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One of the leading companies in insurance, Lockton Companies, interviewed our CEO, William Cousins about security measures for a cannabis facility. The following is a reproduction of that interview from Lockton’s Cannabis Advisory Newsletter.

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THIS MONTH’S FEATURE: BILL COUSINS, CEO OF WJ COUSINS & ASSOCIATES

With over 35 years of experience in law enforcement and security, Bill Cousins is a subject matter expert in security consulting, risk management and civil litigation suits. His firm, WJ Cousins & Associates LLC, is a trusted advisor for security and risk mitigation matters in the cannabis industry. Visit them at wjcousinsandassociates.com.

Q: The security measures for my cannabis facility have been inspected and approved by the Marijuana Regulatory Agency. Is my facility considered safe?

A: The short answer is no. Just because you meet the minimum physical security requirements with video surveillance, alarms and access control doesn’t mean your facility safe. You need to have a crisis management plan which includes standard operating procedures for security-related incidents. For example, it should contain step-by-step instructions for adverse events such as armed robbery, workplace violence incidents, and sexual harassment, just to name a few. Your employees need to receive training, so they know how to react and handle such incidents. Failure to have these plans and training not only place your employees and customers at risk, but it also places your entire business enterprise at risk.

Q: I keep hearing about “risk.” How do I mitigate my overall business risk?

A: In order to take your enterprise to the next level, you need to appoint a qualified employee to act as your Risk/ Compliance Officer. Then that officer needs to develop
an overall cannabis risk management framework. This framework is used as a formal plan to identify, analyze and influence potential risk opportunities. It should contain the following six components:

• Internal control environment
• Risk assessment
• Control activities
• Information and communication
• Training
• Assurance

[ Click here to download the original PDF for the interview. For more information about Lockton Companies, click here. ].

 

WJ Cousins and Associates founder, William Cousins, has over 35 years in the security industry—22 years of that spent as a US Secret Service agent. He and WJCA can be of service in these kinds of situations. For more information about WJ Cousins and Associates or our services—security policies, procedures, and crisis management plans—contact them or call them at 248.783.7190 to discuss your security needs.

Teamployer Logo

WJ Cousins and Associates are focused on helping our clients minimize the risks they face every day. One common concern or complaint our clients can relate to is personnel or problems with employees which deal with human resource matters. These problems can be anything from payroll issues to internal diversion issues, to sexual harassment or workplace violence complaints. Since your team members are your “ambassadors” to the customers, these issues need to be addressed in a fair and swift manner, which keeps you compliant with the current labor laws and administrative rulings.

In an effort to provide a solution for our clients, WJ Cousins and Associates has entered into a strategic partnership with Teamployer. They are a full-service company that specializes in providing Human Resources and payroll services to cannabis businesses. Their menu of services cover:

  • HR Administration
  • HR Software
  • Talent Management
  • Time and Attendance
  • Payroll
  • Tax Administration
  • Workers Compensation
  • Employee Benefits

We believe Teamployer is the best company available to ease the everyday administrative burdens and keep you legally compliant and out of the courtroom.

 

Should you have any questions, please feel free to contact us or e-mail our Teamployer representative, Frank Benages, or call him at 734.536.5646.

 

For more information about WJ Cousins and Associates or our services—security policies, procedures, and crisis management plans—e-mail us or call us at 248.783.7190.

Weighing Cannabis-Looping For Diversion

We recently joined the Association of Certified Commercial Cannabis Experts (ACCCE). The association brings together like-minded risk and compliance professionals who collaborate to identify and provide solutions to risks affecting the cannabis industry. As we reviewed some of their resource material, we found an article about “Looping,” which is a tactic used by individuals to purchase cannabis products in excess of the legal limit. The article was written by Brion Nazzaro, President of ACCCE. We found it to be informative and definitely worthwhile for anyone who is associated with the cannabis industry.

By instilling a risk culture starting with tone at top, the company can significantly reduce the potential risks of looping by utilizing the ACCCE Cannabis Risk Management Framework and implementing a risk-based approach. As with many other industries, commercial cannabis has its offenders that, undeterred, could cause significant loss of reputation to the commercial cannabis industry and brands through their actions.

Cannabis products continue to have a large demand on the illicit market, and it is the risk professional’s responsibility to guard against diversion. To prevent diversion, jurisdictions commonly have limits on the amount of cannabis a consumer is able to purchase in a single transaction. To get around the limit, a criminal or group of criminals may practice looping.

The Looping Example
Looping is the practice of evading the legal cannabis purchase limits by buying cannabis products at or below the legal limit repeatedly during a limited time period to obtain an illegal amount of cannabis product. The name comes quite literally from people going into the dispensary to purchase the maximum amount of cannabis, taking it to their car, and looping back around to the dispensary to repeat the process multiple times within the same day or even the same hour.

The looping case against a large Colorado commercial cannabis business was the first of its kind and included budtenders, managers, and owners who received hefty fines or jail sentences. The Denver Police Department was initially tipped off after a citizen noticed seeing several people making multiple trips each day to and from their parked vehicles to the store, continuing these loops for several hours at a time.

