Recreational Cannabis – K.L. Security Blog

Cannabis Facility Security Requirements for Vermont

By: Colene King

It looks like 2022 is the year Vermont may finally see the first legal sale of adult use marijuana. In 2018, the state legalized the use of marijuana for adults, but it wasn’t until 2020 that they decided to legalize the sale of it.

The windows to apply for operator licenses are opening up over the next several months: starting with small cultivation licenses on April 1^st and ending with retail licenses opening September 1st. Existing medical marijuana dispensaries will be allowed to commence adult-use sales beginning May 1, while other retailers must wait until October. (Staff, 2022)

See chart for application opening dates for each type of operator:

All license types may apply for pre-qualification beginning on March 16^th. This pre-qualification is not required for full licensure. The Cannabis Control Board is offering pre-qualification in an effort to streamline the process and to foreshadow market structure.

Contrary to other states, Vermont is placing a larger priority on small cannabis growers. Their hopes are to pull the underground operators out of the woodwork and integrate these illegal growers into the legal cannabis market. There are concerns that these smaller operations may not be able produce enough product to meet demands at the launch of legal sales, but the Cannabis Control Board is optimistic.

The Cannabis Control Board, which consists of three members, was appointed in March of 2021 with the purpose of developing regulations for Vermont’s cannabis market. The regulations regarding security measures required for each type of cannabis operation are outlined below.

Security Regulations for Outdoor and Mixed Cultivators:

Fencing
- Sufficient to prevent unauthorized entry
Alarm system
Video and photographic surveillance
- Footage must be retained for a minimum of 30 days
- Accurate date and time stamps on images, without obstructing images
- Able to produce usable images in the existing lighting conditions
- Allows for clear and certain identification of all persons or activities
- Resolution of 1080p or great
- Exportable and transferable to standard computing equipment
Motion activated flood light
Security services
- Must be operating for no less than the three-week period preceding harvest

Security Regulations for Indoor and Mixed Cultivators, Manufacturers, and Wholesalers:

All perimeter doors and windows must be locked
- Only individuals with Cannabis Establishment ID card may have keys or a key equivalent
- All perimeter doors and windows must have operational security alarms
Video surveillance with continue monitoring of any space containing cannabis
- Footage must be retained for a minimum of 30 days
- Accurate date and time stamps on images, without obstructing images
- Able to produce usable images in the existing lighting conditions
- Allows for clear and certain identification of all persons or activities
- Resolution of 1080p or great
- Exportable and transferable to standard computing equipment

Security Regulations for Retailers

Retailers must meet all requirements listed above for indoor and mixed cultivators, manufacturers, and wholesalers, along with the following additional requirements:

Alarm system
- Standard commercial-grade alarm system
- Installed by an expert alarm system company
Video surveillance
- Must include point-of-sales areas, entrances, exits, and any area containing cannabis
- Video footage must be retained for at least 90 days
Strict access controls to areas where Cannabis and Cannabis Product is stored or handled
Employees must wear identification badges while on duty
Information related to the facility security must be maintained onsite and readily accessible and make them available for inspection by the Board, if requested.

Though these regulations don’t specifically require anything for the storage of marijuana, we strongly encourage you to invest in a vault to protect your product as well as your cash. With sales being mostly cash based and a product that is of high value, cannabis operators become a huge target for robberies.

ArmorStor™ Modular Vaults & Doors

For new construction & retrofit of existing buildings. Our modular vaults offer the highest UL Security rating available at a fraction of the cost of poured concrete vaults

Another option to consider would be a cash management system. Whether you are concerned about cash shrinkage, inefficient cash handling or upgrading your cash-management plans, a commercial or retail cash management solution is best for you. Our smart safes offer bill validating, cash currency counting, cash management and cash recycling.

Smart Cash Management

Enabling retailers to gain efficiencies, reduce loss, and optimize in-store labor. All with the ability to integrate existing POS systems and video surveillance for end-to-end security.

Vermont’s Cannabis Control Board estimates that spending on recreational marijuana in Vermont could reach $225 million annually by 2025, which would translate to nearly $46 million in new state taxes. (Goldstein, 2021) If the Green Mountain State produces marijuana half as good as their maple syrup, Vermonters are in for a real treat.

Now is the opportune time to get your security plan together. Let us help you. KL Security focuses on facility security – vaults, cages, camera systems, cash management safes, high security safes, etc.

