business. Once the Secure and Fair Enforcement (SAFE) Banking Act is passed, financial services will be more available to dispensaries. Reducing the amount of cash on hand will minimize the motivation of thieves to strike. Until then, on-site security and off-site asset storage are the industry’s best defenses against theft.
It isn’t just cash that thieves target. Cannabis products are also lucrative because they can be easily turned around on the black market. This makes cannabis cultivators a target for theft as well.
STATE-BY-STATE SECURITY REGULATIONS
These risk factors mean that security requirements for the cannabis industry are a necessity to protect businesses and to keep legal cannabis products out of the illicit market. In many jurisdictions, these security requirements can be strict and complicated. They also differ from state to state, further complicating compliance efforts.
For better or for worse, there are no federal regulations for security measures in state legal cannabis markets. Although legalization is moving forward at the state level all around the country, it is still too soon to expect federal level guidance or regulation on topics like security.
For larger multi-state operators, it can be a challenge remaining compliant with a varied, and often changing, set of state level regulations. Failure to follow the cannabis regulations in your market can lead to hefty fines and even loss of license.
Although we won’t be detailing the individual regulations in every legal cannabis state, here are some important security highlights that are required in most states.
ACCESS CONTROL
Access control is the prevention of unauthorized persons from entering restricted areas. Measures to moderate access include external and internal barriers and security checkpoints that prevent unauthorized access. In some markets, a simple keypad lock is sufficient. In others, states require biometric access points to be implemented. It is also important to maintain an up-to-date list of employees with access to sensitive areas or security systems.
ALARM SYSTEMS
An effective deterrent, alarm systems are often the first step in securing your business against intruders. Alarms that are connected remotely to a call center shortens response time and ensures that the correct response team is sent. Tying automated locks to alarm systems provides an additional layer of security and can prevent further access to sensitive locations within your property.
VIDEO SURVEILLANCE
Many states mandate video surveillance at cannabis businesses like dispensaries and cultivation centers. Some even go so far as to stipulate factors like length of storage and video resolution. Security professionals can help you ensure that these cameras are installed to give you clear sightlines and comprehensive coverage as required by most state regulations.
SECURITY PERSONNEL
On-site security staff offer frontline defense against intruders and ensure you have a rapid response to incidents. Many states don’t stipulate the need for a security guard to be on location. Other jurisdictions require security personnel to be on hand – though, even here there is a differing approach. Some locales require a guard to be armed, and some prohibit guards from carrying a firearm.
CASH/ASSET PROTECTION
For the time being, cannabis retail will remain a largely cash business. However, keeping significant amounts of cash on hand puts your assets at unnecessary risk and invites crime. With banking services unavailable to many cannabis businesses, security partners with the ability to transport and store cash prevents this asset from being exposed to potential theft.
STAFF TRAINING
Regular staff security and safety training prepares your team to react appropriately when an incident happens. This added awareness can prevent dangerous situations from turning violent and protects the safety of all those involved.
CHOOSING EXPERIENCED CANNABIS SECURITY
Although these are common security requirements, the individual regulations in your own state may differ or maintain unique requirements. For cannabis businesses, especially new businesses, it’s critical to find a security solutions partner with experience servicing the cannabis industry and intimate knowledge of cannabis regulations by state.
If your security partner is not familiar with all state and local level security requirements, they may fail to follow them precisely when designing and installing your security system. Not only does this amplify risks for your business, it can also force costly fixes or prevent licensing.
Operational Security Solutions (OSS) is a risk management company focused on high-risk industries like cannabis. Our experienced team of security specialists have worked with hundreds of clients to design and implement security solutions in their high-risk businesses.
OSS can work with your company from the beginning to create a comprehensive security system designed for your business needs and state security requirements. Our security consultants can assist you in preparing business applications, site security plans, cannabis use permits, and more. Hands-on facility planning means that security measures can be built into your property as it is developed to harden it against internal and external threats. Mobile-integrated security allows you to check on your property anytime, anywhere. Armed or unarmed security guards further protect your assets on-site, while the transportation and storage of cash minimizes the potential for theft. Through this multi-faceted approach, OSS can help your business manage risk while remaining compliant at every stage.
