It almost goes without saying that the cannabis industry is one of the fastest growing verticals in the United States, offering a variety of opportunities for existing or prospective corporations, management services organizations (MSO), business owners and developers as many seek to capitalize on the continued state deregulation of medical and recreational cannabis. In the face of global shutdowns, shelter in place orders, loss of jobs and the ever-present threat of illness, cannabis sales skyrocketed in 2020. A study conducted by Leafly, using state tax and revenue data, showed cannabis sales were up 71 percent over 2019 to the tune of $18.3 billion – a $7.6 billion increase. To date, 19 states have legalized marijuana recreationally, while 36 states have medicinal programs. Some jurisdictions are just now issuing licenses, and more are coming online.
Marijuana’s continued status as a Schedule I drug on a federal level certainly doesn’t make it an easy landscape for prospective newcomers to navigate. Whether you already operate a facility or hoping to open a dispensary, processing or grow operation, there are many regulations to keep in mind – most of which also dictate electronic and physical security requirements. Below we discuss a few ways cannabis grow operators, dispensaries and processors can leverage a video management system (VMS) as a part of their overall open platform security plan.
Licensing Requires a Security Plan
Like any business operation, cannabis requires certain licenses, approvals and audits before you can open your doors. While every state’s regulations and security requirements differ, almost all of them require some form of electronic alarm and surveillance system and audit trails, be it paper or electronic, that must be archived.
Every state, and in some cases, even individual cities or municipalities, that has legalized medical or recreational marijuana has stringent licensing requirements that you must meet before you open, whether you’re a grow operation, edible manufacturer, processing plant, dispensary, or in transportation and the newer delivery services. While these regulations may be different, in almost all cases, it includes having an acceptable security plan in place.
These security plans are heavily weighted as part of the licensing application process. If the security plan is found to be lacking, you lose points. If your overall grade/number fails to meet the threshold, you won’t be issued a license. This puts the pressure on the prospective operation itself to have an effective, well thought-out security plan in place, describing the overall system architecture, including alarm, video, and in some cases access control that allows the integration of other solutions.
In addition, cannabis retailers also need an audit trail working in conjunction with seed-to-sale compliance software, which is ensures cannabis operations are conformant with regulatory requirements.
Video Surveillance Required
While rules differ state-to-state, nearly all fully legalized states require video surveillance 24/7 throughout the entire facility. For example, the average dispensary might have up to 25-40 cameras. A large-scale grow operation could have dozens or more than a hundred cameras to ensure proper surveillance of the product and harvesting process. No matter the business function, the perimeter needs to be protected and there can be no “dead zones,” where a camera’s field of view is obstructed. All hard and soft potential physical security threats (customers, employees, delivery people, packages) entering the premise must be tracked using the video system, along with any human or product movement that occurs within the facility.
To have a compliant security system, operators must have archived video footage in the event of an audit by compliance officers. Regulations vary per state, but video retention times of 45 days, 90 days or even 120 days are common. For the owner of a business, this means everything you do is recorded – from the transfer of product to individual product sales and storage, requiring a robust video solution to archive the footage.
The benefits of a VMS go beyond possible sanctions. For example, if a grow operation moves plants from one end of the facility to another, but doesn’t have video footage of the move, it could be red flag for auditors. While constant video surveillance ensures all operations are compliant, it can also easily show when crimes are committed – such as employee theft. Using video systems, operators will be able to more quickly reconcile product and determine if there are any discrepancies.
Cameras can also help with internal theft with regard to when items are weighed, as they can alert security personnel if the documented weight of a product doesn’t match what it’s estimated to be.
Seed to Sale Tracking
Seed-to-sale is the process of tagging each and every cannabis plant with a barcode or radio-frequency identification (RFID) that allows the tracking of a plant from a grow operation (seed) to cultivation, processing and final sale. For cannabis customers, anything they buy has a batch number, complete with the lot and date – allowing them to find the birth, lifecycle and death of the product. Such tracking measures exceed that of a regular pharmacy, where customers can rarely find such specifics.
