23 min read
Cannabis Security Compliance. The Ultimate Guide
Introduction & Cannabis industry overview
These days, the cannabis industry is one of the most profitable and fastest-growing industries in the U.S. In 2020, legal cannabis sales were about $17.5 billion. According to Cowen, they can reach $100 billion by 2030. Not bad at all, if you ask us!
The states that have legalized marijuana see cannabis dispensaries as necessary and highly important businesses. The reason for this opinion is quite simple – cannabis is beneficial when it comes to relieving stress and easing chronic pain, especially during unstable COVID-19 times.
As good as it may sound, an increase in the number of new dispensaries has inevitably led to one huge negative outcome. Even though many states where cannabis is legal have lower prices and make marijuana products affordable for those in need of them, a high rate of crime is one of the biggest problems threatening the industry’s well-being. Theft across warehouses and dispensaries is an issue one cannot ignore.
Unfortunately, if you are a dispensary owner, you are in far more considerable danger. Dispensaries are seen as easy and more valuable targets for criminals. There is more cash on hand and more ways to outplay security measures. The problem with cash is the result of the U.S. banking system not willing to cooperate with the cannabis industry. Even though marijuana has been legalized in many states, it remains illegal at the federal level. So, federal laws govern any actions of financial institutions. Now, hopes are high that this situation will change for the better if the Secure And Fair Enforcement (SAFE) Banking Act is approved. In this case, banks and other financial institutions will be more willing to work with cannabis dispensaries. As a result, there will be less cash for thieves to steal.
The things that can be stolen from cannabis dispensaries are not limited to cash only. The product itself is in danger as it can be sold by thieves later. For higher prices, of course. Basically, everything inside the dispensary has to be taken into account and protected 24/7.
No need to panic! Various cannabis security measures are the solution you need to be safe and sound. State regulations have security requirements and usually can deny a license unless all of them are met. However, they vary from state to state and can be rather complicated. Hiring a professional attorney is one way to understand them and ensure that all the necessary dispensary security measures are in place. Also, don’t forget that failing to meet the state requirements will result in fines and various penalties. The way we see it, cannabis dispensary owners have more than enough reasons to obey and follow the rules. After all, as difficult as they may sound, they are for your own good, as well as your dispensary’s safety and prosperity.
In the most practical sense, we highly advise never to skimp on dispensary security solutions. The more modern and advanced they are, the smaller the chances of you being robbed. The more time you spend getting acquainted with state regulations, the better you are prepared for any unforeseen circumstances or regular audits. Let’s have a closer look at these regulations as well as the most helpful ways to meet them and ensure that every single item and dollar at your disposal is under protection.
What are the federal regulations for cannabis security?
Cannabis security is not regulated at the federal level, period. Is it for better or for worse? Well, on the one side, it gives room to a great deal of variation among cannabis regulations and fewer reasons to feel stressed out waiting for audits. On the flip side, the lack of federal regulation leads to a certain degree of confusion. Different states have different laws. If you have a chain of dispensaries in more than one, trying to follow them can be a real challenge. Not to mention the consequences of failing to adapt to any of them.
There are reasons to believe this is going to change sooner or later. When the 2018 Farm Bill was signed, some cannabis products were descheduled from the Controlled Substances Act. It was the first time something like this happened, and, as many hope, far from the last. Some people see it as a crucially important step toward decriminalization. Others are not so sure because even though the 2018 Farm Bill is set to create more opportunities for hemp production, it doesn’t really help producers grow cannabis as freely as any other crop. Sadly so, but the great changes are yet to come.
What are the state compliance regulations for cannabis security?
State compliance regulations are what you need to focus on. Not only do they play a big role from your very first attempt to get a license till the first working day of your dispensary, but they also never cease to amaze you in terms of diversity and complexity. Tough cookies they are.
Compliance regulations are different in every state, that’s for sure. However, some requirements are the same:
- You need to provide security operations documentation (both operational procedures and system specifications) to get a marijuana license.
- There has to be sufficient building access control. It is essential to ensure that no unauthorized people can enter any areas containing marijuana.
