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The Risks of Cannabis Cash Payments

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Cannabis Payments

The Risks of Cannabis Cash Payments

Cannabis businesses are putting up with cash payments despite the risks.

January 30, 2024
The Risks of Cannabis Cash Payments


Though cash payments are the most common way to transact in the retail cannabis space, it is not without its share of complications. Transacting predominantly in cash, especially when operating at a high-volume location, can create unforeseen additional costs associated with cash management.

Is it possible that the U.S. will become a cashless society in the future?

With digital payments, e-transfers, and smartphone wallets now seen as the common form of payment, customers may no longer need cash-dispensing ATMs. Cash is still available for now so until that happens, ATMs will stick around.

Cash Risks

Cash risks:

These are some of the risks you face by accepting primarily cash at your cannabis dispensary:

Tax collection fees

Owning a cannabis business comes with a heavy tax burden. In the state of California, there is a $154.40 tax per pound of flower, a 15% excise tax, and a 7.25% sales tax –not including any existing local municipal taxes or fees. Managing income and putting aside funds for taxes is not an easy task when dealing with the physicality of logistics. Paying taxes in cash can become a tricky process and budtenders are forced to find reliable money order systems, which can be time-consuming and dangerous.

Cash theft - Dispensaries are easy targets

‍Any business that is known publicly to have large amounts of cash on hand is vulnerable to theft. Because most regulated retailers in the cannabis industry cannot access mainstream banking services, point of sales transactions are notably done in cash, and funds are not always immediately transferred to a bank account. While some dispensaries allow customers to use debit cards at checkout, these businesses are likely utilizing cashless ATM payments, which violates most payment processors’ policies. 

Budtenders in Washington were held at gunpoint before thieves stole cash and cannabis from a storefront. These days, dispensaries are frequent targets. In fact, there has been such an increase in burglaries that a marijuana advocacy group released a ‘Robbery Preparedness Guide’ to help cannabis retailers implement a comprehensive security strategy. 

Beyond these recommended practices, dispensaries often depend on complex security systems. Loud alarms, floodlights, and videotaping measures certainly help deter theft – however, they are costly for business owners, and are not 100% effective.

Increased time spent by employees counting cash

Contactless payments are so much quicker than counting and exchanging cash. It wastes time that could have been spent checking out more customers before the store closes for the day.

Outside dispensaries, danger follows

‍When it’s time to deposit the cash somewhere safely, the transportation of funds is a high risk process. Even if budtenders or cannabis suppliers take discreet precautions, such as traveling in unmarked or armored vehicles, robberies can still occur –for instance, this supplier got robbed while refueling gas. 

In states where cannabis deliveries are legal, cash transactions create an additional layer of risk for employees and customers alike. With the exchange of goods and cash happening outside the walls of a business, both the delivery person and the customer can be easy targets for burglaries. What can begin as a cannabis transaction, can quickly become something much more sinister

Security threats for employees delivering cannabis

Another major concern associated with cannabis delivery payments has been having cash on hand. Drivers are usually concerned about handling large amounts of cash. Carrying physical cash has always come with a certain amount of risk. That risk greatly increases for cannabis delivery drivers when they’re going door to door for quick transactions. 

No one wants to be targeted just because they are delivering cannabis, and the cannabis industry is more targeted due to the products being sold. Thankfully, digital and contactless payments can greatly reduce the risk of theft for delivery drivers and consumers.

Some emerging markets, like New York, are going as far as mandating pre-payment for all delivery orders. Cashless transactions and digital payments for cannabis delivery in New York allow business owners to deliver products directly to consumers in their homes or private businesses without worrying about keeping track of cash. Logistically it's safer, easier, and ultimately offers the perfect opportunity for licensees to become profitable quicker than ever before.

Transfer of illness

Data collected after the COVID-19 pandemic showed that 51% of customers prefer to make contactless, secure payments for goods and services. Cash has germs on it that are exchanged while contactless payments are made from your own device.

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