Four Reasons Why Cannabis Businesses Are A Growing Target For Cyberattacks

By Corey Tobin

In today’s dominantly digital world, there are many attributes that make cannabis businesses tempting targets for cybercriminals.

If you run a cannabis business—be it retail, cultivation, manufacturing or distribution—the question of whether you will experience a cyberattack isn’t a matter of if, but when.

So what’s behind these breaches? What’s at stake? And what should your business consider when developing its digital infrastructure?

Here are the top four reasons why cannabis businesses are often targeted by cyberattacks.

  1. It’s an emerging industry
    A recent report by Experian shows that emerging industries continue to be prime targets for cybercriminals. The reason? Often, these types of operations are more focused on the ins-and-outs of starting and growing their new business than they are about their potential exposure to a cyberattack, leaving them vulnerable.
  2. Dispensaries collect sensitive information
    To comply with state laws, cannabis dispensaries are required to obtain and store large quantities of personal information in their point-of-sale systems. In 2020, tens of thousands of pieces of private customer data from multiple U.S. marijuana dispensaries were stolen. Examples of leaked data included full names, photo IDs, phone numbers, home addresses, dates of birth, medical ID numbers, signatures and items purchased.
  3. The lingering stigma regarding cannabis use
    Some customers may not want the public to know they are utilizing cannabis – even though it is legal in their state. This can include high-profile patrons who wish to remain private and customers who do not want their employers to know they have purchased cannabis products. Whatever the reason, this has increased cyber extortion and ransomware attacks on dispensaries as hackers seek to target and extort personal information of patrons who have purchased cannabis products.
  4. It is an end-user driven industry
    From budtenders to cashiers, to shipping and receiving employees, dispensaries are primarily end-user based operations. Which is why, when it comes to cybersecurity concerns, your employees should be your first line of defense against a cyberattack. It is critical to properly train employees on best practices for safeguarding against cybersecurity risks, such as identifying nefarious emails and protecting customer data – to name a few.

Ultimately, you can’t eliminate the risk of a cyberattack completely. You can, however, make sure you have all the pieces in place to be in the best shape should you experience such an event. And it starts with building effective policy language and coverage.

As a cannabis industry specialist, I can help you stay informed on key coverages to protect your business.

If you have any questions related to your coverage, please contact me at ctobin@boltonco.com or 626-703-1556.

Follow along with Corey on Instagram and LinkedIn for more.

Canadian Provincial Government Taps Spire Secure Logistics

CANADA: Vancouver-based Friday Night Inc. announced today that its subsidiary, Spire Secure Logistics, is providing strategic advice and expertise to a Canadian provincial government for the design and implementation of security programs and infrastructure for the legal distribution and sale of cannabis.

Spire is a leading provider of security consultation for the legal cannabis industry and has worked closely with both government and licensed producers to design and build security programs and solutions for the sector.  The Company will be working with the provincial government to implement program system protocols for both retail and online sales of cannabis, focusing on the prevention of organized crime infiltration and black market diversion.

spiresecure-team-kevin-mead-300x300

Spire’s team of industry experts have amassed more than 50 years’ combined experience in regional, national and international policing and security consultation in a variety of fields.  Most recently, Kevin Mead has been appointed Chief Administration Officer and Director International Programs at Spire. A 23-year career veteran of the Canadian Army, Mead served across the country and internationally in numerous command, training and senior staff positions at the tactical, operational and strategic levels. Mr. Mead transitioned as a Commanding Officer of a Canadian Forces Detachment to the BC Ministry of Labour, as an Industrial Relations Officer responsible for legislative compliance and enforcement. Most recently, Mr. Mead served as VP Operations in a private manufacturing firm in the security and defense industry.

Mr. Andrew Richards, CEO of Spire, commented, “We are pleased to be developing secure and compliant strategies and programs as Canadian provinces and cities begin to implement legal cannabis distribution and sales.” He added, “We welcome Kevin to Spire. His expertise in leading inter-agency and multi-disciplinary teams in complex high-risk operations and program delivery is an asset to the team.”

 

 

Friday Night Inc Acquires Spire Secure Logistic

CANADA: Friday Night Inc. has acquired as a wholly owned subsidiary Spire Secure Logistics Inc. (“Spire”), a Canadian private company specializing in security, intelligence, and compliance with international clients and expertise in both the regulated cannabis industry and other sectors.

Friday Night agreed to acquire 100% of Spire by the issuance of 7,142,857 common shares at a deemed price of $0.70 per share.  Closing is scheduled for March 1, 2018.  Friday Night will allocate working capital of CAD $1,000,000 to expand Spire’s client base in Canada and globally.  The shares issued will be subject to an escrow arrangement that will see 12.5% released from escrow on closing and the remaining 87.5% being released to the vendors in 7 equal tranches of 12.5%, each to be issued on the first day of each quarter of Friday Night’s fiscal year, beginning with May 1, 2018.