- You must keep various records of information in safety.
- If there has been a theft, product loss, or breach, you must notify an appropriate regulatory agency immediately or within a specific timeframe required by your state.
- Storage systems must be highly secured.
- A video surveillance system is a must. The same goes for the monitoring and storage of video surveillance recordings.
- An alarm system is another must-have.
- Security personnel must be at the storefront of the dispensary. In some cases during the operating hours, in others even 24/7.
Don’t forget that these are just the most common state-mandated security requirements. Every state has its regulations and rules that must be explored and followed. On top of that, there are also regulations at the municipal levels that you must take into account.
How much security does a cannabis business need?
It goes without saying that any cannabis business requires a pretty sufficient amount of security. Not only due to state regulations and laws, but simply because without it, your cannabis business may be in great danger.
Specifics of cannabis security systems can vary not only from state to state. Various types and locations of businesses also have different requirements. For instance, there is a difference between the security measures necessary for breeders, dispensary owners, cultivators, and manufacturers. Overall, you must ensure:
- Regulated marijuana access
- Secure handling, storage, and transportation of product
- Tracked inventory
- Timely notifications in case of security incidents
- Stores and protected digital records
What are the penalties for lack of compliance?
Not only do cannabis security systems protect your money and product, but they also ensure safety for your staff. And you need people focused on their primary job responsibilities instead of constantly worried ones. They feel secure and provide better customer service, which, in turn, leads to higher income. Win-win, by all accounts.
Don’t forget that people tend to put more trust into compliant businesses with good reputations. It is one more solid reason to take marijuana security regulations seriously. Like it or not, they are for your own sake.
Violation of cannabis security regulations is a sure way to put your business in trouble. If we can say so in a situation like this, the best-case scenario is that you get fined. The worst is that you can lose your license. There is even a possibility of a prison sentence. The punishment depends on the type of incident or the state where your cannabis business is. Obviously, there is no need to let any of these happen to you.
How are cannabis security systems different from standard security systems?
You may wonder if cannabis security systems are different from standard ones, and it’s a fair question. Well, in terms of hardware and software, there might be no significant difference. However, the situation is slightly different when it comes to their purpose. To cut it short, cannabis security systems must both protect against theft and ensure compliance. Some highly-regulated industries can have similar security systems, but there are still specific distinctions between them and standard ones.
Cannabis security systems need to have:
- More cameras, higher video quality, as well as more storage footage. In other words, they are expected to have more comprehensive surveillance capabilities in comparison to standard security cameras.
- More substantial building access control safety features. It’s essential due to regulated access being the cornerstone of cannabis compliance and security.
- Much more detailed system documentation. It’s another aspect that is necessary because of compliance requirements.
What digital security systems are needed for cannabis?
We have already discussed the importance of the right cannabis security system and the possible adverse outcomes of its absence. So, what are the main types of these systems?
- Video surveillance systems
For starters, they can help you capture suspicious incidents whenever and wherever they take place. They also come in handy to keep an eye on every part of your business premises, POS (Point of Sales) machines, and so on. Hidden cameras are a great way to prevent crimes committed by your frequent customers and employees who already know the location of the main ones. It’s worth mentioning that about 90% of losses in marijuana dispensaries result from employee theft. Sad as it may sound, you can never fully trust anyone, even in your dispensary.
- Building access control systems
The primary goal is to prevent unauthorized individuals from going into the parts of your dispensary where they shouldn’t be. You need the ones that are cloud-based, scalable, and can be easily managed. Such cloud-based access control systems can centralize security management, significantly simplify it, and connect access control with video surveillance, sensors, and alarms.
- Alarm and notification systems
There is no better way to protect your entries and exits and thus enhance overall security. Alarm and notification systems also provide you with cutting-edge monitoring capabilities and ways to eliminate the risk of key duplication or unauthorized entries.
- Network systems
First of all, they allow you to identify potential threats and prevent them in time. Second of all, they are relatively easy to manage. Moreover, they help increase security and productivity. You have everything you need to protect your network and your business.
