The Increase in Dispensary Crime Just Reaffirms the Need for Cannabis Banking
Many legal cannabis businesses are forced to be cash-only, leaving them vulnerable to burglaries, robberies, and violent crimes.
Despite most states legalizing cannabis in some form, it is still federally illegal. So many banks, credit unions, and lenders refuse to conduct business with licensed cannabis companies out of fear of federal retaliation.
Responding to this, lawmakers have introduced the SAFE Banking Act as bipartisan legislation that would impede federal banking regulators from intervening in a financial institution's ability to conduct business with plant-touching cannabis companies and ancillary brands that service the industry. Legislators have attempted to pass various versions of the SAFE Banking Act over the past several years. In April 2021, the latest version passed in the House with overwhelming bipartisan support. It's now waiting to be passed in the Senate before being signed into law by President Biden.
But until the SAFE Banking Act is signed into law, many cannabis businesses and their employees cannot easily access banking services and rely on cash to operate, leaving them exposed to a variety of crimes.
Small businesses are most vulnerable
While large, multi-state operators (MSOs) and other big players can afford heavy security, such as armored vans to transport cash and armed guards to protect their stores; smaller shops cannot afford the same protections. Without access to traditional business loans, some retailers have no way to recover from the damages incurred by burglaries and robberies.
Even if a dispensary is banked, they still cannot legally accept credit or debit cards as forms of payment, constraining them to accept cash only. Coupled with the fact that bad actors can resell their products at much higher rates on the illicit market in non-legal states, dispensaries are an easy and obvious target.
Targets of violence
The ever-increasing occurrence of violent incidents has sparked more conversation about whether pot shops should allow their employees to carry weapons. Those in favor of this added level of protection cite the daily threats that dispensary workers face.
Cameron Smith, a budtender at Lucid Cannabis in Cheney, Washington, was shot and killed by a customer when Smith denied him service for not having proper identification—a requirement to purchase legal cannabis.
In another incident in late 2020, Michael Arthur, a budtender employed at the Cured Green, a single-location legal marijuana dispensary in Oregon, was murdered by armed intruders. His death transpired amid a string of armed robberies of cannabis dispensaries in Portland. Since the start of the pandemic, around two robberies a week occur at Portland dispensaries, with countless more happening every week across the United States.
Earlier this year, a suspected armed robber in Oklahoma was shot and killed by a budtender at the Higher Choice dispensary. If the employee wasn't armed, his story could have ended tragically like many others before him. However, federal law prohibits cannabis patients from purchasing or owning firearms—yet another barrier in empowering retailers to protect their employees and their businesses.
These are only a few examples of the crimes cannabis businesses across the US have to produce solutions to fix—without any added or even the same resources legal businesses not in the industry take advantage of daily. Colorado, one of the first states to legalize recreational weed, brought in $32,383,094 in revenue from taxes and fees in 2020 alone, but states are still not protecting these workers.
Access to banking can help
A simple resolution to this enormous risk to public safety would be to provide marijuana companies with access to banking services just like any other legal, reputable business by passing the SAFE Banking Act. Until then, cannabis businesses will need to find alternative options. Contrary to popular belief, many banks will provide services to the industry—515 of the 8,200 federally registered banks and 169 credit unions offered banking services to marijuana-related businesses at the end of 2020.
Some ancillary companies like Wurk can help facilitate the banking and money movement for cannabis businesses, allowing them to pay their employees via direct deposit instead of sending them home with stacks of cash. Another added benefit—companies can pay their payroll taxes electronically, avoiding the additional costs associated with making cash payments to tax agencies, such as hiring an armored vehicle to transport the money. Partnering with a vendor like Wurk that places emphasis on compliance is critical for businesses fortunate enough to obtain banking services while waiting for the Safe Banking Act to pass.