Cash Management Tips for Cannabis Retailers
The use and possession of cannabis remain illegal at the federal level. According to the DEA, marijuana is categorized as a Schedule 1 substance. The situation has dramatically affected the banking sector of the cannabis business operating at the state level. Most banks and financial institutions don’t want to handle any financial transactions related to cannabis businesses. Thus cannabis businesses have been forced to rely on cash payment methods.
The federal government hasn’t legalized the use of marijuana; therefore, business owners can't store any cash generated from cannabis-based businesses in national banks or financial institutions. Most cannabis businesses predominantly use cash payments as their operations' primary payment method. Handling cash payments is risky and has increased robberies and crimes targeting cannabis retail stores.
Additionally, cash payment systems make it cumbersome for businesses to calculate the overall taxes they are supposed to pay the state and federal government. Despite facing many challenges, there are some essential cash management tips that cannabis businesses can implement to enhance the whole process.
Curating a loss prevention strategy for the internal team
While most cannabis businesses face significant external threats which facilitate the loss of money through cash management, loss of cash starts from inside the business. When using cash as the primary payment method, your staff will be frequently exposed to a large amount of cash while working, which is very tempting. Curating a working culture based on compliance is the first step. Every staff working for the businesses needs to understand and uphold compliance at all times.
Limiting staff permissions is the next step. Only some employees need to have access to everything in the business. Using POS systems that are specifically designed for the cannabis industry will help in limiting the access of employees by giving an efficient way of tracking everything and getting real-time inventory management. The best high-end POS system will track and give you frequent updates on employee activity.
Improving the store’s physical security
Every business that handles cash payments needs a high level of physical security. It acts as the first wall of protection against internal and external threats. Investing in the best security agencies will ensure your business, customers, and staff enjoy maximum security and safety. A reliable, professional security service provider will be able to identify the loopholes in your security and make the necessary recommendations.
They will come with measures to help you contain the security in your business premise without affecting the business operations or customer experience. Installing security cameras in every room is highly recommended. Research and pick the best surveillance system in the market.
Implementing safe storage policies
With a lack of reliable payment systems for cannabis businesses, your retail store will always have some cash present at any given time. Hence it’s crucial to have measures and policies to ensure the cash is kept safe at all times. The first step is keeping the cash storage safe at all times from the public eye. Once you are done using the storage safe, you should move it to a secure room that is only accessible to specific employees.
Look for local banks or financial institutions within your state which are cannabis friendly. These financial institutions will help you in storing your cash safely. When the cash is still on site, it needs to be stored in a safe, which is in a secure room. It would help if you tried to keep as little cash as possible on the cash register. There are plenty of state-based financial institutions which are willing to work with cannabis retailers.
Investing in safe transportation
One of the challenges of cash management systems is moving the cash from the business premise to a more secure place like a financial institution. While you might have the highest level of security at your business premise, having a poor transport system will put your hard-earned cash and staff at a higher risk when moving the money. Investing in an armored vehicle is the first step, and ensure your staff have the necessary training and skills should they face any challenge.
Every staff member involved in transporting the cash should take the necessary precautions, so your business doesn’t become a target. Frequently changing your transport schedules and keeping the identity of the people involved anonymous will help enhance the anonymity of your cash transportation routine and schedule. Always have an armed security guard with you when transporting the cash.
Limiting the number of people who have access to information related to cash transportation will also enhance security. Hiring a reliable security service provider will help in ensuring safe and secure transportation of cash at all times.
As cannabis businesses continue to expand their operations to meet the ever-growing cannabis market, they need to take all the necessary precautions. Most cannabis has been easy targets for armed robbers and thefts due to careless mistakes related to cash management. Such scenarios cause you to lose money and put your customers at risk of being targeted by armed robbers.
As you have read in this article it is not as straightforward as other industries. Operating a cannabis business is extremely difficult, and not having the know how can really affect your bottom line. Vende POS is made to help its clients run the business they have always wanted. Providing you with all the necessary tools for your business to succeed is our goal. Schedule a demo with us today and see how running your business on the Vende platform can help.