Several entrepreneurs are capitalizing on the enormous pool of opportunity brought about by the legalization of cannabis in a number of states.
However, to protect the investment, you must know that from cultivation, harvesting, testing, and storing to delivering or dispensary, security risks are present in every external and internal sector of the business.
The risks in the cannabis industry can root in improper storage systems of cash or product, lack of effective personnel protocols, inadequate alarm systems, insufficient security camera coverage, or not complying with insurance requirements.
We have listed five potential cannabis security risks and provided experts’ advice on how to mitigate them to stay on the legal path while protecting the business from unwanted events.
Risk 1: Lack of Strong Employee Protocols:
If you want to start your own cannabis business, you need a strong employee protocol to save you from employing any potential threat to your business.
Employee protocols include checking employees’ clothing and bags when entering or exiting the facility. Again, it also requires doing a background check on the employee to determine whether they have any prior criminal records of theft, robbery, or addiction to cannabis.
Impact: Can Harm Workplace Safety:
An employment department in any industry without a proper employee protocol can lead to employment hazards. You may appoint someone with criminal records who ends up tampering with products, theft, and causing life-threatening situations for the other workers.
How to Mitigate: Strictly Follow the Protocols:
One can consider the following suggestions to ensure workplace security:
- Establishing effective employee practices to monitor attendance and overall workflow of an employee during their stay in the factory,
- Providing work gear to wear during working hours and stored inside the facility,
- Monitor check-in and check-out timing, and
- Checking every employee in the middle of every shift change and room change.
Risk 2: Security threats in the Inventory and Vault:
Even when you employ someone with a clean criminal record, there is no guarantee that they will not commit any crime during their working period.
Whether your business is manufacturing cannabis for medical or recreational purposes, the chances of any employee being addicted or selling it to other addicts are relatively high in the business.
Employees have the products in their possession, manage the cash registers, and are knowledgeable about the business’ internal dynamics. Cannabis firms must have safeguards in place to prevent theft by employees.
Impacts: Product Tampering, Robbery, or Trespassing May Occur:
Since the employees have access to all the major places in the factory, they can cause many criminal offenses. For example-
- Repeating minor offenses,
- Violating security rules,
- Causing major financial displacement,
- Displacing raw materials and stealing them later,
- Conducting work disorderly creates confusion,
- Handling sensitive material without any authorization, and
- Creating diversions with unusual behavioral concerns.
How to Mitigate: Install A Critical Security Framework:
Experts generally develop cannabis shop security plans according to the standards, long-established effective guidelines, and best practices in the security operations of different organizations.
Hence, you can rely on the following suggestions to keep the security system of the cannabis factory under control.
● Integrate Efficient Security Gadgets
Installing high-quality security equipment is another investment in your business. Installing the gadgets is better than regretting and losing materials later.
Install security cameras that record 3 or more frames per second with a motion-based recording feature and alarm. Video quality must be at least 2MP IP (1920×1080) to enhance the images and recognize faces.
If possible, add microphones with the security cam. And don’t forget to check whether you have full coverage of the production floor, inventory, warehouse, and cash counter.
Make it obvious in the whole factory that every inch of the floor is under surveillance 24/7. Even if you have one or two security guards outside of the facility, install a security cam to monitor the entry and exit of every person.
● Have Separate Inventory and Cash Register Security Plan:
There have been countless incidents where criminals smash the doors or windows of a cannabis factory to steal. Therefore, strengthening the inventory and cash security plan can be helpful.
You can install safes that contain TL-30 or TL-30×6 UL ratings and weighs 750 pounds for your cannabis factory, as these doors can resist forced entry successfully. It is capable of resisting entry for thirty minutes regardless of attack with electric tools, carbide drills, picking tools, grinding points, common hand tools, abrasive power saw, cutting wheels, or pressure-applying devices.
Moreover, try to upgrade the security system after one or two years with new technological devices. Ensure you have all the data of the security cam for any potential need in a future incident.
Risk 3: Risk of Cyber-Attacks
Even though you are trying to ensure the physical security of your cannabis business, the risk of cyberattacks remains on top of potential risks.
You may think that cyber crimes are only a threat to users for digital transactions. It is, however, more than a concern for customers and your credit accounts.
