There are only 10 states left in the USA that have yet to legalize cannabis for either medical or recreational use. The result is a swiftly growing industry with a popular front-line retail store model in the form of dispensaries.
But this exploding business has a big problem when it comes to accepting payments. Cannabis is still illegal under federal law, classified as a Schedule 1 Controlled Substance. Since the financial industry operates under federal law, any bank or credit union accepting a dispensary account is at risk of aiding and abetting a federal crime or money laundering.
A select few institutions have been willing to bank cannabis as long as they comply with the 2014 FinCEN Guidance. However, these banks and credit unions are extremely selective and do not generally advertise a willingness to provide accounts to dispensaries. Companies who have managed to land a bank account usually find themselves subject to additional fees, account freezes and heavy auditing.
For these reasons, many dispensaries have thrown their hands in the air and decided to resort to a cash-only business.
The Problem with Cash
Large quantities of cash are… tempting. The threat of robbery is a general concern for cash-heavy businesses. Cannabis dispensaries are at increased risk of losing a significant portion of their profits to a heist when they are a cash-only establishment. It does not help that the majority of states post the locations of their dispensaries online. But outside theft is not the main concern for most dispensary owners and managers. The real threat is on the inside. The majority (90%) of theft for dispensaries is internal.
In addition to employees skimming cash, the amount of time it takes to handle money can eat up associate time and potentially reduce overall sales volume. Many managers report spending a minimum of 20 hours per week dealing with cash. Some dispensaries with higher volumes hire employees specifically to count and log earnings.
And what of the customer experience? How fast are their transactions being processed when so much time is spent counting bills and coins?
How Cash Recyclers Help
Cash recyclers are designed to count, check and dispense funds for cash-intensive businesses. Their accuracy and reliability is so impressive that many banks and credit unions now rely on cash recyclers for their branches.
Affordable cash recyclers can be installed and configured for a variety of purposes including:
Automating till dispenses and returns
Tracking transactions for auditing against cash deposits
Detecting counterfeit money
Monitoring cash inventory in real-time
Limiting access to cash based on unique employee user IDs and access levels
Improve customer experience through faster cash counting and dispensing capabilities
As an added bonus, keeping funds locked up and not generally accessible can help prevent loss of profits should a robbery take place.
Why Dispensaries are Turning to Cash Recyclers
Dispensaries are facing a serious dilemma when it comes to sales and money management. Reduced access to banking accounts have limited their ability to accept payments outside of physical cash. Fortunately, cash recyclers can help minimize the potential risks of running a cash-only business by limiting touchpoints, accurately counting funds and providing a safe place to store large amounts of currency.
To learn more, contact Contact Jeremiah O’Connor by email or at (415) 483-1524 for a free, no obligation consultation. Or click here to schedule a meeting.
Download our cash recycler brochures CIMA AST 7000, CIMA AST 7016, CIMA AST 9000 to find out how partnering with MVP can benefit your cannabis business.