Securing the Joint
Marijuana’s high volume cash business requires tight security in the Mile High City and beyond
Call it what you will, marijuana, cannabis, weed, Mary
Jane or pot, it’s creating a whole new gold rush for entrepreneurs
in an emerging industry, including security
products and services.
Differing Opinions
Colorado’s legal cannabis trade has expeditiously blossomed into
a $1.3 billion dollar industry, according to 2016 tax data from the
Colorado Department of Revenue.
Marijuana has been legal to grow and sell under state and local licenses
since 2009 for medical marijuana, and since 2014 when the
first recreational dispensaries opened in Colorado. The federal government
has a totally different opinion, as marijuana remains illegal
in their eyes.
Medicine Man’s marijuana dispensaries and 40,000 square foot
grow house, or cultivation facility, one of the state’s largest, have been
at the cutting edge of not only specially cultivating marijuana for
consumption, but also the development and customization of elaborate
security measures.
Cannabis purchases remain largely a cash business, as the government
has limited the industry’s banking privileges, creating added
security risks and concerns.
The company’s main dispensary and cultivation facility is located
in the Mile High City, as Medicine Man also has dispensaries in Aurora
and Thornton, suburbs of Denver.
This family owned business intentionally selected a warehouse
site, near Denver International Airport and I-70, just minutes from a
Denver Police Department substation. The facility sits atop a small
elevated berm, which is ideal for security purposes, relating to potential
vehicle smash-and-grabs and other crimes.
Andy Williams, one of Medicine Man’s founders and CEO, has
a heightened awareness of security to protect the staff, customers,
structure, the equipment, and their valuable sweet leaves.
“We are growing a very valuable product that is hard to trace
once it’s stolen and easily turned into cash by criminals,” said Williams,
an engineer by trade and an Army veteran. “It’s important to
protect the facility of course, to protect the investment, because there
is a huge investment in the infrastructure and the building as well.”
From Seed to Sale
Williams noted that all marijuana is tracked online by the state and
his company from seed to sale.
“The damage that an intruder could cause, could cost well beyond
the inventory they might steal, as there are a lot of [cannabis] plants
being cultivated and the damage to the facility itself might cause us
to have an interruption of service,” Williams said.
The nature of the inventory creates a need for security as Medicine
Man’s company believes their business could be the target for
criminal activity.
“Our big concern is that we are a target,” Williams said. “In the
criminals’ mind our business is swimming in cash and we can’t bank
with banks and so, in their minds, they believe that we have a large
store of cash on-site, as well as product that they can steal and sell
readily. Because of that, we are at a higher risk than most businesses.”
Colorado’s Marijuana Enforcement Division (MED) rigidly regulates
this relatively new industry, requiring strict compliance. The
MED is under the umbrella of the Colorado Department of Revenue,
and licensed businesses must comply with a myriad of regulations,
including strict security standards.
The Blue Line Protective Group, retained by Medicine Man, provides
two armed security guards at each of the three dispensaries.
Customers are initially buzzed in at the front door, where an
armed guard checks their driver license or passport. The guard uses
a hand-held scanning device to review and record the magnetic strip
contents for the MED.
A retail marijuana store’s license would be in jeopardy if they have
compliance issues, including selling to people under 21 years old. A
significant compliance issue/s could also result in the loss of all licenses
under which the violation/s occurred. In addition, there is a potential
to lose the license required to operate their cultivation facility.
Blue Line also provides armed services for the transport of cash and
product. Additionally, they provide patrols during non-business hours.
Always On the Monitor
Medicine Man’s master control room contains a monitoring station
for the company’s 127 high-definition surveillance cameras, displayed
on six large screens. The secure room also houses the company’s array
of eight DVRs and a safe in compliance with the MED’s stringent
requirements.
The respective counties and municipalities determine the regulations
as to the length of time to retain archived surveillance footage.
The city and county of Denver requires DVR footage to be retained
for 45 days; Aurora requires 60 days. After that period, all footage is
automatically deleted.
“There has never been a successful burglary of our facility, it’s
just really hard to get into and they will typically set off alarms, they
have every time, before being successful and so our exterior is really
well guarded,” said Williams, sharing that the exterior is illuminated
to assist the surveillance efforts.
