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Cannabis sales continue to skyrocket in the United States today. In fact, experts predict they will reach $23 billion in a few years. Businesses operating in the cannabis industry love hearing this projection, as it means their futures should be secure. Nevertheless, with more sales comes additional risks and exposures. Cannabis dispensaries, in particular, need to pay close attention to security challenges. Although there are quite a few the dispensary owner must remain aware of, three security risks lead to the most concern in 2021.
Risks Of Running Cannabis Dispensaries
The Feingold Companies warn dispensaries of the risk of external theft. Cannabis dispensaries primarily rely on cash sales, due in part to the difficulties they encounter when trying to find a merchant card processor. They must store large amounts of cash until they can make a deposit at their financial institution. Criminals recognize this fact and may target a dispensary when they know there is cash on hand. Some financial institutions work with cannabis businesses, but not all do. The cannabis dispensary must research different providers to find one that makes it easy for them to accept other forms of payment. Doing so will reduce the risk of an attack from an outside source.
According to Smallbizgenius.net, businesses in the United States lose as much as $110 million every day as a result of crimes committed by employees. MJ Daily confirms this, saying a dispensary could lose tens of thousands of dollars each year because of employee theft. Where cannabis dispensaries differ from many other businesses is in the amount of internal theft. Security experts believe internal theft could account for 90 percent of product and revenue loss in dispensaries and other cannabis-related businesses.
Internal theft comes in several forms. Embezzlement remains a major concern for small business owners, as 80 percent of embezzlement scheme victims employ fewer than 100 individuals. Billing fraud schemes, time theft, and asset misappropriation schemes also plague small businesses, and owners must remain cognizant of everything taking place within their organization to detect potential cases of theft early.
Cyberattacks cost businesses approximately $1 trillion in 2020, and this figure is expected to rise in 2021 and the coming years. The cannabis industry remains at risk of a cyberattack, and the same holds for the medical and recreational cannabis sectors. In fact, countless cannabis dispensaries across the United States found they fell victim to a cyberattack involving a popular point-of-sale software program. As a result of this hack, approximately 85,000 customer files were exposed, and the cybercriminals gained access to their sensitive medical data. The global pandemic of 2020 changed the way men and women shop today, as they learned how convenient it is to shop online. Experts say e-commerce is here to stay, which means the risk of cyberattacks will only increase as the data they can steal increases.
Mitigating Risks In The Cannabis Industry
Cannabis dispensaries must vet all employees. Although the vetting process won’t catch all potential criminals, catching even one is beneficial. Every business must put into place security protocols to limit employee access to vulnerable areas, train managers in the handling of employee theft situations, and reduce the risk of employee collusion. An alarm system and surveillance cameras remain a necessity today, and all employees must undergo training in cybersecurity best practices.
The business owner must sit down with their broker to learn of other ways to prevent theft in their dispensary. During this conversation, coverage should undergo a review. Furthermore, every business needs a cyber liability policy today to protect itself in the event of a cyberattack. Finally, A cybersecurity incident response plan needs to be implemented, as this plan helps to minimize damage while reducing the time needed to recover from an attack. One can never be too careful when it comes to their business, so take proactive measures today for the best results.