Spire provides strategic security consulting in Canada, the United States and Latin and South America. They act for or have acted for licensed producers and ancillary businesses in the cannabis sector. Formed almost 3 years ago by Andy Richards and Jeff Meyers, two career law enforcement professionals well acquainted with organized crime and both the illicit and legal cannabis industry, Spire has quickly become a leading firm for companies looking to ensure their operations adhere to government regulations around security and are best equipped to deter the infiltration of organized crime and black market diversion.  Spire is led by experts with international backgrounds in covert and undercover operations to infiltrate and disrupt organized crime, including outlaw motorcycle gangs, cartels, and other violent gangs. Members of the Spire team have been involved with policy, compliance, and law enforcement in the regulated cannabis industry since its earliest days.

By adding this business to the Company’s portfolio, Friday Night is diversifying its income stream and achieving exposure to international markets.

“The Spire team brings decades of experience in the trenches of law enforcement, security, and high-stakes risk management.” said Brayden Sutton, CEO of Fright Night Inc. “Spire is uniquely equipped to keep companies safe, secure, and compliant – which in turn creates more shareholder value and peace of mind.  I am extremely honored to call the Spire team a part of our family and look forward to the increased level of intelligence and awareness it brings us as a company, whether that be in current operations or when evaluating other opportunities in the sector.”

“Spire works with companies who want to make an honest dollar in a secure, compliant, law-abiding cannabis industry,” said Spire’s CEO Andy Richards, a 34-year law enforcement veteran who has led numerous high-profile investigations of organized drug crime. “Whether it’s regulatory applications, security procedures, or working hand-in-hand with government and law enforcement, our team has the right skills, connections, and experience to deliver.”

Coincident with closing, Andy Richards will join the Friday Night Inc. Board of Directors.

Organized Crime Remains Interested In Cannabis Even After Legalization

By Andrew Richards

One of the arguments for legalizing marijuana is that it takes a source of revenue away from organized crime. However, that is not entirely accurate. Legalization and control of cannabis reduces the mob’s take home pay, but it doesn’t eliminate it completely. The economics of black markets simply makes it too attractive.

Tobacco offers us an excellent model for legal marijuana. The product is legal, it is sold in a regulated market, and the government taxes it to raise revenue and discourage over-indulgence. Where organized crime sees the opportunity is in by-passing the regulations and skipping the taxes.

The experience of the Province of Ontario, Canada, is instructive here. A carton of 200 cigarettes is now so heavily taxed that it costs the smoker C$110 (US$85.50). Sold loose without the tax stamp, the same 200 goes for around $20. As many as a third of all cigarettes smoked in Ontario are contraband. A Royal Canadian Mounted Police “estimate suggests at least 175 organized crime groups dabble in the contraband tobacco trade and use proceeds to fund other enterprises such as drugs and human smuggling.”

In the Netherlands, coffee shops legally sell marijuana, but it is illegal to cultivate it. So, the shops wind up buying from criminals, and while the harm reduction is obvious, the criminal element carries on this its business interests. The nation is working on a regulated cultivation program as a test.

In Colorado, home of American legalization, the Marijuana Unit of the Denver Police Department has doubled its headcount of undercover detectives since 2000, when medical cannabis was allowed. The reason is to deal with organized crime.  Sergeant Aaron Rebeterano says illegal growing operations in the state are increasing. “What we’re seeing now is more organized criminal enterprises where they will do anything to protect those grows. Remember there is a lot of money they invest in them and we do see an increasing number of firearms and other crimes associated with them; home invasions, burglaries, robberies, things of that nature.”

The federal government in Canada plans to legalize marijuana and regulate it, passing the appropriate legislation by July 1, 2018. With only about 3-5% of demand in Canada likely to be met by Licensed Producers (LPs), the stage is set for the current black market to adapt to legalization without missing a beat. The RCMP and provincial authorities will still have plenty to do according to analysts.

However, the private sector can help. The four fields that need addressing are compliance with Health Canada’s rules, design of security platforms using cutting edge technology, secure transportation of product, and insurance to manage risks. Get those right, and the effort organized crime must put in to make a profit becomes onerous.

In the US, the private sector is also addressing cannabis risk management and defense against organized crime. General Cannabis, based in Denver, has an entire subsidiary (Iron Protection Group) dedicated to protecting the legal marijuana industry and run by Iraq and Afghanistan combat veterans.

Only a few die-hard prohibitionists believe that marijuana legalization reduces the overall social harm of the drug, but those who believe that organized crime has lost interest in pot are just as wrong.


