Lock It Up!

Despite the increasing trend of marijuana legalization at the state level, federal laws and other obstacles to banking services force these legitimate, licensed businesses to operate on a cash-only basis.

With the combination of cash, high-dollar merchandise and laws that make having a firearm in marijuana stores a federal offense, cannabis retailers and dispensaries have become popular targets for criminals looking to pocket some quick cash.

“They know there’s a lot of cash, a lot of drugs and no guns,” says Eric Gaston, co-owner of three Evergreen Market retail shops in the Seattle area.

Gaston knows from experience. During the early days at the first Evergreen Market location, he says the store had its security “tested” at both the front and back doors. The attempted break-ins led the company to make some changes, like steel through bolts that lock into the steel-reinforced door frame at three points.

“We were a little bit naive in that first instance,” Gaston says. “Now we’ve got a very robust system of locks and doors.”

Store security requirements vary by state, with Oregon among the strictest and Washington among the most lax. For example, there are no requirements for a safe room in Washington or Colorado stores, while Oregon requires all retailers to have a safe weighing at least 750 pounds in which all product must be kept during hours when the shop is closed.

All three states, however, require video surveillance of the shops at all times. But security experts agree that still might not be enough.

‘THE NATURE OF THE BEAST’

While the allure of cash and marijuana are undeniable to the criminal element, Commander James Henning of the Denver Police Department’s Investigative Support Division says there generally aren’t a lot of issues at the licensed shops in his town, though they do account for about 12% of all business burglaries in Denver, the top business type to be hit.

“They will be the target of burglaries,” Henning says. “That is the nature of the beast.”

There have been successful attempts in which burglars break through ceilings or walls from neighboring businesses, or even use vehicles to crash through the sides of buildings, but Henning says those have resulted mostly in product being taken, not cash. Most retailers lock money in safes, although it’s not required by law.

But even the burglaries are not as common as Henning says the law enforcement community expected at the onset of the legal cannabis era. He attributes this to the required surveillance. In Colorado, for example, the law requires 24-hour-per-day camera coverage of all limited access areas, point-of-sale areas, all areas where product is displayed and all entrances and exits, which must be covered from both indoor and outdoor vantage points. Proposed regulations in Nevada include a 24-hour video feed that can be accessed directly by police.

The cameras might not stop a determined criminal, but they will deter the vast majority of would-be burglars.

“It’s easier to rob a bank,” Henning says.

NOT ALL CAMERAS ARE EQUAL

Camera systems are more for state agencies to make sure stores remain in compliance with legal regulations regarding the product than they are designed to provide security from theft, according to CannaGuard founder and CEO Noah Stokes.

He generally recommends going “above and beyond” whatever the state requirements are and warns that in his experience, marijuana businesses are “statistically far more likely to get robbed by an employee or former employee.”

Stokes, who also owns OmniGuard Security, formed CannaGuard about two-and-a-half years ago. OmniGuard provided security and cameras for non-cannabis businesses and was called by a medical grow operation that was robbed and was looking to beef up its surveillance program. Realizing a need in the growing industry and wanting to insulate OmniGuard from any marijuana-related banking challenges, Stokes opened the cannabis-specific company soon after.

To date, CannaGuard has helped more than 4,000 applicants in 10 states, though his company does not operate in Colorado. Stokes says the majority of his job is making sure licensees understand the laws in their respective states and stay in compliance. He says surveillance regulations range from the “crazy” in Washington (where every square inch must be monitored) to the “fairly vague” in other states like Oregon, where rules focus more on the diversion of large amounts of product or money from shops.

COMMON SENSE PROTECTIONS

Both Henning and Stokes preach “common sense” when it comes to security. For example, whether it is required — like in Oregon — or not, both recommend removing product from display cases during non-business hours, like a jewelry store would.

“Put it in a safe someplace,” Stokes says.

Stokes, however, is careful to point out that purchasing a safe based solely on weight or fire rating may not result in the best product. Stokes says it is more important to check performance requirements to see how long the safe resists entry using burglary tools. All safes should also be bolted down.

Beyond that, Stokes recommends multiple safes to house merchandise and cash. He says buying more than one safe may be an additional expense initially, but will be “cheap in the grand scheme of things.”

Stokes also tells his clients to make sure their security system has a cloud-based backup to prevent a burglar from simply destroying the recordings. Additionally, he recommends off-site monitoring and non-emergency notification options, which would notify owners or security personnel whenever anyone accesses the store, whether that access is authorized or not, since he believes it is more important for owners to watch out for the inside job.

“Someone that knows when you have that half-million bucks in the safe — those are the guys that will run you out of business,” he says. “Those are the ones you have to worry about.”

Stokes says shop owners must always be careful to change security codes and not make copies of electronic keys as a way to prevent disgruntled employees seeking to make a quick buck.

ABOVE AND BEYOND

Back at the new Evergreen Market store, safety and security are top priorities.

“Don’t scrimp,” says Marty Smith, Evergreen’s director of compliance and facilities. “Spend the money you need to make the facility safe for your staff.”

The company keeps a large safe bolted to the floor in the secure room. The walls and floors are steel-plated and lined with motion-detecting sensors. The room is locked and monitored at all times and only select employees have access.

All product is kept on rolling carts that are pushed into the safe room each night. The stores also have a 2,000-pound safe in the retail section used for cash drops through the day to secure money and further limit trips to the main safe room. In addition, all employees wear panic buttons.

In total, there are more than 50 cameras in and around the shop and its 3,500 square feet of retail space, including in the floors.

Evergreen Market also uses scissor gates at the shops, which slide out of the way during hours of operation but provide a strong, visual deterrent when the shop is closed.

“The facility itself is your first line of defense,” Gaston says.

Gaston also recommends reaching out to and cultivating a good relationship with local law enforcement officials. He says it’s important for the police to be comfortable with the owners and vice versa.

“We’re all on the same team,” he says, adding that he would also like to see the state make robbing a marijuana retailer an enhanced crime, similar to robbing a pharmacy.

Henning and Stokes recommend all retailers follow Evergreen’s lead and do more than the basic minimum the state might require.

“You always go above and beyond, that’s what I suggest,” Henning says.

Stokes is even more direct.

“Don’t be the easiest target on the block,” he suggests. “Criminals are lazy; that’s why they don’t have jobs. They will go for the easiest target.”

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