Since legal-weed sales in California began in 2018, cannabis operations across the Bay Area have been regularly hit by burglars and smash-and-grab robbers. The Bay Area has been hit particularly hard. On the weekend before Thanksgiving, at least 25 businesses in Oakland alone, from dispensaries to warehouses to manufacturing spaces, were targeted in an apparently coordinated set of attacks, resulting in an estimated $5 million in losses.
The spree came about one and a half years after a similar set of attacks in 2020, amid the protests over the police killing of George Floyd in Minneapolis, when more than 40 cannabis operations were hit, over a couple of days, up and down the West Coast with—again—the Bay Area seeing the most incidents.
But in between those events, cannabis shops and other cannabis-industry businesses were, and continue to be, regularly targeted in one-off crimes. Cannabis entrepreneurs in Oakland have had enough. After last month’s spree, Amber Senter held a news conference outside City Hall. Flanked by colleagues from other weed companies, Senter, who runs the EquityWorks incubator—which was one of the 25 businesses hit before Thanksgiving weekend—issued a list of demands that included better police response, the elimination of the City’s cannabis tax, and assistance from the City to help with security upgrades. The big, coordinated attacks get a lot of attention, Senter said in an interview. But in between, “we get hit all the time.”
Oakland City Council member Rebecca Kaplan has introduced an ordinance meant to provide some relief to cannabis businesses, and to study the idea of lowering or eliminating the weed tax—which was reduced in 2019, over Mayor Libby Schaaf’s objections.
The pot business is challenging enough, even without all the crime. Profit margins are low, taxes—especially at the state level—are high, and the costs of complying with regulations eats into often-meager profits, where profits exist at all.
But with the crime, the situation is becoming untenable. Many startups have decided to set up shop elsewhere, and existing businesses that were proud to call Oakland home are thinking of leaving. If businesses are left to provide for their own security, the costs could be the thing that finally drive them out of town, and maybe out of the Bay Area altogether.
But even in a new location, they might be stunned by how much they have to shell out for security, given that the cannabis business has become a favorite target of criminals across the country.
“The rule of thumb,” according to Security Executive James Vierra, is that companies should expect to pay “between a half-million and a million dollars” for adequate security: solid doors, cameras, lighting and guards. Vierra is the CEO of Kingdom Protective Services and runs that company’s pot-focused division, the Manteca-based Cannabis Security Group.
Despite all the complaints about the cops’ lack of a response, at least some of the cannabis operators in Oakland and elsewhere have mostly themselves to blame, Vierra said. Their No. 1 mistake: “They cut corners.” They don’t install cameras, or they install them incorrectly. They don’t have strong-enough doors, locks and gates. They don’t hire trained security guards. They don’t vet employees well enough.
This happens, Vierra said, no matter what local ordinances might call for. Many municipalities have strict rules: to get a license, you have to provide a plan for adequate security. But many startups, he said, fail to actually carry out the plans they submit. “Ninety percent of them don’t do it,” he said. And in most cases, he added, officials never follow up, because “they just don’t have time for it.” That’s certainly been the case in Oakland and elsewhere in the Bay Area.
Many observers blame the lack of banking services for the crime. Because weed is still federally outlawed, most banks are at least hesitant to do business with cannabis operators.
At first, this meant weed companies had to deal in cash, which posed massive security risks, with shops filled with piles of cash which had to be transported to a bank for deposit. But many dispensaries have found ways around that hurdle, with alternative means of accepting payments electronically.
Vierra said transporting cash was a major source of business for his company in the early days of legal weed, but now, “I don’t have to do that anymore.” In fact, if a prospective customer asks about such a service, he sees it as a red flag that they’re not really serious about security. If a company is still transporting sacks of cash, “we’re not interested in doing business with them,” he said.
Originally posted on EastBayExpress.com