In its first week, two things became perfectly clear about California’s legal marijuana trade:
1. This industry is dealing with mountains of cash, and
2. That’s an Everest-sized predicament.
“The concentration of cash is causing so many problems,” said Hezekiah Allen, executive director of the California Growers Association, which represents 1,300 marijuana farmers and vendors.
“This is an absolute top priority for our membership.”
Since federal regulations prevent banks from accepting marijuana-related funds, California’s legal weed industry is cash-only. With sales booming, safely storing and transporting stacks of greenbacks has become a potentially-dangerous headache.
Dispensaries are “high target,” said Valerie Dovifaaz, an account manager with MPS, a Murrieta security firm with marijuana clients in California and Colorado.
“They’re vulnerable because they have a lot of cash on the premises the whole time and the product itself is quite valuable.”
While armed guards and overhead video cameras are common at Southern California pot shops, Bert Gines frets that these measures are more surface than substance.
“They are not taking it seriously,” said Gines, owner of Chula Vista Private Security. “They don’t realize the serious threat because their mind is on a million things while they get a business off the ground.”
Chula Vista Private Security guards patrons and pot at San Ysidro’s A Green Alternative, which Gines insists is a lonely exception to Southern California dispensaries’ bad-security rule. While declining to outline every strategy, he said all dispensaries need armed, well-trained guards who look like a serious barrier to crime.
That look starts with dark apparel that could be mistaken for a police uniform.
“If you look like a deterrent,”Gines said, “you just might deter the bad guys.”
‘Not an easy business’
Last Monday, when state law changed to allow the legal sale of recreational marijuana, it seemed that California had entered a new era.
For growers and vendors, though, the new era arrived with some of the same old problems — just as when marijuana was illegal, the business attracts crooks eager to pilfer the weed and grab the cash.
On Wednesday, the third day of legal recreational marijuana, Allen’s cell phone buzzed with a text. An employee of a licensed dispensary in San Francisco had been attacked after leaving the workplace and robbed of about $7,000 in cash.
“Everyone has to be careful and mindful, definitely,” said Allen, whose California Growers Association is based in Sacramento. “Cannabis is not an easy business to be in.”
Still, Allen has resisted calls for more armed guards.
“If you are moving seven figures in cash, that’s not a great policy,” he said. “Why don’t we deal with the banking issue rather than have armored cars with more armored cars?”
Yet last week’s announcement by the U.S. Justice Department may delay or derail attempts to open banks to these merchants. Attorney General Jeff Sessions reversed three Obama administration decisions to not interfere with states that legalized marijuana.
“That may have scared a few people,” said Sundie Seefried, CEO of Partner Colorado Credit Union, which has done business with her state’s legal marijuana industry since January 2015.
“Some of the credit unions and banks, it’s scaring them and they may have decided to put that money back out on the street.”
That would be a dangerous mistake, Seefried argued.
“This is a big safety issue,” she said. “The first marijuana client I visited, I asked, ‘How do you handle this cash.’ I was told, ‘We go to the ATM late at night and shove in $20 after $20 after $20.’”
Deposited into a personal account, the money was always less than $10,000, because deposits of that size or larger must be reported to authorities.
Still, dispensary employees carrying around four-figure stashes of cash are easy prey — as a San Francisco worker found this week.
“You have 18-year-old clerks making bank runs,” said Dovifaaz, the MPS account manager, “putting all this cash in the back of their Honda Civic.”
‘Get the help rolling’
The risks are found inside, as well as outside, dispensaries. In April 2014, a shootout in a North Park medical marijuana shop ended with one robber dead and a security guard wounded.
At the time, Gines worked for the same company that employed the wounded guard. Reviewing the case, Gines found that his colleague had been caught unprepared.
“He had sat down at a desk, away from the entrance,” Gines said. “They walked in, put a gun in his face and by the time he stood up, it was too late.”
Constant vigilance is required at dispensaries, Gines said. He orders his guards to keep track of cars in the parking lot outside A Green Alternative; get to know customers so, if necessary, they can identify them in court; stay in peak physical condition — “I’ll pay for your gym membership,” Gines said — and never sit down on the job.
“You need to stand tall, you need to be visible,” he said. “If you want to sit down this is not the job for you.”
Customers arriving at A Green Alternative are greeted, then run through a security gantlet. They hand a photo ID to one of Gines’ uniformed employees, whose personal armory includes a 9 mm pistol, pepper spray, handcuffs, Taser, body camera, cell phone and radio.
“If there’s any problem, we call 911,” Gines said. “Get the help rolling.”
After an electronic wand determines customers are unarmed, they are buzzed into a locked waiting room. Individually or in small groups, they then pass through another locked door and into the display room.
Behind another locked door are business offices and several safes, including a walk-in model.
When cash leaves A Green Alternative, Gines said, decoys toting fat valises are sometimes used to lure suspected robbers. Guards patrol the shop and its parking lot, but also prowl the surrounding neighborhood, looking for signs that criminals are casing the place.
“Walk the three blocks, drive the three blocks,” Gines said. “When you come on duty, are you seeing the same vehicles?”
Chula Vista Private Security also drills the drivers of A Green Alternative’s delivery vehicles, training them on responses to hold-ups and other threats.
Gines, who has worked private security for 22 years, said some find his attitude too hard-boiled for an industry that peddles mellowness.
“They want somebody more lenient,” he said. “But I don’t want to explain to somebody’s family why a son or daughter got killed.”