A bill that could allow electronic transactions at weed dispensaries nationwide is again making its way through Congress but the SAFE Banking Act might not be the cure-all that supporters envision.
In over a decade of operating cannabis shops in Washington, Shea Hynes never once worried about his stores getting robbed at gun point – until recently: In a span of three weeks, his stores were robbed three different times at gun point.
Reports of armed robberies at cannabis dispensaries like Hynes’ have nearly doubled in the first quarter of this year compared with all of last year, according to data maintained by the Craft Cannabis Coalition. The group, which represents more than 50 stores in Washington, has recorded more than 65 armed robberies so far this year, compared with 35 in 2021 and 29 in 2020.
Cannabis businesses in California, particularly in the Bay Area, have also been targeted in robberies. In the last two months of 2021, more than 25 pot shops were broken into and more than $5 million in cannabis was stolen, according to Americans for Safe Access.
The robberies are in line with other crime trends in the Bay Area and Seattle, where reported property crime and violent crime increased by more than 15% last year after declining during the first year of the pandemic.
But the recent string of pot shop robberies has alarmed owners and advocates as the robberies have become increasingly more violent. The latest pot shop robbery in Tacoma left one employee dead – the third deadly robbery in Washington within a week.
In response to the increase of robberies at pot shops, the Washington State Liquor and Cannabis Board recommended post shops to hire armed security, which many shops have opted to do, but has a high cost, according to Hynes.
“A cannabis business has to do about $50,000 to $200,000 a month just to break even. More than the average Starbucks does,” Hynes said. “If you were to add full-time security, you can easily be taking an additional $50,000-plus a month in overhead just for that alone.”
Can Congress solve pot industry’s banking problem?
Since cannabis is illegal at the federal level, pot shops have limited access to banking and financial services, causing them to have a significant amount of cash on hand and making them attractive targets, according to Morgan Fox, the political director for NORML.
Dispensaries are also targeted since individuals can easily profit off cannabis by selling it through unregulated markets, making it fairly easy to get rid of after stealing it, Fox said.
As a way to prevent pot shops from having large sums of cash in store, some advocates and legislators are calling for the passage of the Safe and Fair Enforcement Banking Act, which would protect banks that choose to work with cannabis businesses. The legislation would make is easier for businesses to open a bank account and accept alternative forms of payment other than cash.
“The SAFE Banking Act would be a great incremental step, not only in terms of providing things like banking services and allowing them to do cashless transactions much easier, which would greatly increase the safety of people that work at these businesses, … but it also allows businesses to be able to save money and be able to operate less of the financial burdens,” Fox added.
While the SAFE Banking Act would allow pot shops to convert from cash transactions to digitals ones, potentially reducing the amount of armed robberies, it could lead to uneven opportunities without additional legislation, said Andrew DeAngelo, a cannabis consultant and advocate.
“If the Senate passes that without other comprehensive reforms, the main benefits of the Banking Act will go to big, giant corporate cannabis companies because they’ll also be able to access things like loans from banks,” DeAngelo said. “The small mom and pops or perhaps BIPOC and other folk that are not as well-resourced as corporate cannabis might not be able to get past the loan process with banks … and could cause a playing field that’s not anywhere close to level.”
Amber Senter, the co-founder of EquityWorks! Incubator, is among the many operators in Oakland, California, that was victim to a robbery. Her store, which is a shared manufacturing facility housing three operators, was broken into twice, resulting in about $20,000 worth of damage.
Senter said she doesn’t think the SAFE Banking Act would solve her business’ most acute banking issues, for many of the same reasons DeAngelo cited.
“For me as a Black operator, I don’t think that SAFE Banking helps me with insurance. I don’t think that it helps me get insurance. I don’t think that it helps me get a cheaper bank account,” Senter said.
The SAFE Banking Act has passed the House of Representatives for the fifth time this past September, awaiting its turn on the Senate floor, where it needs a total of 60 votes to pass. Despite the bipartisanship in the House towards the legislation, some aren’t as positive it will pass over to the other side of Congress.
“I still don’t think SAFE Banking has 60 votes to clear the Senate, but until they put it up for a vote, we won’t really know,” DeAngelo added. “I would personally like to see more comprehensive reform passed in addition to the SAFE Banking Act.”
While his shops faced some damages and loss due to the robberies, the biggest cost was in feeling of safety and security among his staff. For a few employees, it caused them to leave their jobs.
“We at Lux wake up to sell good weed to good people, and we like to do that in a way that’s fun and enjoyable, and really value our staff enjoying what they do, and they do,” Hynes, the co-founder of Lux Pot Shop, said. “So, it’s just really tough and violating when you had employees who had guns stuck in their face more than once.”