What physical security services are needed for cannabis?
Currently, some states require both digital and physical security systems. It means that you also need to hire security personnel to meet these requirements.
For instance, in California, guards have to be at the retail site 24/7. According to Section 5045 of the Bureau of Cannabis Control’s Emergency Regulations, “A retail licensee or microbusiness licensee that is engaged in the retail sale shall hire or contract for security personnel to provide security services for the licensed retail premises. All security personnel hired or contracted for by the licensee shall comply with Chapters 11.4 and 11.5 of Division 3 of the Business and Professions code.”
In other states, the situation can be different. So, never underestimate the importance of finding and checking every detail regarding security and compliance. If you are not sure whether there is such a rule in your state, we strongly recommend that you research it and find a definite answer.
Integrated Designs For High Level Security
Secure building design plays an important role in preventing shrinkage, thefts, or even well-planned heists. Doesn’t matter what kind of interior you have or what goes well with the colours of your walls – ensuring security is your number one priority when designing a dispensary.
At the very beginning, it’s important to specify to architects what kind of cannabis business you have. For instance, warehouses and dispensaries have several prominent differences in security requirements. That’s why such details must be discussed first and foremost.
In general, any type of cannabis business must have video surveillance both inside and outside. All areas inside and around the perimeter of your dispensary must be covered. Fingerprint-scanning biometric technology, specialized entrance locking systems, and security doors are also of utmost importance. To be on the safe side, you can have them supervised by security personnel 24/7. No measures are excessive in this case.
Some people are sure that security measures and attractive interior design cannot cooperate. Well, they are definitely wrong. There is no need to focus entirely on security or deliberately avoid adding important elements to ensure complete safety or enticing aesthetics. You can have it all without unnecessary sacrifices.
If you are worried that security cameras do not align with the overall design, you can always hide them. This will be helpful both for maintaining the consistency of your interior and for ensuring that not everyone knows the location of your surveillance system. As for the bullet resistant glass, no effort is needed at all – it is already in disguise. When choosing security doors, take a chance on concealed rolling doors. They can be hidden in the ceiling while the customers are in.
Don’t forget that many states require restricted access to certain parts of grow operations, warehouses, and dispensaries. They aim to reduce the possibility of internal theft.
Do you need access control for cannabis security?
The question is rhetorical. We have already mentioned the importance of access control for cannabis security a couple of times and will repeat – yes, it’s out of the question.
All states require access control and there is even documentation on how to provide and support it. Access control protects the most important rooms in your establishment, so one more level of security can be a game-changer when there is a possible threat to your product or cash.
If you want, you can choose who has access to any particular rooms or areas. You can also make use of reporting capabilities to know who and when entered any room. So, if there is an internal theft, it will be easier to detect the one responsible for it.
Rolling Grilles And Doors Deter Dispensary Theft
A need to protect high-value products and a fair amount of cash at any cost can be a real challenge. Not to mention that a dispensary is a retail business, so you shouldn’t forget about the importance of adhering to egress and fire codes as well. In addition to finding a compromise when choosing an appealing design for your establishment and trying to take into account all cannabis security requirements at the same time.
That’s when rolling security grilles come into play. They are perfect for protecting both the front of your dispensary and the counter. And they won’t pose a threat to the aesthetics of your interior as they can be easily concealed when there is no need for them. They also don’t require a lot of ceiling room.
The same goes for heavy-duty rolling doors. You can ask architects to set these rolling doors in such a way that they can easily coil up into the door’s header while being behind an exterior soffit. Just make sure if your building code allows it. In general, you need them to defend the glass storefront and stop thieves from breaking into your establishment. They can also provide a secured look to frighten off any intruders.
Robust Visible Protection For Grow Operations And Warehouses
The situation is a bit different for warehouses and grow operations. They don’t need to look appealing to customers, so you can go for choosing and installing more visible security doors.