Using a video system with a seed-to-sale tracking integration can drastically reduce the burden of compliance and mandatory data tracking on grow operators and dispensaries, as the camera can record an image of a plant’s barcode as it passes by on its way to processing. The image is scanned and tracked with a barcode reader. While this information is also captured in the seed-to-sale software, video images provide a valuable individual record of each of these transactions that can be easily retrieved when need for a compliance audit or investigations.
Video Analytics Optimizes Dispensary Security
Cannabis retail dispensaries faced some of the same challenges from COVID-19 as other retail markets did, including long socially distanced lines and decreased occupancy levels. Video analytics can improve operations by using people counting to speed up queue lines and assist management in ensuring the facility is properly staffed. Video analytics can also be used to monitor the entire facility or operation, inside and out, ensuring the secured space is in fact, secure.
Additionally, integrations with point of sale (POS) and Seed to Sell (STS) systems assist dispensaries with proper reporting software. For example, if a customer buys several products, it will be tracked in the POS/STS software and the facility can use their surveillance system that captured the metadata to ensure compliance, complete with an event-stamped audit trail, should the need arise.
Cannabis Facilities Require Remote-Video Access, Ability to Remotely Investigate
Remote access to systems is in high demand across all sectors of the cannabis space. Even when they are not physically on site, cannabis operators can have instant visibility into their facilities using the surveillance system. With today’s technology, they can have access to video from individual sites in a variety of ways – a local client workstation onsite at the retail facility or in the company’s main headquarters, or from anywhere via a mobile device. They will be able to see if someone has accessed the site after-hours, or if there’s an incident that triggers an event in the alarm, access control or surveillance system. This gives operators the ability to decide whether or not to engage internal or external resources to deal with the issue.
Additionally, where facility size and location are factors, having access to any security or surveillance system, regardless of their location will assist cannabis operators in having a finger on the pulse of their operations. For example, many grow operations are located in remote areas not serviced by traditional copper or fiber ISP’s, or have multiple facilities across states, so it’s vital to have a system that can provide an overview of an entire operation from any location while respecting the pipeline, even if that pipeline is a satellite or 4G cell network.
It’s no secret that cash management is a major challenge to cannabis business operators. As cannabis is still federally illegal at this writing, most banking institutions are hesitant to venture into the market. As such, cannabis is still largely cash-only, which presents some obvious security risks. Having large amounts of cash onsite should be a further incentive to ensure a comprehensive security system and video surveillance solution is in place. Dispensaries must constantly capture POS register information and the entire point of purchase scene, including the buyer to ensure each transaction has a video archive attached to the transaction.
Additionally, the VMS, coupled with edge, internal or third-party analytics can notify local or remote personnel of any suspicious behavior, detect weapons and other objects that might indicate a potential threat. They can also monitor and record the movement of all cash and product through the entire facility.
Consult a Professional
Security challenges to the industry and regulation issues existed long before the COVID-19 pandemic and are likely to continue into the foreseeable future, as more states begin to legalize recreational cannabis. An influx of sales and customers caused by the pandemic means cannabis facilities face even more pressure to ensure facility security and regulatory compliance. Navigating the strict security regulations imposed on cannabis businesses requires a well thought out plan and a flexible solution that can provide enterprise-level surveillance features and scalability. No matter what state the operation is located in, a security system with the necessary capacity to store video footage and remote monitoring capabilities are a must.
Operators looking to open a facility should consider seeking guidance from a security consultant or systems integrator well-versed in the cannabis space and familiar with the regulations and procedures of the Authority Having Jurisdiction. The selection of a solutions provider that offers a flexible and open architecture approach to security can help to ensure their business’ lifecycle compliance from seed to sale.
About the Author:
Brad Wareham has been in the electronic security discipline for over 37 years based in Colorado while covering the North American market. He has touched every aspect of the space from service, installation, project management, ownership and worked with some of the most progressive, forward thinking integration companies in project management and sales positions. Brad joined Salient Systems in March of 2019, where he engages VAR’s, and end users in the corrections, cannabis and logistics verticals.