It is not always this straightforward to catch looping. Looping can involve a single consumer, multiple consumers working together, inside collusion, and multiple stores. To manage the risk of looping, risk officers need to implement risk-based controls to keep their consumer sales locations safe from looping schemes and tactics.

“It is not always this straightforward to catch looping. Looping can involve a single consumer, multiple consumers working together, inside collusion, and multiple stores. In order to manage the risk of looping, risk officers need to implement risk-based controls to keep their consumer sales locations safe from looping schemes and tactics.”

How to Reduce Looping Risk
The risk officer should help the commercial cannabis business owners or executives craft a policy to prevent diversion. It is important for the owners or executives to set the tone and establish the company’s intent to control diversion to enable the risk officer to effectively mitigate looping risks. The intention of the policy is to demonstrate to employees and vendors the commercial cannabis business’s reasonable efforts to control their points of diversion.

The risk officer should conduct a risk assessment that indicates the likely looping schemes to which the commercial cannabis business is exposed, or may be exposed. For example, a customer base that routinely buys near the legal limit may increase the chance that loopers are hiding in legitimate transactions. Similarly, in judging your geographic risk, being near a jurisdictional border may increase the likelihood that out-of-state loopers have access to a commercial cannabis business location. The risk assessment allows the risk officer to focus efforts on the most likely looping scenarios first and has the most effect on reducing overall looping risk.

Having identified the highest looping risks, the risk officer will then need to engage all staff to determine the control activities that will mitigate the inherent risks of looping identified in the risk assessment. Each commercial cannabis business will have a different looping risk profile, but there are standard controls across consumer sales that create a strong foundation. Creating a process for employees to raise looping concerns directly with the risk officer allows the commercial cannabis business to react quickly to poor controls or changes in their risk profile. Monitoring cannabis product transactions that are close to, or at the maximum purchase limit, throughout all locations is an effective means of identifying potential looping schemes.

To effectively manage looping risk, the risk officer should create reports that help management and the owners understand the effect of their work and present the results periodically. Standard reports should be created to assist management in understanding the scale and scope of looping risk. This should allow management to make appropriate risk-based decisions that consider this risk. For example, the level of looping risk at a commercial cannabis business may inform the extent of dual control expected at a store location.

A comprehensive risk program also includes risk-based training. Depending on the risk level of looping, the frequency of training may be more or less; however, it is common practice to have all consumer-facing employees trained to spot consumers exhibiting suspicious behaviors. Risk-based training should include how to spot red flags of looping with a focus on the looping schemes that were identified as highest risk in the risk assessment. Training should also include how to report suspicious activity to the risk officer.

Conclusion
Looping will always be a risk for commercial cannabis businesses. To make sure anti-looping mitigation remains effective and efficient over time, the risk officer should consider periodic assurance activities. Some common assurance activities include hiring a secret shopper to visit storefronts to test controls, monitoring the number of suspected or confirmed looping attempts over time for increases, or conducting periodic audit of controls. These activities will assist the risk officer in balancing the cost of mitigation with the risk the business faces.

An effective risk-based approach to control looping will reduce the chances that a commercial cannabis business will be targeted by organized criminals attempting to divert product to the illicit market. A legal commercial cannabis business found complicit in looping could cause a loss of reputation or even loss of the commercial cannabis license. Not every looper can be stopped, but implementing an effective cannabis risk management framework can reduce the likelihood that a commercial cannabis business is found complicit in looping activity.

 

This article highlights a significant vulnerability, faced by cannabis businesses every day. It brings attention to the threat not only being from external sources, but also from complicit or untrained employees, too.

So, can the “looping” tactic be totally stopped? Well, the answer is “No,” but by implementing simple measures and documented protocols into your Risk Management Framework (RMF), you can minimize your exposure.

 

Now then, what are the steps the cannabis business should take? Well, WJ Cousins and Associates recommends that a business first have a risk assessment conducted to identify any weaknesses in your current protocols and record keeping. Once any weaknesses have been identified, employees should be trained, and new protocols should be documented.

 

For assistance in this and many other concerns regarding a cannabis business, do not hesitate to contact us. We are here to assist you in protecting your business.

 

[ Article Credit: Brion Nazzaro, November 2, 2020 | Category: “Cannabis Risk Management Framework, Organized Crime.” The Association of Certified Commercial Cannabis Experts (ACCCE) is dedicated to advancing the professional knowledge and skills of those committed to commercial cannabis risk management. (Link to original article) ]

Cannabis Photo-Credit: Little Ivan

SECURITY ADVICE – CANNABIS

Failing to adequately plan, budge for security can have devastating consequences for market upstarts.

Author: Joel Griffin
June 24, 2021

All told, 36 states have passed laws permitting the use of medicinal marijuana and at least 18 have legalized recreational cannabis use thus far. While many see this as an opportunity to cash in on a fast-growing industry, the reality is that there are still significant barriers to entry for those that want to grow and sell cannabis.