Their design considerations are also quite different from the ones that dispensaries have. One of the reasons is the building layout. Warehouses require different rooms for different types of product, sometimes really spacious ones. Another reason is production needs. Grow operations need much more space for plants and equipment and special lighting. In these cases, heavy duty rolling security doors must be much stronger and have another type of design. For example, with heavier gauge links and solid rods being spaced closer than standard ones.
Grow operations and warehouses usually have utility areas because they rely on humidity controls, temperature controls, and water mains. So, you can also use rolling doors to block employee access to such areas. No one with ill intentions will damage products or ruin crops and you won’t face financial losses. All of your bases will be covered. And again, you don’t even need to hide these rolling doors. The more visible they are, the better everyone understands that there’s no way they can mess with you.
Access control for dispensary and cannabis security systems
The majority of businesses have different combinations of access control and surveillance to ensure overall security of their buildings. Cannabis businesses, however, require much stricter measures. Access control in this case must be cloud-based, provide scalability, and be easy to manage.
Cloud-based access control solutions significantly simplify security management while also centralizing it. As a side bonus, you also get a possibility to connect access control with your alarms, video surveillance systems, and sensors detecting motion or vibrations as well as gunshots and glass break.
What are the video surveillance requirements for cannabis companies?
No matter what your cannabis business is, always stick to state and local regulations. Video surveillance requirements are different in each state, though they cover the same points:
- As a rule, cannabis must be recorded at all stages of business processes. The location and number of cameras are different.
- Video footage must be of a certain quality which also varies from state to state.
- There can be a requirement stating that your security staff must monitor your video feed. In some states the monitoring process also has to be 24/7.
- There is an appropriate length of time during which you must store the footage. In some states you must store the footage for 30 days, in others for a longer period of time.
- The period of time during which cannabis is recorded is one more essential requirement. Sometimes you can be expected not to turn cameras off even when the store is closed and there are no customers.
We know that sometimes business owners can focus solely on the budget and decide to save some money on video surveillance systems. This is the opposite of a brilliant idea. Cheap systems cannot meet all requirements, so you will not be able to stay compliant and play by the rules. In addition to that, you might put your business in great danger failing to provide the needed protection and level of security.
Don’t forget the fact that modern cannabis video surveillance systems also have remote monitoring. Anytime you feel uneasy about anything going on in your establishment, you can check the cameras wherever you are and heave a sigh of relief or start acting immediately. It is especially crucial these days when we tend to spend more time at home due to the situation with COVID-19.
How can cannabis businesses prevent employee theft / Security Risks & Threats?
The thing is, any security systems you buy or install can turn out to be completely useless without the needed monitoring. Suppose your employees are unaware of the right policies and procedures and simply don’t understand their importance. In that case, your business must be utterly neglected and insecure in the face of thefts and other possible dangers.
The first step towards minimizing such risks is doing background checks before hiring new employees. Unfortunately, the biggest part of dispensary losses is the result of employee theft, so you cannot avoid doing this. Before hiring a new employee, check whether they have any criminal background, poor credit history, damaged driving record, or any other sources of concern. Some states even have special compliance rules regarding the hiring process, so it has to be done for sure. However, revealing any of these doesn’t necessarily mean that you shouldn’t hire this person. Such things can be strictly individual or, on the contrary, not depend on your opinion at all – in case they are a part of your state compliance regulations. Sometimes the best decision is to hire a professional cannabis security company or consultant to run these checks for you.
You need to pay attention to proper employee training on the use of surveillance systems and access control. Make sure they know the risks of non-compliance after getting acquainted with all the applicable cannabis security regulations. Your employees also have to know how to behave in unforeseen situations and respond to different types of potential threats.
If you are equipped with the right cannabis security system, you are protected against outsider and employee theft. As good as it may sound, there is no reason to relax. Problems may occur even when your employees have spotless backgrounds and seem reliable enough. Even a limited number of loyalty programs or discounts specifically for your staff can play a big role. Never underestimate the power of proper HR practices.
Another thing to consider is secure marijuana transportation. The product is in demand and rather pricey, so it’s a highly desirable target for criminals. And here, you need another level of security.