Medicine Man will dole out approximately $600,000 for security
expenses this year for their three dispensaries and cultivation facility.
Over time, Williams estimated that Medicine Man has invested
around $300,000 for security enhancements relating directly to the
cultivation facility.
Medicine Man facilities have installed highly-rated security doors
in each of their facilities and incorporated fire, burglar and mechanical
alarms into the mix, along with the addition of motion sensors.
Their access control network is accessed through distinctive keys and
alarm codes.
Williams recounted a recent attempted smash and grab burglary
that occurred at their Aurora retail facility that was effectively thwarted.
Around 2 a.m., four men pulled up in a car, one of the perpetrators
had a gun and a pick ax, while the others had sledge hammers.
“They walk up to the door and they take a big swing with the
sledge [hammer] and the sledge bounces off. All three of them start
pummeling the glass all over the place trying to get in. The guy with
the gun gets frustrated and starts shooting the door. After a couple
minutes of this, they give up and drive away.”
While the attempt a burglary failed, the men would not have gotten
much even if they had gained entry into the facility as all of the
inventory is locked up at night.
“They did this in other facilities, just destroyed it [sic] and it
would have put us out of business for probably a couple of weeks
while we repaired the damage. That bulletproof glass really saved us,”
said Williams, who filed an insurance claim to replace the $80,000 in
bullet-proof glass damaged in the attempted break-in. Aurora Police
later shared that this same group of people had been breaking into
other marijuana facilities in the city.
In the beginning, this now powerhouse cannabis company only
met the minimum security requirements issued by the MED due to
financial constraints.
“The biggest challenge for us was scaling to the point where we
could afford to do security the way it needed to be done,” said Williams
who has developed a system through trial and error.
Guarding Against Crimes
Medicine Man has developed an elaborate accounting system, processes
and procedures to guard against both internal and external crimes.
The company uses panic buttons strategically placed throughout
all of its facilities. Williams recounted that during construction, a
panic button was inadvertently set off. Within 90 seconds, six Denver
Police vehicles and officers responded with guns drawn.
David Behrns, Medicine Man’s manager of IT, shared that all surveillance
cameras are hard-wired into the systems’ multiple DVRs that
are hooked up to a network. Surveillance video can be quickly accessed
by top executives via an encrypted system with a smart phone using
secured passwords through a Virtual Private Network (VPN).
The MED specifies a “20-foot arch of visibility” surveillance be
continually maintained where safety, cash and product are involved,
according to Behrns.
“Surveillance cameras are salt and peppered throughout all Medicine
Man facilities, covering nearly every square inch of the interior
and exterior,” Behrns said.
Cameras keep a constant watchful eye on all staff, licensed owners
and contractors throughout the cultivation process from the planting
area to the flowering room, to the dry and cure area, to the product
room where the cannabis is weighed and packaged.
The MED conducts an extensive vetting process for all employees,
especially the executives who carry a red badge, along with the
investigation processes required and conducted by the respective municipality
or county.
Williams reiterated that the government still considers marijuana
a Schedule 1 Controlled Substance, and if convicted for trafficking,
having a firearm on the premises adds an automatic five years to a
prison sentence.
Armed Guards
The workaround was hiring a third-party vendor to provide armed
and trained security guards. Blue Line provides armed security for
the high-volume cash purchases that goes directly to a bank vault in
the Denver area or another in southern Colorado, as their deposits
are insured by the FDIC.
“I don’t want the fox guarding the hen house after hours,” said
Williams, when asked if Medicine Man had an armed guard inside
their facilities during non-business hours. While trusting the security
staff, he said, “I don’t like leaving individuals in a facility that could
be compromised.”
Relating to cybersecurity, Williams explained that the company has
taken notable measures to prevent hacking, the theft of customer data
and corporate information.
Marijuana sales continue to flourish throughout many of Colorado’s
communities. Security concerns and risk will continue to persist
until the banking issues are addressed and resolved. The high security
risks will continue with the product transfers
from the cultivation facilities to the retail dispensaries.
Over the summer, Medicine Man has contracted
with Helix TCS to provide all security
services replacing Blue Line, as Williams did not
elaborate on the change.
This article originally appeared in the July 2017 issue of Security Today.