Sources:

https://mjbizdaily.com/small-marijuana-cultivators-could-cause-supply-issues-in-vermont-adult-use-market/#:~:text=Vermont%20estimates%20the%20state’s%20new,in%20annual%20sales%20by%202024.&text=Recreational%20sales%20are%20expected%20to,online%20on%20or%20before%20October.

https://mjbizdaily.com/more-than-two-dozen-vermont-towns-to-allow-adult-use-marijuana-stores/

https://ccb.vermont.gov/sites/ccb/files/2021-11/Proposed%20Rule%202%20-%20Regulation%20of%20Cannabis%20Establishments.pdf

https://www.sevendaysvt.com/OffMessage/archives/2021/10/19/vermont-gears-up-for-a-225-million-marijuana-market

Cannabis Facility Security Requirements for New Jersey

By: Colene King

On February 22, 2021, New Jersey became the 14^th state in the nation to legalize the recreational use of marijuana. After almost a full year, they have started accepting applications for cultivators, manufacturers, and testing labs. Within the first 4 hours of the website opening, nearly 500 individuals had applied. Applications for dispensaries won’t open up until March 15^th. (Davis, 2021) Though there is still a little way to go before the first legal adult use sale, New Jersey is headed in the right direction. Cultivators, manufacturers, and testing labs will start them off with building a supply for the retailers to sell.

When trying to obtain approval for licensure, a quality physical security plan will include specific details about all things required in the state of New Jersey. Some of these requirements will include: modular cannabis vaults, high security safes with TL15 or TL30 ratings, DEA approved cages for processing facilities, security camera systems, and cash management safes (trust us, you don’t want to hand count all of that cash).

Full suite of solutions from cameras to turnkey packages that can protect people, assets and speed loss prevention.

Protect product in-transit
IP Cameras Recorders
Remote Viewing on Smartphones
Access Control & License Plate Recognition

Four wall DEA secure drug cage for Schedule III, IV & V storage areas. Designed & built to DEA physical security requirements, these cages can be configured for your facility and customized to a variety of sizes and heights. Locking doors, self-closers, and access control locks tailored to your existing security systems are all possible.

The New Jersey Cannabis Regulatory Commission establishes and enforces the rules and regulations governing the licensing, cultivation, testing, selling, and purchasing of cannabis in the state.

Here is a summary of the security requirements for an adult use cannabis operation:

Each cannabis business shall provide effective controls and procedures to guard against unauthorized access to the premises or the business’s electronic systems, theft, and diversion of cannabis. Such controls may include, but are not limited to, systems to protect against electronic records tampering

Security Alarm System

Install and maintain in good working order to provide suitable protection against theft and diversion.
- Immediate automatic or electronic notification system
  - Notifies cannabis business personnel or police of an unauthorized breach or failure of alarm system
- Backup system that activates immediately when there is a loss of power.
  - Notifies personnel and authorities of power loss
- Implement security measures that deter and prevent unauthorized access to areas containing cannabis.
- Implement security measures that protect premises, consumers, and personnel
- Establish a protocol for testing and maintenance of the security alarm system.
  - Conduct inspections and tests of the system at minimum every 30 days
  - Promptly implement all necessary repairs to ensure proper operation
- In the event of a system failure due to power loss expected to last longer than 8 hours:
  - Notify the Commission
  - Provide alternate security measures or close operation until fully restored
- Outside access to premises kept at a minimum and it is well controlled
- Limit entry into areas where cannabis is held to authorized personnel
- Equip interior and exterior premises with panic buttons

Video Surveillance System

Equip interior and exterior premises with electronic monitoring, and video cameras
- A video surveillance system shall be installed and operated to clearly monitor all critical control activities of the cannabis business and shall be in working order and operating at all times.
  - The Commission must be provided access to remote viewing at all times
  - The system must be approved by the Commission prior to license issuance
- Original tapes and digital pictures must be retained for at least 30 days
- Outside area of the premises must be well-lit
  - Exterior lighting must be sufficient enough to deter criminal activity
  - Exterior lighting must be sufficient enough to facilitate surveillance
  - Reasonable effort made to not disturb surrounding businesses or neighbors
- All entrances and exits well-lit to allow proper video surveillance
  - Include motion control sensors to protect cultivation light-dark cycles as needed
Provide law enforcement and neighbors within 100 feet of the cannabis business with the name and phone number of a staff member to notify during and after operating hours to whom they can report problems with the establishment.
The security alarm system and video surveillance system shall be continuously monitored, 24 hours a day, seven days a week.
- May be monitored off-site

Storage

All cannabis items shall be stored in an enclosed indoor, locked area. Access to such area is limited to an owner, principal, employee, or volunteer of a license holder or staff members of a license holder’s management services contractor that possesses a Cannabis Business Identification Card when acting in their official capacity.

