The legalization of recreational marijuana presents a major business opportunity. Ontario cannabis stores will officially attain legal status in 2019, with 25 licenses available in Ontario
Despite the transition of recreational marijuana sales to legal status, there are still risks tied to running a marijuana dispensary. These risks are due to the lingering association of marijuana with organized crime, and to the patchy rollout of legislation.
These risks to your marijuana dispensary present themselves in two ways:
- Your marijuana dispensary could become a target of criminal threats, both external and internal.
- Beyond the world of crime, there are still regulatory issues to consider in each province, including Ontario.
1. External Threats
Marijuana dispensaries are a frequent target of robberies and break-ins.
The threat of robberies and break-ins varies based on where you’re located — even within Toronto. If your dispensary is located in Aurora Ontario, for example, the threat environment might be different than in the GTA, which has seen the homicide rate rise in recent years.
As with most properties, the variability of crime rates per location may affect your insurance levels and your cost of operations.
Beyond the loss of assets, robberies are a common external threat to guard against: the high value of your product makes your dispensary more vulnerable.
Robberies can put the lives of your employees and customers at risk. Though your employees might intervene successfully, there’s no reason to put them in that position in the first place.
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You cannot be at the store all the time, and break-ins are another threat.
Be aware of recurring suspicious activity: are there one or more individuals lingering outside the store for long periods of time, for days at a time? They could be planning a break-in.
Even if a break-in is unsuccessful, they are costly, and can encourage other perpetrators to try it again.
A perpetrator can, for example, try to force the door open, or attempt to throw a nearby heavy object like a brick through a window. Even a botched break-in threatens damage to both your investment and your inventory.
2. Internal Threats
Have you heard the maxim ‘keep your friends close, but your enemies closer?’
Sometimes a business might hire an employee who poses an internal threat. A background check is important when hiring each employee, but in terms of security, it is just a first step.
Cannabis retailers have expressed mixed feelings about bringing people into the legal cannabis industry who have previously been involved in the illicit market. We don’t mean to trigger paranoia: internal crime is a problem in retail as a whole.
Unfortunately, an employee who wishes to rob your dispensary would have strong retail knowledge and awareness of the weaknesses of the retail space — stronger certainly than that of external criminals.
Robbery can also happen at the point of sale area: an employee could steal money from the employer through writing fraudulent checks or simply taking cash from the register.
While you’re likely to weed out all of the questionable candidates and make stellar hires across the board, do not take any risks with your high-value inventory.
3. Regulatory Issues
The Cannabis Act (Bill C-45) confers provinces the right to shape their marijuana markets, and this has resulted in a piecemeal implementation of legality in Ontario.
As it stands, until 2019, licenses for marijuana dispensaries have been capped at 25 licenses.
Though Bill C-45 is in effect, the legal situation is still in transition; if you run an existing or pre-legal marijuana dispensary in Canada, ensure your business closely follows your provincial laws.
Similarly, in order to qualify for a dispensary license, all new marijuana stores must abide by provincial rules. For example, Alberta’s AGLC stipulates that all new stores install a storage room with a steel door, visual monitoring, access control, intrusion detection with an alarm to alert law enforcement. These rules are designed to protect inventory and discourage crime.
Solutions: protecting your dispensary
How to protect your dispensary from external threats
Invest in a credible 24/7 visual monitoring system via CCTV for the perimeter of your store. A camera trained on the parking lot can catch the license plate of a robber, or at the front of the store, keeping track of, for example, people who linger in front of the store more often than usual.
From the comfort of your home, you can keep your eye on the area around your store for suspicious activity, to catch early warning signs of robbery and give law enforcement a head start. And even if you are not available, intrusion detection and alarms can alert law enforcement to come promptly too.
These systems can benefit your business beyond safety: for example, video surveillance can raise ROI by providing business process improvement, helping you manage your business more effectively.
How to protect your dispensary from internal threats
Your inventory is your prime investment, and given its particularly high value, you could be at elevated risk of internal threats. Make sure your marijuana dispensary is protected.
Keep a watchful eye by also installing CCTV-based visual monitoring in the inventory room, point-of-sale area, entrance and exit doors, and any other parts of the store you suspect will be vulnerable. This way you can keep track of employee activity and movement in the storage room.
In case of fraudulent transactions, such as false refunds, keep your CCTV primed on your point of sale area. Because of their awareness of the monitoring system in place, it helps discourage employees from committing future crimes, too.
Consider installing access controls (such as keycards, mobile access or biometric identification), which will restrict access to the inventory itself to only a trusted few. You can even install dual authentication processes for further enhanced security and make it harder for criminals to access your inventory.
You can pair a monitoring system with an incident response system that immediately alerts law enforcement to break-ins.
Whether you are protecting your high-value inventory from a criminal breach or ensuring your time spent applying for a license is not wasted, it pays to be protected.
At Logixx, we’ll help you overcome security-related requirements across each of the three areas discussed in this article: provincial regulations, compliance, and physical security.
In terms of physical security, we’ll leverage our experience helping marijuana producers to help you design, install and maintain a robust physical security system.
With our professional help, you’ll meet every provincial compliance requirement for licensing and safeguard your investment against regulator fines and criminals.
Contact us today to get started.