As we’ve documented rather extensively, the notion that cash is on the outs is a huge exaggeration. It may not be used quite to the same extent, but it remains the most common form of payment among small-dollar purchases and as a Gallup poll shows, 20% of Americans use paper currency for approximately half of their purchases. That’s down a mere 2% from 2011.
Indeed, lots of merchandise today is purchased almost exclusively with cash. Case in point: cannabis. As noted by the National Conference of State Legislatures, cannabis is legal to buy and sell in 34 states, with several other legislatures considering whether they should follow suit. At the same time, though, marijuana remains a federally prohibited substance and is treated as a Schedule I drug.
As such, since most retail banks are federally insured, they’re loath to provide checking and credit card accounts to dispensaries, even in states where cannabis has long been deemed legal to own and use for recreational purposes. Cash serves as a workaround, as it’s accepted all around the world and is eminently fungible.
“Cannabis sales rose by nearly $11 billion in 2018.”
That being said, just last year, cannabis sales rose by nearly $11 billion, according to the NCSL. All that cash has to go somewhere, and unfortunately, funds from cannabis-related transactions have ended up in the wrong hands – targeted by thieves.
10 break-ins inside of 30 days
Over the past several years, a number of marijuana dispensaries throughout the country have had to deal with break-ins. As reported by CBS Sacramento, no fewer than 10 dispensaries in California’s capital city called police to investigate robberies that occurred within the month of September. In one instance, the perpetrators rammed their vehicle into the owner’s shop.
“It’s tough to beat a car driven through your facility,” Paul Clemons, who handles compliance and licensing at the facility where the theft occurred, told CBS 13.
A couple of weeks after this incident, a Sonora-based dispensary, which is approximately 91 miles southeast of Sacramento, had more than $69,000 in cannabis-related products and cash stolen, as reported by NBC affiliate station KCRA 3.
Robbery affects 1 in every 2 marijuana dispensaries
Significant losses such as these are unfortunately fairly routine. According to the Wharton School of Business Public Policy Initiative, the average amount stolen from cannabis dispensaries totals between $20,000 and $50,000. Not only that, but the chances of their being robbed or burglarized has risen sharply. Their odds of encountering crime was 50% in 2015, up from just 17% in 2009. Given that hundreds more locations have since opened in the past four years, the chances of dispensaries being victimized by crime has likely risen.
Fortunately, lawmakers on Capitol Hill are working on a prospective solution through a piece of legislation called the Secure and Fair Enforcement Banking (SAFE) Act of 2019. This past September, the U.S. House of Representatives passed the SAFE Act with bipartisan support. If approved by the Senate and subsequently signed into law by the president, the bill would prohibit federal banking regulators from cracking down on FIs that provide financial services to businesses selling cannabis for recreational and/or medical purposes. This could potentially pave the way for dispensaries to open checking, credit card and other financial products.
However, as is almost always the case in Washington, the wheels of justice grind slowly. In other words, even if the SAFE Act becomes the law of the land, it will likely be awhile before it’s actually enacted. So what can dispensaries do right now?
Teller cash recyclers have long been used by banks and credit unions with great success; ensuring optimal efficiency and security. With a TCR in place, you can quickly and seamlessly authenticate cash, bundle it by denomination and – perhaps most importantly – keep it safe and protected. For more information on finding the right TCR for your needs as well as other security equipment, please contact us at BranchServ.