Security Planning is Critical to the Success of Your Cannabis Business

Jake Johnson

Jake Johnson explains just how critical security planning is in the cannabis industry and what precautions he recommends.

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Congratulations! You’ve decided to launch a marijuana cultivation, dispensary or other cannabis business. You’ve raised investment capital, selected one or several locations and may even know which strains you want to start with. If you’ve done your homework, then you know that security planning and operations, among several other factors, will be critical to your success.

Security Is Not a “Check-the-Box” Task for Cannabis Establishments

Since 2012, our security risk planners, engineers and architects have helped many teams in multiple states, like New York, Illinois and California, develop security plans supporting state-specific licensing applications for cannabis cultivation and distribution centers. They have also helped design plans for new or renovated commercial centers to support all facets of the cannabis business. One of the first things we tell new clients is that security must be considered from the very earliest stages of the venture, for several reasons.

Security Is Integral to Your Business License Application

Your security plan is a crucial component of your application and must be drafted with care, detail and expertise. Integration with your core operating processes is vital but often overlooked until late in the process. Ultimately, experts on your team who know the business side of cannabis (e.g., how to grow, harvest, store and sell) don’t typically understand the security issues. And your security experts have rarely earned any experience in the legal cannabis domain.

On one of our recent engagements, we were asked to join just as the architects had finished the construction drawings for a new cannabis cultivation center, right before the license application was submitted to the state. We pointed out that the surveillance and security monitoring system would unfortunately create a huge bottleneck in a key operating process. “But we haven’t designed those yet,” the business side explained. “That’s our point,” we emphasized, as the architectural team went back to the drawing boards. The best security should not impede operational flows.

Cannabis Is a Cash Business, and Cash Comes with a Special Set of Risks

A marijuana business’s highest risk will always be violence and theft of products or money. Because marijuana is still on the federal schedule of illegal drugs, banks and credit unions are prohibited from doing business with legitimate marijuana businesses legally operating in their states. The risk of money laundering charges is just too great. Therefore, legal cannabis businesses are forced into an all-cash operating environment. Until Congress passes the SAFE Banking Act, allowing banks and credit unions to provide financial services to legitimate marijuana businesses in compliance with state law, marijuana will remain an all-cash business, which carries high risks of break-ins, theft and violence.

Recent examples of security incidents include the following:

  • In April 2021, a bystander was shot in Colorado Springs when he tried to stop a man who was attempting to break into a medical dispensary by ramming his car into the building.
  • In April 2022, a man was shot in Oakland, California, by a group of four people trying to break into a dispensary in Oakland in the early morning hours.

Security Oversights and Missteps Can Result in Compliance-Related Consequences

Another risk to cannabis businesses is falling out of compliance with state and local laws and regulations. For instance, in some states, marijuana businesses are regulated by the state’s department of agriculture. In others, marijuana regulations fall under the purview of health and human services. Furthermore, legislatures in some states have passed laws allowing municipalities to impress additional regulations upon marijuana businesses.

Six Steps for Effective Security Design, Installation and Operation

1. Invite security experts to your planning table from the very beginning. Don’t risk being turned down for your business application for a security issue. And don’t take the chance that your expensive new building must undergo a retrofit to accommodate the best balance between security requirements and operating efficiencies.

2. Vet your security experts carefully. Ensure that they have appropriate credentials in security and understand security requirements and applications in a cannabis environment.

3. Determine your operating workflows before your construction drawings are complete. Even if doing so is not a requirement for your business license application, you need to understand exactly how your core activities are going to map across your physical footprint. Your security consultant will be able to advise you on setup issues such as ATM security, interior and exterior cameras, the best type of safe for your business, loading dock procedures, and building security measures.

4. Conduct thorough background checks before hiring all employees, and update with periodic reviews. Don’t just settle for a basic criminal check. Make sure to check into credit history, any history of being sued for nonpayment of debts, and signs that an employee may be a risk around a lot of cash or product they can sell on the street. Update these reviews every year.

5. Establish a relationship with your local first responders, especially police and fire. We help clients do this on a regular basis. Keep in mind that law enforcement officers have often spent their entire careers enforcing drug laws for marijuana use and possession. They’re now having to adjust their mindset and procedures in a significant way. We find that they’re greatly comforted to discover that cannabis businesses have security personnel with extensive security and law enforcement experience.

6. Have your security consultant present whenever city councils or zoning boards are meeting to discuss your cannabis application. It helps ease their mind to have another security professional to talk with who speaks their language and can assure them that your business takes security and safety seriously.

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