Impacts: Hack Financial and Customer Database and Automated Systems:
When hackers infiltrate your company’s virtual system, they impose the following threats:
- They gain access to the customer database (name and financial details), PII (Personally Identifiable Information), or medical customer ID. As a business owner, you need to consider these pieces of information as classified data under HIPAA regulations.
Hence violating the regulation can lead to a criminal offense.
- It is possible to sabotage a facility’s security system remotely after hacking. The hacker can help his associates to enter and exit the facility without triggering the security alarm.
- If your cultivation depends on an automated method, the hackers can alter the features, for example, time of irrigation or lighting. Delaying these features can hamper the growth of the plant.
How to Mitigate: Contact a Cyber Security Professional:
The hackers can enter your computer through a third-party attack in a local area network or simply a phishing email.
Unfortunately, the blessings of technology may turn into a threat to you when someone tries to breach your system by hacking. Therefore, you need a smart protection system and Cyber Security professionals’ assistance to protect data and business.
A professional cyber security service can provide you with the following:
- Developing policy, programs, and training,
- Creates a backup system,
- Monitors all the virtual resources,
- Tests the system for any threat,
- Scans the dark web for any hints of attack, and
- Knows how to track and respond during and after a Cyber-attack.
Furthermore, you can figure out the best ways to order cannabis online and let your consumers know that your service is safe and secure from cyber-attack.
Risk 4: Failure to Comply with Insurance Requirements:
There is rarely any business that is free from risk factors. Therefore, when you are planning to run a cannabis factory, you need to work on the best insurance policy to secure the products.
Impact: Vulnerable Business Structure:
You may think your system will become invincible after all the security systems you have plugged in. In the cannabis business, not even professionals will give you such assurance.
Therefore, the business becomes vulnerable when it faces any difficulty or hard situation. From natural disasters, fire, or security breaches, anything can happen that can threaten your business, and failure to insure your project will lead to the ultimate termination of the production.
How to Mitigate: Expand Insurance Coverage and Meet the Standards:
It is hard to find knowledgeable and experienced insurance companies. However, more insurers are joining the fray as many states plan to legalize the business.
In that case, ensure that your broker understands the legal issues, knows the risks of the business, and offers enough coverage for the potential damages so that you don’t need to worry.
To insure your cannabis business, you must ensure the minimum business insurance requirements. The requirements, however, vary greatly from one state’s law to another.
For example, there are no specific requirements for such insurance in Arizona, Hawaii, or Kansas. On the contrary, General liability insurance of a total of $2 million, where $1 million per loss is required, and a $5000 surety bond is required to get cannabis business insurance in California.
What you must do to protect your business is:
- Create an in-house team to find, prepare and manage the compliance according to your state’s law,
- Contact a professional insurance broker to assess the risk areas and take suggestions on cannabis security risks and how to mitigate them.
Risk 5: Failure to Comply with Regulations:
It is difficult for cannabis businesses to remain in compliance with the law because the rules are different from one state to the next and are subject to regular revision. There may be significant penalties for violating state regulations.
For example, before investing in the cannabis business in Tennessee, you need to know everything about the medical marijuana laws in Tennessee.
Impacts: Authority May Mark Your Business as an Illegal One:
Many consumers and owners aren’t aware of the potentially serious risk of breaking consumption regulations. Businesses that demonstrate the least dedication to strict compliance or receive the most community complaints will likely be the first targets of federal authorities who decide to crack down.
How to mitigate: Follow SOP, Conduct Audits, and Train employees:
To mitigate the risks related to regulation, you must ensure the following factors:
- Follow SOP or standard operating procedure in the production house and inventory,
- Monitor the security system closely and physically so that entry of anyone can be prohibited,
- Conduct online training sessions on the state laws and monitor that your employees are following the laws.
- Be sure you comprehend all local, state, and federal laws and regulations and create the processes necessary to abide by them.
- Ensure transparency throughout the process of making cannabis-based drugs or recreational products,
- Establish an in-house team to conduct audits regularly. This way, you will be well informed on the weak points of your business where federal or state law is violated.
Conclusion:
Strengthening the security system, updating software and security measures to keep data safe, maintaining the laws and regulations, and ensuring that you have the safety net of insurance- should be the topmost activities you need to prioritize.
The knowledge of cannabis security risks and how to mitigate them will help you ensure security for both your business and clients. Furthermore, keeping your position on the law’s side will ensure the longevity of your business.