Secure Transport

A cannabis business shall ensure each delivery vehicle is equipped with:
- A secure lockbox or secure cargo area, used for the sanitary and secure transport of cannabis
- A GPS device for identifying the geographic location of the delivery vehicle
- Functioning heating and air conditioning systems appropriate for maintain correct temperatures for storage of cannabis and cannabis products
- Insure all vehicles in the amount of at least $1,000,000 per occurrence or accident
- Vehicle has no markings indicating that the vehicle is used to transport cannabis
- Vehicle’s make, model, color, vehicle identification number, license plate number, and vehicle registration available to the Commission upon request
- Staff each delivery vehicle with at least one cannabis business staff member
  - Shall not leave cannabis items in an unattended delivery vehicle unless the vehicle is locked and equipped with an active vehicle alarm system.
  - Staff member has access to a secure form of communication with the cannabis business
  - Staff member possess their Cannabis Business Identification Card at all times
  - Before transport, staff member shall create a physical or electronic copy of the transport request
  - Only Cannabis Business Identification Card holders shall be allowed in a delivery vehicle
- All transport of cannabis must be conducted by a person. No drones
- Transports must be completed in a timely and efficient manor
- Maintain a written or electronic record of each transport of cannabis. Must include:
  - Date and time of transport beginning and ending
  - Name, cannabis business ID card number, and signature of staff transporting
  - Weight of cannabis and cannabis items being transported
  - The batch number of the usable cannabis or the lot number of the cannabis product, the name of the strain/cultivar, and the form of the cannabis product
  - Signature of receiving staff member attesting to receipt of the goods
- Report any vehicle accidents, diversions, losses, or other reportable events that occur during transport to the Commission

For the full list of rules and regulations; please follow this link: https://www.nj.gov/cannabis/documents/rules/NJAC%201730%20Personal%20Use%20Cannabis.pdf

Though New Jersey’s regulations don’t specify that a vault is required for storage. We believe it is something that any cannabis operation should strongly consider. Because there is such a huge risk storing a high valued product as well as large sums of cash on the premises, these operations can often become targets for smash-and-grabs. Businesses are able to successfully protect product and cash due to the installation of vaults & vault doors.

Class 5-V vault doors protect contents against unauthorized entry, covert entry, and forced entry.

The adult use marijuana market in New Jersey is projected to reach $1.6 billion by 2025, the second largest market on the east coast, following New York. (Dehnam, 2022) Originally the state had set a deadline of February 22^nd to begin sales, but it doesn’t look like this will happen. They may be a little behind schedule, but things are definitely moving in the right direction.

Sources:

https://www.nj.gov/cannabis/documents/rules/NJAC%201730%20Personal%20Use%20Cannabis.pdf

https://www.nj.gov/cannabis/businesses/personal-use/

https://mgretailer.com/business/finance-acquisitions/cannabis-revenue-forecast-for-2025-jumps-by-20-billion/

ArmorStor & KL Security at 2022 New York CannaCon

By: Colene King | October 26, 2021

It’s official; flights are booked and the hotel is reserved! ArmorStor & KL security are headed to the Javits Center in New York City from January 7^th-8^th.

At the start of the 2022 New Year, a few of our cannabis facility experts from KL Security will be headed Northeast to attend the New York CannaCon. CannaCon is one of the largest, oldest, and most successful cannabis trade shows nationwide: an exciting event for exhibitors to come and show off the latest technologies available to the cannabis market. Various industry leaders, providing everything a cannabis entrepreneur might need from seed to sale, will be joined together. CannaCon is a one stop shop: lighting, web design, payroll processing, extraction equipment, financing options and our specialty, physical security items such as our ArmorStor line of vaults and vault doors, cages, camera systems, safes and cash management solutions. Cannacon also features educational seminars covering a wide variety of cannabis related topics.

