9-10-2023 10:06am

Crime Against Cannabis Businesses, Federal Reform Needed in Banking and Insurance

Chris Edwards Editor

An Albuquerque Cannabis business has a loss of thousands of dollars after thieves broke in and fired weapons inside causing significant damage. Trident Cannabis Company was hit in July as thieves broke into the pot shop and shot at the ATM; several other stores were hit as well.

The break-in took place shortly after 5 a.m. the morning of July 10, at Trident’s shop along Juan Tabo and Constitution.
Police report claimed that the security video showed three individuals enter the shop, all wearing face coverings, and one of them is not wearing shoes.

Within minutes, they caused extensive damage to the door and attempt to break into the back of the shop where the cannabis is secured and vaulted.

At one point, one of the thieves attempts to break into the ATM, firing one gunshot.

A surge in robberies at licensed cannabis shops across the US including a pistol whipping, gunshots and killings in Washington state is helping fuel a renewed push for federal banking reforms that would make the cash dependent stores a less appealing target.

"It makes absolutely no sense that legal businesses are being forced to operate entirely in cash, and it's dangerous — and sometimes even fatal — for employees behind the register," Washington Sen. Patty Murray, the third-ranking Democrat in the Senate, said in a statement emailed to The Associated Press who recently covered the issue of the need for banking reform in the Cannabis Industry.

Although 18 states have legalized the recreational use of marijuana, and 37 allow its medical use, it remains illegal under federal law. Because of that, big banks and credit card companies have long been reluctant to work with the industry, leaving the businesses heavily reliant on cash and making them attractive marks for robbers.

Public officials have been conflating marijuana use with crime since the 1930s and continue to do so today delaying banking reform and de-scheduling.

Today, public safety fears about medical marijuana dispensaries are often cited as reasons to keep cannabis illegal at the Federal level. However the data does not support the notion that dispensaries cause crime but moreover and often are the victims of crime.

In fact, more than one study has shown a decrease in crime as a result of bringing medical marijuana sales out of the black market and into the light of day. But for cannabis workers it can be a risky business at times given the federal banking rules and making it an all cash business.

Robberies continue to plague the cannabis industry, and with little short-term hope of the Safe Banking Act passing in the U.S. Senate, the abundance of cash in these operations will keep them as targets for criminals.

Some states and localities are taking action. For instance, Washington state passed Senate Bill 5927, which enhances penalties for cannabis robberies, and has contracted with a third-party consulting firm to offer cannabis retailers a free security assessment. These actions are encouraging, but criminals looking for cash still see the cannabis market as a lucrative target.

So what are cannabis businesses to do? Visible deterrents can discourage some criminals, but unfortunately, not all criminals will be deterred.

For those set on cannabis robbery or burglary — and this group generally includes the most dangerous and violent offenders — businesses also need to deploy devices that mitigate an attack and provide information to help law enforcement apprehend the offenders and recover the stolen cash and assets.

Once a crime occurs there is little help from insurance thus the small business owner is faced with a large financial loss because many of the big names in insurance steer clear of businesses that sell marijuana.

Cannabis retailers are forced to turn to newer, less reliable insurance outfits that force customers to "jump through every hoop possible" to get reimbursed.

For example, after a recent store robbery in Washington State an owner reported his insurance only paid $26,000 of an estimated half a million in losses and property damages.

The level of coverage necessary for that kind of loss is simply unsustainable for some cannabis businesses and typically not available.

In an article for Reason Magazine it was reported Eduardo Whittington the founder of Lobo Cannagar, a pre-roll blunt and joint manufacturer headquartered in Oakland also faced a robbery with no insurance reimbursement. More than a dozen masked intruders broke into and robbed the shared work facility that Lobo Cannagar uses for manufacturing.

Whittington carries no insurance on the facility. He says he opted to go without it based on the many hassles and bad deals others in the industry had received. "The juice isn't worth the squeeze," he explained. Had Whittington sold alcohol or tobacco, or any other federally approved product instead of weed, he would have had no problem insuring his facility. But because he's in the legal marijuana business, which the federal government continues to frown on, Whittington is now on the hook for the full costs of the crimes committed against him and his company. The robbery cost hundreds of thousands of dollars. Small business operators and owners cannot sustain those losses.

Congress needs to quit being on the take from the pharmaceutical and insurance lobby and complete the process of protecting and representing small business owners and change the Federal cannabis laws from de-scheduling, to banking and insurance. Legal cannabis or marijuana sales now exceed chocolate sales as a category as a driver of revenue and jobs in the US economy.

Whitney Economics calculated that the total amount of cannabis (both legal and illegal) will exceed 48.8 million pounds in 2022. Their report also projects there will be more legal cannabis than illicit cannabis in the U.S. by 2026.

Cannabis is also now legal in 37 states plus Washington D.C. for medical purposes: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Virginia, Washington, and West Virginia.

According to Leafly's jobs report, 428,059 full-time equivalent jobs are now supported by legal cannabis as of January 2022. The industry created an average of 280 new jobs per day last year.

The report found that cannabis jobs increased by 33% year over year, with 2021 being the fifth year in a row of growth higher than 27%.

The Federal Government needs to catch up with the needs of the cannabis industry and protect these 428,000 workers with legislation that protects these workers and small businesses with cannabis banking and insurance reform this fall session of 2023.