If you’re responsible for cannabis transportation, ensure you have at least the essential security equipment – GPS tracking, bullet-resistant finishes, and streaming video feeding directly to you or your security staff. If you don’t want to be responsible for this, you need to hire transportation-focused companies specializing in cannabis and medical transport. It can be especially helpful at the very beginning when you’ve just started your business and don’t have time or enough knowledge to manage everything yourself.
Proper training is also needed to avoid any product damage or loss. Sometimes problems occur simply because of employees not knowing or understanding all internal processes. For instance, poorly handled inventory audits can lead to severe product loss and discrepancies. The only thing to do here is to provide proper training right after hiring a new employee or getting new software and hardware.
Lots of rules can seem pretty obvious to you but clearing some areas and making sure they are obvious to your staff is always the right thing to do. Feel free to remind your employees that selling to themselves or making discounts for their friends or family is out of the question. The earlier you clarify such things, the better. Their onboarding is the right time to do it for the first time.
What equipment is needed to store cannabis securely?
Not only does your establishment need protection, but so does every single item stored and sold on its premises. Of course, the regulations are not the same in different states. It’s not the first time we mention how confusing adapting to all these peculiarities and differences throughout the country can be. However, some fundamental rules are pretty much the same wherever you open your dispensary.
For starters, you must have locked retail containers like display cases or cabinets. They are used in the main area of your dispensary where customers can see the product. Then, you need locked storage containers to store cannabis and cannabis products in discrete areas of your dispensary. And don’t forget about access control at each entry point. All areas where you demonstrate or keep cannabis must have locked and monitored doors. So, you can both take care of your cannabis security and keep an eye on who and when enters which area.
Types of cannabis security plans
To get a state license, you must have a cannabis security plan first. It has to be precise and include every rule and procedure designed to eliminate any risks in terms of security and compliance. All of these details must match with your floor-plan and actual business operations, so there is no way you can let yourself slack off.
So far, we have already explained how important meeting all security requirements in this business is. What with employee theft or robberies, you can never feel too confident that everything is under your control. That’s why don’t look at the necessity to provide a thorough security plan as one more obstacle on your way to finally making money instead of constantly spending it on all the needed equipment. See it as your shield and loyal companion in the cannabis world where complete security is a much desired ideal.
Let’s start with a dispensary security plan. We would like to focus on the most essential requirements to take into account:
- A dispensary security plan must stick to federal and state regulations.
- You need to assign responsibility to stakeholders.
- It must include a risk assessment showing that you are aware of the challenges and threats in the industry.
- There should be a framework explaining how you will deal with these risks and challenges.
- Most importantly, your dispensary security plan has to be scalable so as to meet future demand in the cannabis industry.
The situation with marijuana grow operations is a bit different. Even though there is slightly low foot traffic and not as many cash transactions as in dispensaries, you shouldn’t neglect the security of these facilities. Product damage or loss can even lead to a loss of license, not to mention monetary damages. So, there are also various essential things you need to include in your plan:
- Trace and track procedures detailing how you are going to track your products.
- Local marijuana cultivation regulations to know which ones apply to your business and the consequences of not following them.
- Security equipment explaining what things you will use to protect your establishment and meet cannabis security requirements.
- Site assessment showing site-specific security risks as well as giving extra information on the area where your facility will be located.
- Employee identification as a part of the security system.
- Access control telling who and how will be able to access farm and cultivation sites and providing other important data.
- Professional cannabis security services to help lower the risks of installing cannabis security systems in the wrong way or failing to protect the property in general.
It doesn’t matter whether you have a dispensary or a grow operation or a warehouse. A solid cannabis security plan is a must in any case. Following all federal and state compliance regulations doesn’t have to be a heavy burden – you should see it as an additional motivation to secure your establishment while doing it the right way. Ensuring the security of your dispensary is also not a thing to save money on. Unfortunately, the less you spend on the needed equipment and procedures now, the more you might lose in the future in case something unexpected happens. And in the industry growing so incredibly fast, crimes are a common thing. So, the only way to prevent something like this from happening to you is to take matters into your own hands and start working on your business security from the very beginning.