Cannabis Fraud 101: Tips to Safeguard your Dispensary & Prevent Thefts

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Cova-NB-Prevent-Theft_Linkedin2022 has seen a steep rise in the number of thefts at cannabis dispensaries across the US and Canada. Most cannabis retailers take extra precautionary measures to safeguard their stores, but recent incidents have required dispensary owners to revamp security measures to prevent robberies. Since cannabis is still a cash-based business in many American states, and pocket-sized inventory goes in and out all day long, loss prevention should remain your foremost priority. However, when thieves can get violent with guns and lives are at stake, even the best-trained employees and the most robust safes are vulnerable.

From a business perspective, loss prevention is a significant factor in increasing your bottom line, and from a cannabis compliance perspective, failure to closely monitor inventory can mean loss of license. First and foremost, you must ensure the safety and security of your staff, who could be held at gunpoint or worse, shot at, if they don’t comply with the demands of the thieves who may enter your dispensary unannounced. With so much at stake to protect your staff, prevent inventory loss, safeguard your store, and prevent thefts, investing in the solutions below is a logical business decision.

When thinking about loss prevention, there are two kinds of thefts to look out for: internal (staff) and external (customer or random person). No one wants to think of their employees or customers as potential thieves, but that’s the unfortunate reality across all retailers, not just cannabis stores. It’s also true that certain aspects of the cannabis industry make it particularly fertile for theft. Let’s dive into some basic things that every cannabis retailer must incorporate at their dispensary.

1. Excellent lighting and Video Surveillance

Thieves operate in the dark, and good lighting will always discourage potential robbers. Try also not to block your dispensary windows with signage or anything that may obstruct the view from the outside. In Canada, as per regulations, one must not be able to see inside a cannabis retail store. Hence, it is essential to have 24X7 video surveillance both inside and outside the premises. Employees should also be able to see what’s happening outside the store during operating hours so that if they see something unusual, they can prepare accordingly.

2. Proper Security Systems and ID Verification

Hiring armed security guards is an option in the US, but it can be cost-prohibitive. However, one can still fortify the entry points with well-trained security guards, weapon detection systems, and other security systems. Well-trained security guards make the customers feel welcome and maintain a zero-tolerance policy on activities that may pose a threat to the store or its staff. These guards or any other employee also must verify the IDs of all customers entering your dispensary. The employee should then either keep it in a secure location or hand it to the budtender taking care of the customer until they leave.

3. Employee Training and Professional Transportation

Employees are a cannabis retailer’s front-line defense against robberies, so it’s necessary to train them on safety protocols and procedures by preparing them on different ways to respond to threats and ensure the safety of the dispensary and its occupants. You must also invest in proper and secure transportation for your cash and cannabis so that your business is not vulnerable to any internal or external threats. These days, many security companies tailor their services for cannabis dispensaries, and it’s best to hire their professional services for all your security needs.

1. Upgrade Your Security Systems

While cannabis security equipment is an expensive investment, you don’t want to skimp out. The cash-based nature of cannabis in the US makes it an easy target for robbery and theft. In Colorado and Washington, all cannabis retail locations must have security cameras and alarms with 24-hour monitoring. All cannabis retail locations around the world would be wise to follow suit, even if it’s not required by the local government.

2. Limit Loss With Dispensary Design

Changing up your store’s interior design can prevent loss. Guide the flow of traffic by strategically placing display cases or barriers to keep orderly lines on the sales floor. This allows your staff to keep an eye on customers while they browse. These strategically-placed display cases can limit theft as well. Keep all of your inventory behind the sales counter and leave a sample of each product in the display case for customers to peruse.

3. Invest in Multiple Vaults & Safes

At the end of every business day, all of your inventory and any on-hand cash should be locked away in multiple vaults and biometric safes. These should come equipped with 24-hour monitoring and alerts so you immediately know when a vault or safe opens, and only your top supervisors should have access. High-tech vaults can be expensive, but considering you’ll be storing your business’ lifeblood in them, it’s a wise and necessary investment.

Research has revealed that up to 90 percent of losses reported by cannabis businesses are due to theft from employees. This is why you must take proactive steps to prevent internal theft.

1. Cultivate a Loyal and Faithful Team

The cannabis industry is known for low wages and relies on transitory, part-time workers to staff retail locations. But when a dispensary can pay a living wage, hire full-time staff with benefits, and even offer modest profit-sharing agreements, it goes a long way toward cultivating loyalty. An employee that is well taken care of is less likely to bite the hand that feeds her. Even if you’ve built a cannabis retail A-team you can trust, it’s wise to have more than one employee working at all times with a manager or supervisor on each shift. Do have a thorough hiring process that not only verifies a potential employee’s skills but also their background.

2. Be Diligent About Inventory Checks

With inventory moving in and out of your retail cannabis store often, regular inventory checks are crucial for preventing loss. Have a clear system on how cannabis products and cash will be handled by employees. Your staff should count money at least twice per day, once before opening the store and again after closing. Ideally, these counts must happen after every shift change so you can pinpoint who was working at the time of loss. It sounds like a lot of work, but a smart inventory management tool can take the headache out of inventory checks. Cova’s system keeps inventory count in real-time, as every transaction takes place. All you need to do is reconcile your physical count with the ledger.

3. Invest in a Cannabis-Specific POS to Protect Your Business

A robust cannabis point of sale (POS) system can help avoid losses. Cova POS has been built specifically with the cannabis industry in mind. As such, Cova allows you to set permissions for each member of your staff, restrict some abilities to managers only and prohibit employees from authorizing discounts for their friends or selling products to themselves. With Cova, you can also control the level of access each staff member has to the various rooms in the dispensary. Hence, if and when a crime is committed, you will know who was in a particular room at that time. Request a demo to learn how Cova can protect your cannabis retail investment.

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