As you know, there has been a rash of armed robberies targeting the cannabis industry. Let’s talk about why this is happening and provide some practical solutions for preventing robberies and reducing losses.
Why Dispensaries?
There’s no extraordinary malice involved with cannabis robberies. They are increasing simply because other businesses have reduced cash on hand, while cannabis is the only legal business that must rely on cash for a majority of its transactions.
Can you recall the last time you paid cash for fuel, groceries or a hotel room? Today, almost all we use are debit cards, credit cards and digital payment services. As we use cash less often, stores have less cash on hand. Also, stores learned a long time ago to install extensive security systems with video capabilities, along with drop safes that prevent theft of more than a minimal amount of cash.
While gas stations, convenience stores and liquor stores used to be prime robbery targets, they have lost their luster among the world’s criminals.
Thanks to the ongoing federal illegality of cannabis that inhibits access to most banking services, cannabis dispensaries are flush with cash. Add a hefty supply of weed on premises and you easily have prime robbery targets.
Solutions and Suggestions
If the federal government would allow cannabis businesses access to banking services, this wouldn’t be an issue. But, until such time as it does, we have to figure out other ways to make cannabis dispensaries less attractive as robbery targets. The key is to reduce cash on hand. Here are several ideas for cannabis retailers to consider when creating their robbery risk management plans (please remember that it is up to you to make sure you are compliant with state and local laws):
– Crypto, Venmo and CashApp can work: Currently, dispensaries do not generally accept cryptocurrency, but there are a few that have started, so it is definitely something to consider. Accepting crypto would eliminate — or at least significantly reduce — cash on hand, as would using other digital payment systems like CashApp or Venmo.
– Private or pre-paid accounts: Just like the old timey hardware store you may have once frequented, we think that having accounts with regular and loyal customers could be effective. In fact, it may even help in building relationships with your customers.
How could a prepaid credit line work? Let’s say a customer agrees to spend $500 a month. They are billed and charged on the first of the month, and they pay their bill digitally with a debit card or other payment system. This is a win-win for the retailer. The money is transferred digitally, and the retailer practically has a guaranteed sale each month. Again, cash on-hand would be reduced — at least in jurisdictions that allow these types of payment plans.
– Give tourism companies a piece of the pie: If anyone is doing this, we find no evidence of it, but we think the perfect partnership for a cannabis dispensary is to work with a tourism company to provide an amount of product to each tourist who visits. This can be bundled in with the entire package the tourist is buying, and you can even build in a discount to the consumer and a commission to the tour operator. The tour operator then pays you with a debit card or an electronic funds transfer once a month or at some other regular interval, rather than you processing all the individual transactions from these tourists. This is a win-win-win situation because all three parties benefit.
– Look at the banks: Even if you’ve only seen it in the movies, bank security techniques make so much sense. They limit access to cash, while also giving every employee access to a call button for emergencies. They have trackers that go in the money bags. If you aren’t already exploring those as options, you really should be.
– Drop safes, multiple safes and signage: Look at the best practices of the convenience store industry. Big signs boasting “Employee Cannot Open Safe” are backed up by drop safes that employees truly cannot access. It also goes without saying that armored car services should be used to transport your cash.
– Employee training: Okay, we admit you can’t reduce cash on hand just by educating employees, but it is still very important to train your staff on what to do in a robbery situation. We don’t want or need any heroes, and all employees should know their life is the most important thing to save if they are ever placed in a dangerous situation. You also need to make sure that you have a zero-tolerance policy for concealed weapons on the part of your employees. Again, we don’t need heroes potentially making a bid situation worse.
We believe there are numerous creative solutions to this problem, and these are just a few of them. What other ideas have you come up with? Share yours by emailing brenda@riskedstrategies.com.
Brenda Wells, Ph.D., CPCU, AAI, CRIS is the Robert F. Bird Distinguished Professor of Risk and Insurance at East Carolina University and the owner of Risk Education Strategies. She has published numerous articles on the risk management implications of cannabis legalization and is a sought-after expert in the risk management and insurance field. She can be reached at brenda@riskedstrategies.com.
Marla Royne Stafford, Ph.D., is the William F. Harrah Distinguished Chair and Professor of Marketing at the University of Nevada-Las Vegas. She is the owner and president of MBR Enterprises, a full-service marketing and advertising consulting firm. She has published numerous articles on advertising strategies and societal marketing issues and is a sought-after advertising and marketing consultant and keynote speaker. She can be reached at marlaroynestafford@gmail.com.