Andy Richards is CEO of Spire Secure Logistics, a Canada-based company focused on security in all its aspects in the legal marijuana space, and a seasoned leader in both police services and international private security for high-risk regulated industries. After a diverse thirty-four-year career in three separate police agencies, Andy retired in June 2015 as a Deputy Chief Constable in the Greater Vancouver area.

 

Four Tips When Handling Your Marijuana Business’ Money

By Doug Cunningham

Despite the widespread use of PayPal, Internet banking and credit cards, the use of cash is as widely used as ever. It is passed around the United States from hand-to-hand every day, leaving many businesses vulnerable to exploitation at the hands of counterfeit bills. But there are a number of ways of protecting your business from suffering the effects of counterfeit money, so read through these useful tips and apply them to your business to prevent the damages of fake money.

The marijuana industry generates a lot of cash that banks are often afraid to accept. This is because Federal agencies might charge them with money laundering, and so the marijuana industry has largely been forced to deal in a cash only basis. This poses a legitimate danger, as many marijuana businesses are subject to violent crimes. This makes it necessary for marijuana businesses to take extra care of their money.

Empower your employees

You should take an active role in training your employees to recognize counterfeit money. If you can show your employees the differences between real and fake money, you’ll have a better chance of avoiding the pitfalls of counterfeit money. The easiest way is by comparing a fake with another bill.

Portraits on a real bill will be very defined and stand out from the background. The portraits of a fake will be low quality, they won’t stand out as much as on a real bill, and the background tends to be too dark.

Explain to your employees that they should not make assumptions about customers. Anyone could be handing over a fake bill, consciously or unconsciously. It would be disrespectful to analyze the money given by one person and not the other, so employees should focus on the money, rather than the customer.

Counterfeit Detector PenUsing technology

Investing in CCTV is a first step that any marijuana business should consider. This will allow the business to track anyone who enters, as well as track any suspicious activity that may have gone unnoticed during the day. Cameras should appear at the entrance, as well as have a clear view of the point of sales counter.

You should also purchase a counterfeit detector. Don’t be afraid to spend a bit extra to get the most up to date detector, as counterfeit money is a business itself and is continually changing in order to beat such technologies.

Money Movement

As already noted, marijuana businesses are being targeted by criminals because it is now common knowledge that most use a cash only system. This means that large quantities of cash are often stored in the business’ premises. You should consider a way of moving the money to a safer location to store it. Wherever that location is should be a secret and the money should be stored in a reliable safe. The business owner and trusted employees, such as managers, should be the only ones who know about this, as inside job attacks on the marijuana industry are common.

Safety

You should inform your employees of the correct protocol to follow if they have been given counterfeit money. They should not confront the individual. Delay them and try to take as much information as possible, such as car registration plates and a general description. If you have installed CCTV, this will be much easier. Again, the location of your cameras is really important to get the most effective use out of them. Confronting the individual could be potentially dangerous to the member of staff and other customers.

Installing an emergency button beneath the counter would be a good idea in order to protect your business and its staff. This would also warn off potential attacks on the business if it becomes known that there is an emergency button present on location.

In conclusion, as a marijuana business owner, it is extremely important to take the necessary steps to protect both your own business and your employees. Technologies will help the prevention of counterfeit money being used in the store, as well as warn off potential attacks. Explaining to your employees these simple steps will help them to protect themselves and the store as well.

The Opening Bell Sounds For The Oregon Marijuana Market

By Tony Gallo

OREGON:  On July 1, Oregon became the fourth state to legalize marijuana use, enabling adults to legally possess and grow limited amounts of cannabis for personal use. (Recreational sales begin October 1.) With the legalization, and even before, the industry in Oregon was ramping up to grow, and in the spirit of Oregonians, help each other out.

Case in point is the Cannabis Creative Conference (CCC) which I had the privilege of attending. The  two-day conference, July 29-30,  was sponsored by CannaGuard Security, Chalice Farms and Elevate/Green America and held at the Portland Expo. It was formulated to be ‘from the industry, for the industry” and was developed by Bella Vista Events in collaboration with cannabis industry businesses. The conference was created to share strategies and cultivate important conversations around rules and regulations, marketing and financial strategies, and education.

The kick-off investor summit on July 28 was hosted by MJIC. Speaker Lori Glauser, Director, President and COO of Signal Bay Inc. said she was really pleased at how it all came together so quickly. “It was a terrific audience, terrific speakers. It was a great event and I look forward to more events just like it.”

Day one had a keynote by Steven Marks, Executive Director of the Oregon Liquor Control Commission and Aaron Smith, National Cannabis Industry Association Co-founder and Executive Director. Noah Stokes of CannaGuard Security was Master of Ceremonies. Panels throughout the day included compliance, tips for building an MJ facility and lessons learned, building strategic partnerships and legalities to consider.

