What Is A Cannabis Risk Management Plan, And Why Do I Need One?

Just like any other type of business, cannabis businesses need to implement a risk management plan that can help identify potential losses, and take proper steps to safeguard their businesses from these risks.

A cannabis risk management plan, then, is a risk management plan that has been custom- tailored to the needs of a business in the cannabis industry – which has its own unique set of challenges.

In this guide, we’ll discuss the basics about cannabis risk management plans, how they are constructed, and how marijuana security and cannabis security plans can help reduce your risk as the owner or operator of a cannabis-related business.

The Basics Of A Cannabis Risk Management Plan

Risk management is, to boil things down, the process of anticipating a potential loss, and developing a plan to survive that loss.

Someone who owns an apartment building, for example, probably has insurance on the apartment building – so if it burns down, they will be able to get compensation for it – and rebuild it.

The basic steps for the creation of a cannabis risk management plan are as follows:

  • Identify every potential area of loss exposure – There are a huge number of avenues that could cause loss. A defective batch of products may not be able to be sold, a store could be robbed, resulting in the loss of property and cash, or a workplace accident could damage or destroy marijuana products.
  • Evaluate the severity and frequency of each loss exposure – Each potential loss area must be evaluated for its severity, frequency, and likelihood. How likely is a particular event to happen? If it does happen, how serious will the loss be?
  • Consider and select exposure management techniques for each loss – Based on the anticipated severity and frequency of loss exposure, a variety of exposure management techniques can be considered – security personnel to discourage robberies of dispensaries, for example.
  • Deploy exposure management techniques – Next, the chosen exposure management plans can be deployed, protecting your assets, personnel and business.
  • Reassess, review, and evaluate the risk management plan – Once the initial plan has been deployed, it will be periodically reassessed, reviewed, and evaluated to look for areas of improvement, or risks that were not previously identified.

By taking these steps, marijuana-related businesses can quickly identify their biggest areas of risk, and take the proper precautions to minimize this risk.

What Losses Could Face A Marijuana-Related Business?

You may be wondering what events and things could happen in the marijuana business that would require risk mitigation. In most cases, these risks cover 3 broad categories:

  1. People – This could include owners, vendors, employees, customers, investors and more.
  2. People can cause many different types of losses. Employee theft, for example, is a type of loss that can be avoided with proper security. Personal injury to employees can be prevented with proper safety at farms and processing facilities and employee training, and so on.

  3. Property – This includes things like buildings, marijuana-related equipment, crops and raw materials, inventory, cash, vehicles and farm equipment, intellectual property, and all other physical property of the business.
  4. For most businesses, property loss is not a huge vulnerability, because insurance and regulatory agencies help protect them from risk. But property damage and loss is an especially serious risk for marijuana-related businesses.

    Why? Because due to the federal prohibition of marijuana, Marijuana-Related Businesses are denied many standards, protections and insurances that are provided to other companies – including insurance for cash or crops exceeding $25,00, patent and trademark protection from the federal government, and even banking or credit card services.

  5. Profits – This includes all cash flow from the business. Unfortunately, there are a variety of avenues by which profits can be endangered at a marijuana-related business.
  6. Regulatory issues and fines are a big concern. Due to the illegality of marijuana at a federal level and the shifting state, county and municipal regulations, marijuana companies are at risk of penalties from federal agencies like the USDA and DEA, as well as local state and municipal regulators.

    Profits can also be lost due to theft. Since marijuana businesses almost exclusively are barred from using banks, they operate using a cash model – which leaves them vulnerable to increased risks of both insider employee theft, as well as robbery and theft from outside individuals.

The complexities and difficulties of navigating the murky waters of marijuana legislation and risk management mean that it can be very difficult to create a cannabis risk management plan on your own – it’s typically best to turn to an experienced professional in the field of risk management.

What Role Does Security Play In A Cannabis Risk Management Plan?

A comprehensive, well-rounded cannabis security plan is a critical part of any risk management plan. At First Security Services, we’re experts in cannabis security – and if your cannabis risk management plan will require security services, we’re a great choice in California.

We offer custom-tailored cannabis security plans which are designed to meet all of your needs for physical security, video monitoring, and more. We use a five-step process when creating your plan, to ensure that we cover every aspect of the security of your company, assets, and employees.

  1. Facility information – From your facility’s location, to its exterior lighting, access roads and location near emergency services like police stations and fire stations, we leave no stone unturned.
  2. Operational procedures – Our team of security consultants can help you streamline your operational procedures for better safety and security – and develop employee policies, hours of operation, cash handling, and facility opening/closing procedures to keep your business secure.
  3. Safety and emergency response – Proper procedures and training will be implemented to ensure that workers and security personnel alike know how to respond to emergency situations, and prioritize safety and the proper response to a variety of threats ranging from armed robbery to natural disasters and more.
  4. Security ordinance and personnel – We will go over all existing security ordnance, including locks, video monitoring systems, signage and more, and make recommendations for improving your physical security.
  5. Diagrams of security systems – Our final step is to create a comprehensive diagram of your security systems to look for areas of improvement, and create a record of the precautions you have taken to secure your facility.

Security is one of the most important parts of protecting your business from both internal and external threats – and it’s a key part of any risk management plan. So if you need help managing risk at your business, don’t wait. First Security services is here to help.

Contact Us For A Professional Security Assessment Today!

If you think that you should improve the security of your marijuana-related business as part of your cannabis risk management plan, First Security Services is here to help. Schedule a consultation with one of our consultants today – and take the proper steps toward minimizing risk at your company.