Among the many legal and financial uncertainties plaguing the cannabis industry, the physical security of their employees and stores are the most worrisome for legal business owners.
A survey conducted earlier this year across all cannabis-legal states in the U.S. by South San Francisco, CA-based Dama Financial sheds light on what business challenges really keep cannabis operators up at night.
A majority of respondents named either robbery or employee safety as their greatest worry, while a quarter said the ever-present threat of a bank account shutdown is their main source of concern. To complicate matters, many operators say functioning as cash-only operations due to financial regulations amplifies their vulnerability to being robbed or burglarized.
“More than half of respondents to our survey cited either fear of theft or employee security as their top concern, yet nearly six in 10 said they operate entirely in cash and close to seven in 10 say they haven’t opened a bank account,” said Dama co-founder and CEO Anh Hatzopoulos.
Hatzopoulos said cash operations were extremely vulnerable, citing a rash of robberies last year that saw 15 licensed cannabis stores in Oakland victimized in a single week in November.
“The risk of crime will never be entirely avoidable, but it can be reduced significantly by engaging transparently with the banking system, utilizing cash management tools, and implementing consumer payments products that remove cash from operations,” he said.
Regulatory compliance was another issue cited by respondents. Some 70% of poll takers said that navigating their state’s cannabis business regulations is difficult and frustrating.
“The results confirm that cannabis owners need help navigating the rules not only around banking, but around operations at every step of the supply chain. CRBs that don’t implement systems and technologies to maximize both operational and regulatory efficiencies are going to have a hard time surviving as the industry becomes more competitive,” Hatzopoulos said.