With the legalization of recreational marijuana use, more cannabis dispensaries will start to pop up, so it’s important to understand what asset protection is and how it can help your business.
While the cannabis industry can be very profitable, those in the industry can be taken advantage of without proper asset protection, putting any business at risk. Asset protection helps provide security to protect a company’s assets from creditor claims.
According to OG Cannabis Insurance, the cannabis industry is growing at a rapid pace, making the cannabis market worth around $8 billion currently. Having asset protection ensures a business’s longevity within the cannabis industry.
Cannabis businesses are unlike other businesses, as they keep a large quantity of cash and product on-site and thus increase their risk of theft. This means cannabis companies require increased security measures to protect their cash, valuable products, and other assets.
As well as protecting assets from crime and theft, there are certain regulations and local and federal compliance standards that must be followed in the cannabis industry, according to Openpath. The production, transportation, selling, and handling of cannabis products must all adhere to these standards to legally continue as a business.
Safety should be a business’s number one priority in the cannabis industry, from protecting their assets to abiding by the law.
Some basic forms of asset protection include surveillance, cyber security, and access control. Security policies specifically formulated for different situations, such as those centered on customers, employees, or emergencies, can each be vital in protecting one’s assets on multiple fronts.
If security measures aren’t thoroughly planned out with specific systems and protocols, a business risks being a prime target for crime and theft.
The primary assets involved with cannabis dispensaries are cannabis-related products, such as cannabis oil, edibles, waxes, and flowers, to name a few. Other assets include cash, cannabis farms, storage, security equipment, and other technological equipment. Anything with a high value has a risk of being stolen, especially at dispensaries since they tend to have, at minimum, thousands of dollars in assets on-site.
Cash and cannabis products should be locked up and under a detailed security system protecting the building from breaking and entering, such as surveillance systems and alarms that will trigger if the building is broken into. There are many different asset protection services one can hire to thoroughly protect their business.
These services vary depending on how the business operates and what assets they need to protect.
Cannabis farms and other facilities require strict access control to ensure their product isn’t tampered with. To this end, video surveillance should be installed and monitored closely. Specifically for cannabis farms, security systems should be in place to maintain the product’s ideal temperature, humidity, and lighting. These assets can easily become damaged or lower in quality if there’s a power outage or if these systems are tampered with. Backup generators would also be a good idea to help maintain a controlled environment when growing cannabis.
Access control systems are also vital to dispensaries selling medical or recreational marijuana. Security personnel and access control-based systems would prevent unauthorized people from entering restricted areas and potentially tampering with the products.
Security breaches can also occur within a business, and that is why there should be a rigorous process when hiring employees. Full background checks should be run, with each potential employee’s information stored on a secure database.
When it comes to moving product or cash, it’s important to have a highly trained and armed security detail in an armored car with surveillance in the event that there is an attempted robbery. Employees aiding in the delivery and handling of product should be adequately equipped with armor and possibly be armed to protect not just the product but also themselves.
According to the Rose Law Group, “Information such as nutrient formulations, production techniques, extraction methods, and cannabis product formulations or recipes may be well suited to trade secret protection. It is prudent for marijuana business owners to take active steps now to keep proprietary information a secret and to obtain legal guidance to help ensure that they have implemented adequate measures to keep their trade secret secure.”
Assets don’t just have to be physical; a trade secret is an important asset that can lose its economic value once it is no longer a secret. Therefore, businesses should take extra steps to ensure their trade secret continues to benefit them while also protecting it.
Cannabis businesses will normally entrust someone with a trade secret if they sign a nondisclosure agreement (NDA), a document that protects the business legally if that person were to share the secret with anyone else. This solidifies trust between the two parties, maintaining the secrecy of this information and ensuring the asset will not lose its value or benefit another business.
As the cannabis industry expands and evolves, extra security measures must be taken by businesses to protect their valuable assets, whether that be cash, products, cannabis farms, employees, or trade secrets.