With each passing year, the obstacles that once stood in the way of legal cannabis consumption – both medicinal and recreational – are falling by the wayside. This year alone, New York, New Mexico, and Connecticut have moved to legalize recreational cannabis use, while Alabama lawmakers recently approved legislation that will allow medical marijuana to be prescribed to patients suffering from a variety of illnesses and diseases.

All told, 36 states have passed laws permitting the use of medicinal marijuana and at least 18 have legalized recreational cannabis use thus far. This has led to a boom in both marijuana cultivation and dispensary operations throughout the nation, but while many see this as an opportunity to cash in on a fast-growing industry, the reality is that there are still significant barriers to entry for those that want to grow and sell cannabis, not the least of which includes a substantial investment in security.

According to Bill Cousins, founder of Michigan-based WJ Cousins & Associates, a security consulting firm that specializes in the protection of cannabis operations, business owners in the space must realize that their primary security responsibility is the safety of employees as well as their patients/customers, which means that they should build their security program around safeguarding human life within the facility or on the property in addition to protecting the product itself.

“Everything needs to be video recorded; any movements of individuals or cannabis should be recorded, according to the required state laws or regulations,” Cousins explains. “As I tell my clients, think casino. Anywhere you go you should be on camera and anywhere product goes it should be on camera.”

Of course, there is also a stark contrast between the security measures that are required at a cultivation facility where there are a set number of employees that have all undergone a background check versus a retail location in which anyone can walk off the street into the establishment.

“Everything still has to be recorded by a video surveillance system, but you don’t have the overall responsibility for patients or customers. Your cultivation facility is going to have the same requirements but a different degree of responsibility,” Cousins explains. “The cultivation facility may have only 10 employees whereas a provisioning center may end up processing 100 to 200 patients a day coming in and out from the street.”

And while security requirements may vary by state, Cousins says that the principles remain the same for the cannabis industry.

“Some states set standards of minimum requirements for the security cameras where other states don’t. In Michigan, they don’t set the standard, however; the cannabis facility is on notice that the state at any particular time – the marijuana regulatory agency or the state police – can access your cameras and monitor your activities within the facility,” he adds. “That would prohibit sort of your lower end cameras like you might buy at Home Depot or something like that, so it would require that they be professionally installed by an integrator.”

Seed-to-Sale Tracking
Cousins says it is also imperative that cannabis business operators go above and beyond when it comes to leveraging event tracking solutions for auditing purposes.

“In Michigan, for example, they use the Metric (regulatory cannabis event tracking software) system for following seed-to-sale of any cannabis products. Every state is going to require something similar, but Metric is a popular software system that is in use. I also strongly recommend a backup system, or what I like to call a ‘proprietary system.’ There are number of them out there… but you should have a dual audit system – one with Metric and one with your proprietary and the proprietary systems that are out there are very good and the majority of them will interface with Metric.”

In the event a dispensary receives a secure shipment of product, for example, if it is scanned into both systems and there is an outage or some other unforeseen event, then the business owner has an adequate backup system to provide corroborating data or even additional details to regulators during an inspection.

Pitfalls to Avoid
According to Cousins, one of the biggest missteps that those entering the cannabis industry make is failing to adequately plan for security.

“When you decide to get into the industry and apply for a license, you need to surround yourself with good people – people that are professional: a good attorney to write your application, a good security consultant to help you design your security plan,” he advises. “People think, well, ‘I can do this myself; I can write my own security plan.’ The problem with that is yeah, they might be able to put pen to paper, but if something occurs on the premises afterwards, you are liable.”

For instance, if there is an armed robbery at a dispensary, a patient or customer, whether they were physically injured or not, could file a lawsuit against the business over the fear that was inflicted during the incident.

“We’re in such a litigious society here in the U.S. that I’m going to make all kinds of allegations like, ‘I can’t sleep at night, I have headaches, I can’t go back to work, my relationship with my partner or spouse is damaged beyond repair because of this, I’m so traumatized by this incident.’ Well, if you write your own security plan, there’s going to be a lawsuit and how are you going to defend your security plan in a lawsuit? You’re not, you can’t because you don’t have the knowledge and the training to do it,” Cousins chides.

Another common error newcomers to the industry make, according to Cousins, is underbudgeting for the security services and technologies that will be needed to secure their facilities.

“At the beginning, I’ve seen a lot of clients come in and I ask them if they are funded for this project and they say, ‘Oh yeah, we’ve got plenty of cash.’ Then when it comes down to buying the equipment and getting the integrator, well money is tight at that point, so they have to go with a lesser quality camera system and, of course, they are all required to buy alarm systems and access control too,” Cousins adds. “People just aren’t budgeting for security. They consider it a necessary evil, but in fact they do get a significant return on their investment in the event something occurs.”


About the Author
:
Joel Griffin is the Editor of SecurityInfoWatch.com and a veteran security journalist. You can reach him at joel@securityinfowatch.com.

[ SecurityInfoWatch.com is the industry’s first responsive design website that is the gold standard in the security industry for providing breaking news, original content, product information, thought provoking technology analysis, webinars, e-newsletters and active discussion forum. ]

[ Click here to see the original article as well as to view more information on the Security Info Watch website. Image courtesy: Little Ivan/bigstockphoto.com. ]

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