Following the death of George Floyd, looting took place across the country. Many targeting marijuana dispensaries, resulting in hundreds of thousands of dollars in losses. In most cases, rioters weren’t just looting stores. They were completely ransacking and destroying property.
A Closer Look
Berner’s Cookies, in Melrose, CA, response is parallel to the industry’s historic, positive alignment with social justice issues – particularly those caused or affected by the war on drugs. 
Berner was not worried about the financial loss, which totaled to more than one million dollars. He told Instagram he stands with the people and agrees in making statements against the injustices.
 ”We can rebuild our store,” he said, “but you cannot bring someone back to life.”
As admirable as Berner’s response was, Cookies is a large, national name. What about the small dispensaries scattered across the country who can’t afford to take such an unprecedented loss? 
How Bad was the Damage to Dispensaries? 
Marijuana dispensaries are a target for criminals due to the amount of cash and desirable product they have on hand at any given time. Traditional banking services have yet to integrate with them, forcing the dispensary to deal in cash. In Oregon and California alone, looting took place at 43 dispensaries.
Magnolia Wellness, a shop and incubator for social equity licensees in Oakland, CA, who have been disproportionality affected by cannabis prohibition. This location was robbed twice during the summer marches. They lost $100,000 worth of products, employee paychecks, computers, furniture and security equipment. Owner Debby Goldsberry told Rolling Stone, “these weren’t protesters or looters, these were armed criminals.” Â
Ron Legget, a Native American licensee of Magnolia Wellness, was set to launch his dispensary Chiefling on June 8 when the robberies cost him $20,000 worth of his investment.  
Boston’s first black-owned dispensary also lost $100,000. Kobie Evans, the owner of Pure Oasis, told the Boston Globe robbers took advantage of the peaceful protest which later turned violent, as it occurred miles away from Pure Oasis. He also claims the robbers knew the layout, as they got in through a supposedly secure back room.
According to the Inquirer, only one dispensary in Philadelphia avoided a break-in attempt, whose owner set up armed guards in front of his store.
How Can Dispensaries Recover and Improve their Security?
For Pure Oasis and Magnolia Wellness, the community stepped in to help clean up and rebuild. Manufacturers sent Goldsberry free products to help her get a jumpstart on regaining her losses. When looting hit dispensaries in Philadelphia, many business owners sought to rebuild and enhance their security with surveillance and thicker vault doors. 
Unfortunately, state regulations are notoriously burdensome to overcome as they pose stricter rules on cannabis than most industry’s face. 
States mandate all repairs adhere to the original specifications of materials used when the shop was first approved. Businesses must either build it back exactly the way they were or submit a formal modification request with a $250 fee and a 30-day approval period. 
The Insurance Issue 
Hurdling over persnickety state regulations won’t be possible for many small businesses without proper insurance; Another notorious roadblock for marijuana dispensaries. Insurance is financial security for business but getting adequate coverage has always been an issue for dispensaries.
Like with getting banking services, insurance providers are wary of working with cannabis companies because of the industry’s risks. Fortunately, the situation seems to be improving as more legalization passes. The California Department of Insurance has a policy approved, and according to Law.com, affected dispensaries may have coverage in place. 
It all depends on the facts surrounding the losses and the specific language of their policy. Essentially, affected dispensaries will want to look at their commercial property policies. Standard policies cover property damage, business interruptions for repairs, stolen property like computers, display cases, security equipment and the value of stolen inventory. The coverage may also cover the costs to increase safeguards, like added security.
There will still be challenges. Policies differ state to state, and in newly legalized states like Illinois, there are no benchmarks for insurance companies to reference. Many commercial policies don’t include the loss of cash, something any given dispensary has a lot of. Insurance companies may blame losses on the market, such as a business drop due to COVID-19, or that criminal conduct bars coverage. And finally, there’s still the argument cannabis businesses are uninsurable due to their vague legal status.
Eventually, state regulations will learn how to craft laws for the anomalies that appear from the legal gray zones of legalized cannabis. Until then, what can businesses do to protect themselves?
How Dispensaries Can Protect Themselves in the Future
For any unprecedented damage in the future, dispensary owners should notify their insurance provider immediately of property damage or business interruption and save all their bills and invoices. Seeking counsel on piecing together insurance claims or on increasing security measures will also offer protection. 
Dispensaries who do not have the proper security in place risk losing their investment. Most dispensary owners were utterly blind-sighted. Even if they had been prepared, police were busy with the demonstrations at the time. Investing security into a dispensary and being clear on insurance coverage is critical.
How can Sapphire Risk help?
Tony Gallo and the team at Sapphire Risk Advisory Group has over 30 years of security experience and expertise. Contact us for further information how to protect you, your employees and your business from looting. Follow us on Facebook or connect with us on LinkedIn to receive further security updates.
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