On Tuesday, Medical Marijuana, Inc. (MMI) announced the creation of MPS International (MPSI), a security company that will serve medical and retail marijuana providers. One of the side effects of marijuana legalization has been an increase in crime, creating a greater need to protect business owners.
San Diego, Calif.-based MMI develops products made from cannabis or hemp plants. These include health and beauty products and nutritional supplements. One of MMI’s subsidiaries, Wellness Managed Services, teamed up with MPS Security to form MPSI.
In Colorado, there were 10 burglaries affecting marijuana businesses in 2009, the year medical marijuana became legal. The number of related crimes increased tenfold in 2012, a disturbing trend to any cannabis entrepreneur, and it gets worse, with the threat of crime going beyond a simple increase in burglaries.
According to a Fox News report, new laws that allow recreational marijuana use in Colorado could make legal dispensaries the target of drug cartels for robbery and extortion. A 2012 report by the Mexican Competitiveness Institute claimed that legalization in Colorado could cost illegal drug cartels in the state over $1 billion in lost sales.
Not only are the marijuana products at risk, so too is the money that the stores collect. Since banks are prohibited from letting marijuana businesses open accounts, all transactions must be done in cash. As a result, these stores have lots of money lying around, making them attractive to robbers and drug cartels unhappy about their sudden loss in profits.
Several lessons come out of the legalization of marijuana for recreational use. The first is that these businesses are not run on a shoestring. They are not legalized versions of the drug dealer on the street, who has almost no overhead or storefront to maintain and does little more than exchange product for money. In Colorado, legal stores must allow state enforcement agencies, access to live CCTV feeds and maintain a minimum 40-day history of recorded video for inspection. This is in addition to the considerable effort to maintain security mentioned earlier.
Up until recreational marijuana became legal, the legalization debate centered on the societal impacts: it would lead to a world full of stoners; the black market would be eliminated and prison overcrowding would be alleviated etc. There was never much talk about retaliation from drug cartels being put out of business. The private sector has responded by creating companies like MPSI; the government sector, especially law enforcement, is still waiting to see what the fallout will be.
The final lesson is how fast the marketplace can react to adversity. Recreational marijuana use has not quite been legal for one month in Colorado and Washington and already someone has come forth to address the security issues dispensaries face. If only everything else happened that quickly.
Edited by
Cassandra Tucker