On March 31^st of this year, New York became the 15^th state to legalize the recreational use of marijuana, allowing adults over the age of 21 to legally buy and consume marijuana. The recent legalization within New York and the Cannacon trade show allows new potential licensees to begin planning operations and meet with potential suppliers, advisors, and service providers. The state of New York is expecting the first recreational dispensary to open legally towards the end of 2022. Regulations have to be set, licenses need to be obtained, and the first legal seeds need to be sown.

Once recreational sales begin, it is projected New York will bring in $1.2 billion in sales by 2023 and $4.2 billion by 2027. According to the governor’s administration, New York State is hoping to be able to collect $350 million in tax revenue annually. (Yakowicz, 2021) Not only will the legalization of marijuana bring in revenue for the state, but it will also create thousands of new job opportunities for New Yorkers.

KL Security is eager to attend this event at such a pivotal time for the state, allowing us to showcase the best end-to-end security solutions for compliance, profit protection, and business operation optimization.

Vice President of Sales for KL Security, Travis Easter, had this to say on the upcoming trade show:

“Our team is very excited to attend the NY CannaCon event in January. Over the past few years, we have met a lot of great entrepreneurs, as well as many industry partners, at CannaCon events throughout the country that we’ve helped implement a holistic security plan, programming and physical security solutions that help drive their compliance and bottom line forward. We will be available at Booth # 445 to answer any questions you might have about securing your facility, with experts that can help guide you through the process of realizing your dream.
We will be prepared to discuss your needs one-on-one, providing real time price quotes so you can start budgeting for the future.
Manufacturers and industry partners, many of which we have met numerous times, are also invited to stop by our booth to discuss potential partnerships and opportunities.”

We look forward to helping new licensees become successful within New York’s recreational cannabis market. See you there!

Sources:

https://norml.org/news/2021/08/12/analysis-legal-cannabis-sales-projected-to-reach-43-billion-by-2025/

https://www.forbes.com/sites/willyakowicz/2021/03/31/new-york-state-legalizes-adult-use-cannabis/?sh=71a4510d395c

https://www.ganjapreneur.com/angela-grelle-the-future-of-cannabis-trade-shows/

Arizona One Step Closer to Recreational Marijuana Market

By Shelley Swearingen | August 11, 2020

Earlier this year, Arizonans banned together in an attempt legalize marijuana. Marijuana is currently legal for medicinal use in the state, but residents would like to see access made available for all adults.

The issue was set to be voted on within the November ballot. A petition was submitted earlier this year by constituents; the initiative required 237,645 signatures and Smart and Safe Arizona (the group spearheading the initiative) acquired 420,000.

Opposition to this proposal was met by Arizonans for Health and Public Safety, a group backed by the Center for Arizona Policy (conservative group that supports ‘right-wing’ legislation). It’s safe to assume this group is also anti-cannabis legislation of any kind, but attacked the proposal on the basis that it doesn’t adequately address cannabis sales tax increases, driving under the influence, or marijuana potency. It also claimed the initiative is ‘confusing and deceptive’. Based on these theories, the group filed a lawsuit challenging the pro-cannabis initiative.

And late last week, this suit was rejected. A Superior Court Judge ruled the provisions had be addressed sufficiently and found the initiative was not lacking. The judge found their claims to be unfounded. This was a huge win to the voters of Arizona. For now, the issue of legalizing marijuana for all adult Arizonans will be resolved in November by voters.

The recreational market is proposed to favor existing medical marijuana operators and also designate 26 new licenses specifically for social equity applicants.

Using data from the US Census Bureau and assuming the Arizona market would resemble the Illinois market, we can figure that Arizona might have had $170,322,000 in sales (so far) in 2020. That would have brought in over $27,000,000 in tax dollars for the state.*

Here at KL Security, we observe and implement a holistic approach to cannabis facility compliance and safety. We assist dispensaries, pharmacies, secure transporters, craft growers, large scale growers, and testing facilities in achieving revenue goals through protecting assets. We assist with security planning and SOPs for security protocols that prevent diversion of cash and cannabis products at all steps within a marijuana business’s lifetime: from licensing to successful operation to inspections. If you need assistance with the security portion of an application, want to learn how to make your operation safer, or are concerned about compliance – contact the consultants at KL Security at 866-867-0306 or at [email protected].

Information has been gathered from sources deemed reliable but not guaranteed and is subject to change without notice.

*9,900,000 estimated adults in Illinois and $300,000,000 in sales (YTD Jan-Aug 2020) equated to roughly $30.3 spent per adult resident.5,677,400 estimated adults in Arizona = $170,322,000

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