Dispensary Owners can Reduce cash- related risks with Compliant POS Systems
For dispensary owners, paying taxes means carrying sacks full of money.
Blog co-authored by Steve Schain of Hoban Law and ezGreen Compliance
The cannabis industry is a lot like the Wild West.
Any fan of John Wayne or Clint Eastwood knows that if there’s a freight train full of gold on the move, a gang of horse-bound bandits are soon to be on their way. In the movies, the good guy in the white hat wins—but this isn’t always the case in real life.
Right now, cannabis dispensary owners and their vendors are being put in the unenviable position of having to send, and often personally transport, their own stack of gold bars along the Union Pacific railway. The only difference is that, unlike the robber barons of a hundred and fifty years ago, better options exist for everyone involved.
Cashless Cannabis Isn’t Here Yet
Today’s business owners almost universally pay their taxes using cashless methods. The reliability, security, and ease of wiring money make it a practical solution few people would bypass.
Business owners in the cannabis industry, however, cannot pay their taxes in any form other than cash. The lack of state and federal cannabis banking laws forces dispensary owners to personally hand over huge stacks of cash to the authorities on a regular basis.
In practical terms, this means carrying a duffel bag with $70,000 in cash 50 miles to your state’s tax authority, completely unguarded. The potential for crime and violence is obvious and unavoidable as long as cannabis remains a cash-only industry.
At the same time, dispensaries themselves have been targeted by criminals who know that they hold large amounts of cash and product in-stock.
Capitol Hill has a history of proposing, arguing about, and ultimately dropping bills that would allow for cannabis banking, but support is growing. New hearings suggest that access to banking may finally be just around the corner.
Safety First for Dispensary Owners and Employees
Protecting large amounts of cash is as hard now as it was in the Old West. Guarding anything effectively is an expensive, time-consuming task, and dispensary owners already have to worry about keeping their product secure.
Banks, credit unions, and the politicians who regulate them are feeling mounting pressure to pass legal cannabis legislation in states like California and Maryland. But until robust cannabis laws are a reality, dispensary owners have to take steps to reduce their vulnerability to crime.
Maintaining accurate records and staying within the good graces of regulatory authorities helps to ensure dispensaries avoid making costly security mistakes—but that’s not all. HIPAA compliance and data security can’t address the risk of burglary or robbery.
Safety-minded dispensary owners who know this invest in advanced, security-oriented point-of-sale (POS) software. This move helps them reduce the amount of time free cash remains exposed and vulnerable in the dispensary environment.
Invest in Secure Technology Platforms
Sophisticated point-of-sale software like ezGreen Compliance allows a retail dispensary to utilize any processing platform thru a robust API integrations for any solution you are comfortable with. ezGreen help’s dispensaries integrate their processes with seed-to-sale software like METRC and implement tighter policies around the handling of cash payments.
How to move and bank Cannabis Cash
Spanning 34 states and generating $10.8 billion in 2018, banking and cash management are legalized Marijuana’s greatest obstacles. The 633 banks presently providing Marijuana businesses with accounts are a small fraction of the nation’s 11,954 financial institutions and often impose service fees reaching $10,000 per month per account to offset onerous compliance costs. Although Marijuana’s 100% federal illegality renders all interstate cannabis cash transportation to be potentially violative of federal laws, fewer prohibitions exist if a business transports its own money or signs funds over to a third-party transporter. Further, despite anti-money laundering laws barring cross-border funds transportation or transmission, a “presumption against extraterritoriality” immunizes most foreign cannabis cash transportation from federal prosecution. Steve Schain focuses on the Cannabis industry with Hoban Law Group focusing on topics covering regulatory, litigation, transactional, financial services, tax, and intellectual property practices, email@example.com
Until lawmakers lift the ban on cannabis banking, dispensary owners and employees will have to take every step they can to ensure a safe environment for handling cash.