July 30 saw a keynote session of Industry Leaders sharing views of the industry’s future. Amy Margolis, Emerge Law Group, Attorney & Shareholder said, “This is really about people educating themselves, then filtering their information through professionals and creating unified talking points that move legalization forward on a local level. The biggest mistake we can make at this point is lack of professionalism and a scattershot approach to implementation,” driving home awareness of what’s really coming. Afternoon panels covered raising capital, cannabis technologies, real estate acquisition, risk mitigation, banking, payment processing and cash management.

The Cannabis Creative Conference was new and different and the estimated attendance was twice what was expected. As Leafly commented, “It was good for us because we did want to reach out and have a variety of people attend…we’ve done a couple of these (events) and sometimes they’re less well attended. I really don’t have enough positive things to say about it.“

The trade show hosted about 70 booths and 15 seminars daily and I was pleased to see cannabis industry leaders such as Rolland Safe, MJBA and RMMC Consulting at the conference supporting the Oregon cannabis business owners.

I also liked that all the presentations were recorded for those who couldn’t attend the conference. In the last few years, I have attended more than a dozen or so cannabis events across the USA and I would rate this one in my top 5 conferences.

Good job and I look forward to this format being used at other cannabis conferences.

Tony Gallo is the Senior Director of Sapphire Protection (www.sapphireprotection.com) with over 30 years in the Loss Prevention, Audit, Safety, and Risk/Emergency Management fields. Tony has a Bachelor of Science degree in Criminal Justice from New Jersey City University and is a member of Americans for Safe Access and the National Cannabis Industry Association.  Tony is considered one of the leading authorities in cannabis and financial loan service security and safety. Contact Tony at tonyrgallo@gmail.com and follow him on Twitter at @SapphireProtect.

Blue Line Protection Group Hosts Free Security And Compliance Seminar For Illinois Medical Marijuana Industry

ILLINOIS: Blue Line Protection Group is hosting a free seminar to cannabis dispensaries, cultivation facilities, and other vendors and service providers to provide information about Illinois’ new medical marijuana industry.

The free medical marijuana seminar takes place on Thursday, January 15, 2015 from 3 p.m. to 6 p.m. at the Holiday Inn Convention Center at 1850 Convention Center Drive in Tinley Park, Illinois. Blue Line personnel will be on hand to provide information about:

  • Security and protection of dispensaries and cultivation facilities
  • Lawful, licensed and insured transportation of product and cash
  • Human resources and professional employment services
  • State and federal compliance requirements for marijuana-related enterprises
  • Banking considerations and how businesses can prepare
  • Secure payment solutions and cash alternatives

“We’re committed to bringing our proven success in providing security, transportation and compliance services to the lawful cannabis industry in Illinois,” said Sean Campbell, Blue Line’s Chief Executive Officer. “Even with the state’s recent delay in announcing marijuana licenses, we’ll continue to reach out to license applicants and vendors in Illinois to help establish best business practices and a solid foundation for a secure and legitimate industry.”

Safety First: Are Security Requirements For Legal Pot Grows Enough?

WASHINGTON:  Washington state’s new pot grow operations have state-required alarm systems, dozens of cameras and tall fences. But some growers said they aren’t worried about theft and violence.

Should they be?

Pot farmer Susy Wilson doesn’t like keys and locks much. Wilson’s farm is in the Columbia Gorge. She’s not too security driven in her life, but at her pot farm she doesn’t have a choice.

“My feeling is that if people are coming in with guns a blazing then I need to get out,” Wilson said. “Otherwise, what is it that I have to worry about? Someone crawling over the fence and stealing a bud?”

 

Washington Marijuana Entrepreneurs Fear Potentially Violent Consequences Of An All-Cash Industry

WASHINGTON: Brian Stroh is not taking any chances.

Aware of the inherent risks associated with his line of work, Stroh pays monthly for armed security guards to assist him in guarded revenue transport and facility supervision. He’s planning to use lockboxes and a variety other methods to store his money, which he will keep away from his home and place of employment. And while he’s taking major precautions, he’s even more worried about the people buying his product.

His business: marijuana production and processing, one of Washington’s first to be licensed since the state legalized cannabis for recreational use.

His worry: the continued federal prohibition of marijuana, which prevents banks from offering any legal financial services to state-licensed cannabis businesses.

Shunned By Banks, Colorado Pot Retailers Beef Up Security To Protect Cash

COLORADO:  In Colorado, sales of recreational pot have been legal for nearly two months, but federal law still brings a major obstacle: Banks won’t take the money. Marijuana retailers are going to great lengths to keep their cash safe.

As marijuana green makes a lot of that other green, it can be both good news and bad news for business owners.

At the pot store called The Health Center, director of operations Tiffany Goldman is nervous. “Security is probably the most important thing that we have to think about in this industry,” Goldman said.

So armed guards transport plants, check IDs and, most importantly, keep an eye on the money.