With a spike in robberies hitting marijuana businesses across the U.S., a leading cannabis advocacy group is providing the industry with resources on how to prevent and respond to theft.
Americans for Safe Access (ASA) developed its Robbery Preparedness Guide in response to growing reports of targeted crime at marijuana retailers. In San Francisco alone, there are reports of more than 25 break-ins and millions of dollars of damage and stolen property in the past two months.
“We know this is an issue nation-wide, and we want to do our part to help ensure that all dispensaries remain secure, their staff and patients feel SAFE, and that products continue to be available to patients,” ASA said.
The group’s free guide is meant to “aid businesses in developing plans to stay safe during robberies and adopt policies to help prevent robberies and burglaries.”
“No one wants to think about robberies and burglaries, but they are a reality for all businesses, particularly retail operators. Even if your staff or fellow employees are not talking about robberies, they are thinking about them,” the guide says. “Most robberies are premeditated and depend on an element of surprise and confrontation. This means that robbers are looking for weaknesses in a business’ security that would make the operation a tempting target.”
ASA recognized that marijuana businesses are already more vulnerable to being targets of crime because many operate on a largely cash-only basis because they lack access to banking and other financial services.
The rise in cannabis robberies has also been cited by lawmakers who’ve been pushing for the enactment of legislation to protect banks that work with state-legal cannabis businesses. They’ve argued that the public safety risks created by the current system underscores the urgent need to pass the Secure and Fair Enforcement (SAFE) Banking Act. Yet despite passing the House in some form five times now, the reform has been blocked in the Senate under Republican and Democratic control, albeit for different reasons.
“It is common knowledge that cannabis businesses have issues with traditional banks, which already makes them targets, but robbers also look for easy getaway potential, employees working alone, and businesses that are isolated,” ASA’s guide says. “Robberies happen quickly, so it is important that all staff know what is expected from them during and after an event.”
Tips included in the guide are broken down into five categories: preparation, during a robbery, after a robbery, in case of burglary and other considerations on providing sufficient security.
It encourages businesses to take steps like implementing clear policies on locking up shop, managing and storing inventory, having visible security cameras, installing alarm systems, frequently changing the time of day that cash is transferred from the store, cooperating with robbers to get them to leave as soon as possible and contacting law enforcement after a theft.
In response to the robbery surge, members of the marijuana business community in Oakland, California last month called on state and local officials to provide “tax amnesty.” The organization Supernova Women, which organized the event, said the relief would help sustain small and minority-owned firms that have faced up to $5 million in losses following the robberies.
ASA also recently distributed materials to thousands of California hospitals on how to implement a new law requiring them to permit certain patients to use cannabis at their facilities.
Banking Activity Increases In States That Legalize Marijuana, Study Finds
While marijuana businesses often struggle to find banks that are willing to take them on as clients due to risks caused by the ongoing federal prohibition of cannabis, a new study found that banking activity actually increases in states that legalize marijuana.
The research doesn’t make a direct connection between state-level marijuana reform and the increased activity, but it does strongly imply that there’s a relationship—even if the factors behind the trend aren’t exactly clear.
Researchers set out to investigate banking trends in states that have legalized cannabis, looking at bank regulatory filings with the Federal Deposit Insurance Corporation (FDIC) from 2011 to 2016. They found evidence that “banking activity (deposits and subsequent loans) increase considerably in legalizing states relative to non-legalizing states.”
That’s in spite of the fact that banks and credit unions run the risk of being penalized by federal regulators for working with businesses that deal with a federally controlled substance.
“While uncertainty can result in overly cautious behavior and hinder economic activity, we do not find evidence of this with cannabis laws and the banking industry,” the authors wrote in the new paper—titled, “THC and the FDIC: Implications of Cannabis Legalization for the Banking System.”
The study analyzed data from “150,566 bank-quarter observations from 6,932 unique banks located in 46 different states.” It found that deposits increased by an average range of 3.14-4.33 percent—and bank lending increased by 6.54-8.62 percent—post-legalization.
“Our results indicate that deposits and loans increased for banks after recreational cannabis legalization.”
Of course, it makes sense that legal states would see increased financial activity in the banking sector after opening a new market, even if only some banks choose to take the risk of working directly with cannabis businesses. The emerging marijuana industry also supports an array of ancillary firms and traditional companies that provide services to dispensaries and grow operations.
As of June 30, there were 706 financial institutions that had filed requisite reports saying they were actively serving cannabis clients. Thats up from 689 in the previous quarter but still down from a peak of 747 in late 2019.
But the question remains: why are some banks deciding to take on marijuana clients while others remain wary of federal repercussions?
The study authors—from the University of Arizona, Drexel University, San Diego State University and Scripps College—put forward two possibilities about why “the risk from regulatory uncertainty did not decrease banks’ willingness to accept deposits or make loans.”
The increase “may suggest that banks were either unconcerned about the potential risk associated with accepting cannabis related deposits or optimistic about the chances that regulations will adapt to the needs of legalizing states,” the paper reasons.
Confidence about working with a federally illegal industry may well have been bolstered in 2014 when the Financial Crimes Enforcement Network (FinCEN) under the Obama administration issued guidance to financial institutions on reporting requirements for cannabis-related businesses.
The second option, optimism about federal reform, also seems possible. It was around the time that the bipartisan Secure and Fair Enforcement (SAFE) Banking Act was first introduced that there was a notable spike in financial institutions reporting that they have marijuana business clients.
In the years since, that legislation has been approved in some form five times in the U.S. House of Representatives, but it’s continued to stall in the Senate. In general, banks reporting marijuana accounts has remained relatively stable since 2019.
