By Mark Allen
The cannabis industry is evolving. Security and compliance regulations are challenging, even at the best of times. Matters grow even more complicated considering short staffing, the new pandemic, which includes physical security teams. In this article, we take a look at some of the current security issues the cannabis industry faces and how dispensaries can leverage video management system (VMS) solutions to detect threats, mitigate risk, and minimize loss.
Current Situation of Security in the Cannabis Industry
According to Gerrit Nagarwalla, claims supervisor at Canopius Group: “Approximately 90% of insurance claims in the US cannabis industry so far have involved an element of theft. This statement is true across the spectrum of the industry; from minor grow operations to massive commercial cannabis enterprises.”
One of the biggest trends Nagarwalla witnessed within these claims is how many of them tend to involve some element of inside information. It might not be direct employee involvement, but a large number of events and exactly how they occured suggest the individuals involved worked from intel gathered from someone in-the-know. The perpetrators knew exactly where to break into the facility to dodge motion detectors or some other way to bypass the alarm. This is no coincidence.
A 2015 analysis by the Wharton School of Business Public Policy Initiative found, in the absence of being banked, one in every two cannabis dispensaries were robbed or burglarized. The average burglar scored anywhere from $20,000 to $50,000 in a single robbery.
As per American Bankers Association, the roughly 500 cannabis businesses in Denver constitute less than 1% of all indigenous businesses but account for 10% of all reported business thefts from 2012 – 2016. Over 100 burglaries occur at cannabis businesses each year according to the Denver Police Department, and burglaries and theft comprise almost 80% of Denver’s cannabis industry-related crime.
Another report suggests that roughly 90% of monetary and product loss in the cannabis industry results from employee diversion. The other 10% of product loss is due to either an external force, such as a robbery, or simply by poor business tracking.
Employee theft is widespread in most industries but is a significant challenge for cannabis businesses which often manage large amounts of cash and an easy-to-steal product. Both factors only increase the urge among staff to divert some cash or cannabis to their own pockets. This type of theft is rarely simple to detect.
Referring to how much legal cannabis was sold in Colorado in 2014, Steve Owens, the founder and CEO of Adherence Information Management says: “If you look at it being a $700 million market in Colorado, (employee theft amounts to) probably 2-3% of that.”
In 2020, many cannabis dispensaries in California, Illinois, Oregon, and elsewhere fell victim to theft and property damage during the aftermath of George Floyd’s murder. Several shops were hit multiple times in successive days, with many reports specifying organized groups not involved in protests were targeting companies.
4 Reasons Real-Time Video Intelligence Is Critical
Keeping track of every aspect of your cannabis business is indispensable not only for industry success but also for the security of workers and compliance with state regulations. As cannabis is considered a high-risk enterprise due to valuable inventory and chiefly cash transactions, enhancing your security capabilities should be priority number one.
Intelligent, real-time video surveillance can securely monitor and record all activity in and around your facility, from a small dispensary to a large grow operation. This is all possible from a central security center, and with a short-staffed or anywhere-operations model workforce the norm, it is just as easy to monitor from your mobile device.
Other benefits of VMS for the cannabis industry include:
- Perimeter Security
Each exit and entry point in your facility must be monitored around the clock without disruption by light, weather conditions, obstructions, or electrical failure. You also need a backup power source for your security system to avoid lapses in surveillance making the business vulnerable to diversion or compliance violations.
Along with strict regulatory requirements, cannabis businesses must be observed and recorded 20 feet beyond the outer perimeter of the property (including fields, fences, and warehouses for grow operations) to avoid breaches and to monitor transportation in and out of your facility.
- Employee and Customer Security
Video surveillance empowers your business to safeguard its most valuable assets: your employees and customers. Facility security is the main concern for any physical business operation, and the cannabis industry is no exception.
On top of employee emergency protocols and physical security measures already implemented, a video surveillance system allows you to evaluate any physical threats to your business and its workers. It provides valuable proof to law enforcement agencies in the event of an incident.
- Inventory Monitoring
Monitoring inventory is a critical aspect of cannabis security to avoid diversion. The most substantial risk faced by your business may well be employee theft, comprising the majority of products stolen in the cannabis industry.
Continuous, real-time surveillance of inventory storage and product or cash transfers limits the likelihood of incident and can help your business maximize profits and return on assets. Video monitoring of a grow operation also allows you to observe the progress and health of your cannabis plants remotely.
With fluctuating regulations regarding the management and sale of cannabis across the US, companies must keep a close eye on modifications to security regulations to remain in compliance.
For video surveillance alone, every state enforces requirements on the number of cameras, camera image resolution, placement of cameras, remote access to surveillance video storage, and storage length of recorded video. Some states at present allow a minimum of 90 days stored security footage, but the industry standard is anticipated to follow California’s one-year minimum over the next few years.
All cameras must operate 24/7 and people must be recognizable from above and at eye level, though exact resolution and camera type may be different in your state. Stored video must be made accessible to law enforcement agencies instantly upon request in the case of an incident or compliance audit.
Total Situational Awareness
Video surveillance systems ensure better decision-making, protect people and property, improve workflow efficiency, and enhance both security and visibility, all while decreasing liability and improving reputation.
At Identiv, we understand the anywhere operations model, your need to mitigate risk 24/7, and the constantly changing guidelines from state governments regarding video surveillance regulations. Our team of experts can help you maintain real-time physical, operational, and digital protection for your dispensary.
Velocity Vision is the future of visual surveillance: an intelligent video management solution delivering real-time situational awareness in an open security platform. Integrate with your existing systems, verify your environment in one pane of glass, and increase the efficiency of your cannabis security operations. Get full control of your environment when and where you need it.
Our VMS is a complete, end-to-end enterprise security platform for cannabis cultivation and production facilities, saving time, protecting assets, and securing your facility.
Learn more about protecting your cannabis business with real-time visual intelligence and see Velocity Vision in action at go.identiv.com/vvsim.
About the author: Mark Allen is the General Manager of Premises and Physical Access Systems at Identiv. He manages all departments related to the Physical Access systems business unit and is responsible for organizing, developing, managing a profitable business unit providing industry-leading products and services in the area of physical access.