Running a cannabis dispensary involves handling substantial cash transactions, which makes implementing effective cash management practices critical, especially with the recent crackdown on cashless ATMs and digital payment methods. Neglecting proper cash management exposes your business to various risks, including theft, counterfeit money, and compliance issues. In this blog post, we will dive into the best practices in cash management for dispensaries and provide you with tips on how to stay on top of everything. By focusing on assessing potential risks, securing cash, and implementing ID verification systems, you can ensure the safety and success of your cannabis retail business.
Assessing Cash Management Risks and Mitigating Losses
As cannabis is still illegal federally in the US, dispensaries often deal with large cash volumes, making them susceptible to security breaches and theft. Properly managing cash is crucial to minimize risks and financial losses.
Cash Handling Policies, Compliance, and Record-Keeping
Compliance should always be your foremost priority: Ensure adherence to local and federal laws when handling cash. Implement standardized procedures and train employees to follow all regulatory guidelines regarding cash handling, reporting, and record-keeping. Failure to comply can lead to severe penalties and even the loss of your dispensary license. Here are some essential compliance measures to consider:
- Regularly review and update your dispensary's cash handling policies to align with the latest regulations.
- Educate your staff about compliance requirements and provide training on how to handle cash properly.
- Maintain accurate records of all cash transactions, including sales, deposits, and expenses, to ensure transparency and accountability.
Adequate Cash Management Software and Integrations
Choose cash management tools that are easy to learn and use for dispensary staff. The right cannabis cash management software can significantly improve efficiency and accuracy in handling transactions. Consider the following factors when choosing cash management tools:
- Look for intuitive software with a user-friendly interface that minimizes the learning curve for your staff.
- Ensure that your chosen software integrates seamlessly with your dispensary's point-of-sale (POS) system and accounting software for streamlined cash tracking and reconciliation.
- Prioritize software with robust security features to protect sensitive financial data from unauthorized access.
- Choose a software provider that offers support in setting up cash management systems, such as cash registers and safes, to ensure consistency and security.
- With Cova POS’s cash-out feature, you can promptly investigate discrepancies, identify potential issues, and resolve them before they escalate into significant financial losses.
Dispensary Cash Management Procedures and Best Practices
Establish proper procedures and guidelines for your staff to follow. Having cash management practices documented in your dispensary SOPs will prove to be beneficial in the long run.
Opening and Closing Procedures
Always begin the day with accurate cash counts. Count the cash in the safe and set up individual tills or cash drawers for each register. Properly managing cash at the beginning of each day sets the tone for secure cash handling throughout the day. Follow these steps for effective opening procedures:
- Ensure that all cash registers are empty and reset at the start of each business day.
- Conduct a thorough count of the cash in the dispensary's safe to verify the initial cash balance.
- Distribute cash to individual tills or cash drawers based on anticipated transaction volumes.
Periodically Conduct Drawer Audits
Regularly audit cash drawers throughout the day to ensure accurate transactions and detect discrepancies early. Periodic drawer audits help identify errors or potential theft early in the day, allowing for prompt resolution. Consider the following tips for conducting drawer audits:
- Set a schedule for random drawer audits throughout the day, and vary the timing to prevent predictability.
- Train your staff on the proper procedure for conducting drawer audits and reporting any discrepancies.
- Use dispensary POS system reports to cross-reference the cash transactions recorded in the system with the physical cash in each drawer.
Cash Drop and Safe Usage
Securely store excess cash throughout the day by using cash drop boxes and safes, reducing the risk of holding large amounts of cash in the registers.
- Cash drop boxes allow staff to store excess cash from cash drawers in a secure location within the dispensary. This minimizes the amount of cash readily available at the registers, reducing the risk of theft or loss in case of a robbery.
- Ensure that cash is stored securely in high-quality safes with TL-30 ratings, avoiding non-appropriate gun safes that may not provide adequate protection.
- Investing in high-quality safes with the appropriate security ratings ensures that your cash and other valuable items are protected from theft or unauthorized access.
Employ Security Cameras And Software
Monitor cash drop activity and prevent unauthorized access by installing security cameras and using advanced software solutions at your dispensary.
- Security cameras provide a visual record of cash drop activities and can act as a deterrent to potential wrongdoers.
- Using advanced software solutions allows for real-time monitoring of cash handling activities and helps identify any unusual patterns or discrepancies.
Handling Dispensary Cash Payments
Educate staff on recognizing counterfeit bills using pens, UV lights, and verification machines. Counterfeit money can pose significant financial losses to your dispensary. Training your dispensary staff to identify common signs of counterfeit bills can help mitigate this risk:
- Conduct regular training sessions to familiarize employees with the latest security features on currency bills.
- Use counterfeit detection pens or UV lights to quickly verify the authenticity of cash payments.
- Invest in counterfeit money detection machines for added security and accuracy.
- Implement a strict policy to refuse transactions with counterfeit or suspicious payment methods.
Verify Customer Ids and Prevent Fraud
Check the authenticity of customer IDs by examining holograms, treads, and other security elements. Ensuring the validity of customer IDs is crucial, especially considering the age restrictions on cannabis purchases. Implement the following practices for reliable ID verification:
- Train staff on how to identify fake or altered IDs and become familiar with security features present on valid IDs.
- Install ID verification scanners to automate the process and create accurate customer profiles for future reference.
- Refuse any transaction if a customer fails to provide a valid and authentic ID.
- ID verification reduces the risk of fraud and protects your dispensary from legal consequences.
Empower your staff to refuse any transaction that raises suspicions about the authenticity of the customer or payment method. Having a clear policy on refusing suspicious transactions demonstrates your dispensary's commitment to security and compliance. COVA's ID verification feature provides an efficient and reliable method for verifying customer IDs, ensuring that only eligible customers purchase cannabis products. By verifying the authenticity of customer IDs, you minimize the risk of fraudulent transactions, protecting your dispensary from potential financial and legal repercussions.
Embrace Cannabis Cashless Payment Solutions
With the increasing popularity of cashless transactions, adopting cashless payment solutions can offer several advantages for your dispensary:
- Enhanced security: Cashless payments significantly reduce the risk of theft and robbery since no physical cash is involved.
- Convenience for customers: Offering multiple payment options, including PIN debit, enhances the customer experience and encourages repeat business.
- Streamlined transactions: Cashless payments can speed up the checkout process, reducing wait times and improving customer satisfaction.
- Accurate financial tracking: Cashless transactions leave a clear digital trail, simplifying financial record-keeping and reporting.
Effective cash management is essential for the safe and efficient operation of cannabis dispensaries. By assessing potential risks, implementing best practices, and utilizing ID verification and cash tracking software, you can protect your business from theft, counterfeit money, and compliance issues. Additionally, embracing cannabis cashless payment solutions can further enhance security and streamline transactions. Following these comprehensive guidelines will help ensure the continuity and success of your cannabis retail business while providing your customers with a secure and reliable shopping experience. To learn more, click below to watch our on-demand webinar on mastering cash management.