How Cannabis Dispensary Owners Can Prevent Data Breaches and Downtime

by Mike Conor


Implement a robust cybersecurity solution to keep sensitive data private.
By Mike Coner

Mike is the President of ezGreen Compliance

EZGreen Compliance is a HIPAA certified Point Of Sale solution developed and supported by Automated Healthcare Solutions (AHCS). AHCS is a leading point of care dispensing software solution in the physician dispensing market having developed software products over the past 17 years and supporting 3,500+ active physician operated clinics and dispensaries.  We are experts in managing patient and customer data while maintaining state and national compliance requirements.

When it comes to patient/customer data protection and IT performance, cannabis dispensaries have the same needs as the rest of the healthcare sector. Just like in other highly regulated industries, the government-mandated software designed to meet these needs is not perfect.

Cannabis industry software is not as problematic as other government-contracted solutions – healthcare.gov infamously comes to mind – but it comes with a unique set of issues and data security vulnerabilities.

Headaches are a part of life when running a business in a highly regulated industry, but data security is not. Several factors combine to create an alarming data security environment for cannabis dispensary owners:

• HIPAA Regulation. In most states, cannabis dispensaries are medical clinics. This means they must follow HIPAA regulation and pay steep fines for non-compliance.

• Data Breaches and Cyberattacks. Pharmaceutical companies are more likely to be targeted by cybercriminals than any other businesses. Healthcare organizations were the targets of almost half of all ransomware attacks in 2017.

• The Cybersecurity Talent Gap. There are nearly 3 million unfilled cybersecurity positions around the world. Even Fortune 100 companies have trouble finding cybersecurity talent.

• Unreliable Integrations. Seed-to-sale software doesn’t always integrate well with cannabis dispensary POS deployments. Faulty integrations require manual data entry and other ad hoc processes, which are highly attractive targets for cybercriminals.

Cannabis dispensary owners have to deal with yet another source of pressure: in many states, the current medical marijuana program is a pilot program. Some lawmakers look at it as an experiment and are keeping a keen eye on how the program works before deciding to expand it or close it entirely.

How Can You Achieve Cannabis Compliance?

Medical cannabis dispensary owners already know they need to put robust systems in place to achieve compliance. Not only do they have to meet stringent cannabis industry guidelines, but they must remain compliant with HIPAA regulations, patient data security rules, and more.

Adhering to these regulations is a considerable challenge, even for the healthcare industry’s biggest players – hospitals and giant pharmaceutical manufacturers. These organizations dwarf even the largest cannabis businesses in the country.

The cost of non-compliance is significant. HIPAA regulation is designed to protect patient data and prevent data breaches. The average data breach costs its victim $3.62 million. Cannabis industry business owners should expect to pay between $5000 and $50,000 per patient profile breach.

The only way cannabis dispensary owners can protect their businesses from attack is by treating data security seriously and remaining up-to-date on the latest security threats. Attending a healthcare cybersecurity conference is an excellent place to start.

Cannabis dispensaries operate in a unique cybersecurity environment. Adhering to state regulations for adult and medical use allows states to prepare for an overarching federal regulation process in the near future. There are ways to mitigate data security risks while maximizing the reliability of a dispensary’s technology framework.

1. Implement A High-Quality POS Platform

For cannabis dispensary owners, point-of-sale vulnerabilities stand out among all other security issues in the retail environment. An integrated POS system that has a history of outages and security breaches will cause more problems than it is worth.

Similarly, a POS system that wasn’t designed specifically for the cannabis industry is guaranteed to cause headaches, bottlenecks, and performance issues. Dispensary owners have unique needs when it comes to POS performance – particularly the ability to integrate with the state’s traceability system. Automating data interchange between your POS and the state’s mandated seed-to-sale system is one of the best ways to reduce your exposure to cybersecurity risks.  


2. Insist On Live Customer Support in Your Vendor Agreements

Any POS provider that claims to provide enterprise solutions will offer live customer support with their contracts. Those customer support agreements are crucial. They cover the types of situations that may lead to downtime and give direction on what you can do to mitigate downtime when it occurs.

Without customer support guarantees from a POS vendor, dispensary owners are stuck with a take-it-or-leave-it attitude. POS performance isn’t held to any particular standard, so dispensary owners either have to give it up and implement a new one or grin and bear the costs of doing business with a faulty platform.


3. Work with an Experienced Security Consultant

There is no substitute for experience. The nature of the nascent cannabis industry makes experience all the more valuable to dispensary owners. No dispensary owner has ever owned a dispensary in the United States before, and most states are forced to take an improvisational approach to regulations, often under tight deadlines and with a great degree of political pressure weighing down on their legislators.

Under these conditions, experienced consultants can offer valuable input on nearly every aspect of the cannabis industry. Anyone fortunate enough to have experience should be advising the country’s 5,000+ licensed dispensary owners on how best to serve the needs of patients and recreational users on a state-by-state basis.

Dispensary owners who rely on experienced security consultants can rest assured their dispensary will not make the same mistakes as so many others. This is only possible with a great security vendor who boasts an excellent track record.

Get Free HIPAA and Data Security Certifications From EZGreen

Dispensary owners need to familiarize themselves with the regulations that define the cannabis industry and the healthcare sector as a whole. Because medical dispensaries are essentially pharmacies (in most states, explicitly so), they are obliged to follow the same rules that pharmacies adhere to.

Earning EZGreen’s free certifications is the first step towards building a robust data security solution for a cannabis dispensary organization. Get started today and protect your dispensary from phishing attempts, data breaches, downtime, and all the other pitfalls that come with this highly regulated segment of the pharmaceutical sector.

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