“Although many have speculated about the increased legal risks to banks, there is a lack of evidence for instances where banks are criminally prosecuted or lose their federally insured status,” the study states. “If these negative repercussions rarely happen, it makes sense that banks would not respond to the legislative uncertainty.”
“As more state regulators issue statements in support of banks and credit unions serving the cannabis industry, the financial institutions can become more optimistic about the chances that regulations will adapt in their favor with time,” the authors wrote.
Despite optimism for future reform that certain lawmakers have expressed, it doesn’t necessarily take the sting out of the latest failed attempt to secure protections for banks that choose to work with state-legal cannabis businesses as part of a large-scale defense bill.
A pro-reform Republican senator recently slammed Democrats for failing to advance marijuana banking reform despite having a congressional majority and control of the presidency.
For what it’s worth, the secretary of the U.S. Treasury Department recently said that freeing up banks to work with state-legal marijuana businesses would “of course” make the Internal Revenue Service’s (IRS) job of collecting taxes easier.
With respect to the SAFE Banking Act, a bipartisan coalition of two dozen governors recently implored congressional leaders to finally enact marijuana banking reform through the large-scale defense legislation.
A group of small marijuana business owners also recently made the case that the incremental banking policy change could actually help support social equity efforts.
Rodney Hood, a board member of the National Credit Union Administration, wrote in a recent Marijuana Moment op-ed that legalization is an inevitability—and it makes the most sense for government agencies to get ahead of the policy change to resolve banking complications now.
Colorado Earned $423 Million In Marijuana Tax Revenue Last Year
More than $12 billion in marijuana has been sold since legalization in 2014, with the state collecting over $2 billion in taxes.
By Robert Davis, The Center Square
Colorado brought in a record $423 million in tax revenue from marijuana sales last year, according to the latest market report from the state’s Department of Revenue (DOR).
In all, Colorado has sold more than $2 billion in marijuana through November 2021, making it the second consecutive year that the state has eclipsed that mark. In 2020, the state collected $387 million in taxes from the sales.
Colorado’s tax revenue total also implies that the state beat its previous record of $2.1 billion in sales, though DOR said it will release the final numbers next month.
More than $12 billion in marijuana has been sold since legalization in 2014, with the state collecting over $2 billion in taxes.
🚨New record alert!🚨 In 2021, Colorado collected over $423 million in revenue from marijuana sales (compared to the previous record of over $387 million in 2020). Colorado also surpassed $2B in tax and fee revenue and $12B in marijuana sales to date. https://t.co/M5zrEiSNYR pic.twitter.com/XxpZzyV1XQ
— CO Dept. of Revenue (@CO_Revenue) January 12, 2022
Colorado collects its marijuana taxes from a 2.9 percent state sales tax on marijuana sold in stores, a 15percent state retail marijuana sales tax and a 15 percent retail marijuana excise tax on wholesale sales and transfers of marijuana. The state also collects fee revenue from marijuana license and application fees.
In December, Colorado collected more than $30 million in taxes, capping off a five-month streak of declining tax revenue.
The state also recorded more than $158 million in sales in November, with both medical and recreational marijuana showing significant declines in sales.
Colorado sold $131 million in recreational marijuana in November, an 11 percent drop when compared to October.
Similarly, November’s medical marijuana sales totaled $26 million, representing a drop of more than 10 percent on a month-over-month basis.
Arizona Hits Recreational Marijuana Sales Record, With New Program Catching Up To Medical
Medical cannabis sales eclipsed recreational from February through October—adult-use sales began on January 22—but in November, those numbers were almost identical.
By David Abbott, Arizona Mirror
Arizona cannabis sales continued on an upward trajectory in 2021, with the Arizona Department of Revenue reporting more than $1.23 billion in combined cannabis sales through the first 11 months of the year.
In November, adult-use recreational cannabis sales hit a new peak and crossed $60 million for the first time. Medical sales have fluctuated throughout the year, topping out at about $73 million in March and April.
Medical sales eclipsed recreational from February through October—adult-use sales began on January 22—but in November, those numbers were almost identical, with the medical program bringing in an estimated $60,365,545, while recreational sales reached $60,299,191.
In October, estimated cannabis sales for both programs were within $7 million of each other, the first time recreational sales came within $10 million of medical sales. But the adult-use market is in its infancy and is expected to match the medical program’s economic heft within a few years.
Cannabis sales also provided a solid tax contribution in 2021.
|PERIOD COVERED||ADULT USE‐420||MEDICAL‐ 203||EXCISE TAX|
The state collects 16 percent excise tax on recreational sales in addition to the standard sales tax; medical patients pay a 6 percent excise tax. Local jurisdictions charge an additional 2 percent or so for all marijuana sales.
Taxes collected in November for recreational cannabis sales were $5,055,950, with medical slightly less at $5,026,317. The excise tax reached $10,110,032 for a total of $20,192,299 in tax revenue from November marijuana sales.
Proposition 207, which voters approved in 2020 to legalize adult use of cannabis, included specific uses for taxes collected on the recreational side. One-third is dedicated to community college and provisional community college districts; 31 percent to public safety—police, fire departments, fire districts, first responders—25 percent to the Arizona Highway User Revenue Fund and 10 percent to the justice reinvestment fund, dedicated to providing public health services, counseling, job training and other social services for communities that have been adversely affected and disproportionately impacted by marijuana arrests and criminalization.
The state collected a total of $196,447,570 in tax revenue the first 11 months of 2021 from cannabis sales, with $44,533,436 from recreational, $58,916,172 from medical and $92,997,962 from the excise tax.