The cannabis market has been rapidly expanding over the last several years, and experts expect its rapid-fire growth to persist into the future. Economists predict that global cannabis sales will climb to $61 billion in 2026 — representing a lucrative opportunity for cannabis organizations.
Unfortunately, cybercriminals are all too familiar with the industry’s growth, and see it as an opportunity of their own. Hackers are becoming more adept at targeting cannabis organizations, but with the right protocols, dispensaries can come out on top.
The Cannabis Industry: A Prime Target for Cyberattacks
Marijuana retailers often store personal identifiable information (PII), which includes payment and personal identification data. Storing sensitive customer information places them at greater risk for security breaches.
Further, many dispensaries are ripe, small to mid-sized organizations with limited resources — which makes them more vulnerable to cyberattacks. Unsurprisingly, smaller businesses are targeted in 43% of attacks; they are often less prepared to defend themselves and may have no cybersecurity protocols in place.
Big Risks for Small Cannabis Businesses
The aftermath of a cybersecurity breach can be crippling for small cannabis organizations. Forty-one percent of small businesses that suffered a cyberattack were forced to pay at least $100,000 to recover. For burgeoning dispensaries, coming back from such a high expense might not be possible.
Moreover, a cyberattack can cause substantial reputational damage, tainting the relationship between a dispensary and its customers. Even the most loyal individuals may lose interest in doing business with an organization they can’t fully trust.
Managing Compliance & Cybersecurity Risks in the Cannabis Industry
A heightened focus on cybersecurity enables cannabis retailers to protect customer data, uphold information security, and avoid costly compliance issues. Below, we’ve outlined a few compliance facts your cannabis organization should be aware of:
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- All 50 states feature data breach notification laws and privacy standards that every consumer-facing organization must abide by. These laws enable regulators to penalize companies doing business across states if they fall short on specific privacy practices.
- Dispensaries would be wise to protect sensitive health information and, in some cases, keep health and recreational data separate to abide by federal rules.
- Many states take a strict approach to medical marijuana user data privacy. Therefore, any form of medical care is treated as protected health information, and businesses may be required to maintain robust confidentiality of medical users’ data.
- Cannabis retailers cannot legally accept card payments from big U.S. banks, as marijuana isn’t legal at the federal level. Instead, they can do business with companies that have turned to the ACH network to facilitate cannabis payments in states where cannabis is legal. Organizations are integrating ACH with e-commerce and POS providers — but compliance plays a significant role in executing this correctly.
Empowering the Highly Regulated Cannabis Industry
CBD XYZ offers unmatched compliance and security services for dispensaries striving to succeed in a highly regulated industry. We’ll assess your security environment quarterly to identify any gaps that need to be filled. Some of the cybersecurity services we offer include:
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- Continuous cybersecurity monitoring to identify risks and swiftly resolve issues
- Penetration testing to pinpoint vulnerabilities and correct them
- Disaster and recovery planning to ensure you’re prepared for even the worst case scenarios
- Business continuity services to keep business moving and reduce downtime in the event of a breach
Keeping Your Cannabis Organization Secure
For cannabis retailers, throwing caution to the wind can have its fair share of consequences. While small cannabis organizations may be reluctant to hire an internal IT specialist, outsourcing their cybersecurity services can be a cost-effective solution. Although dispensaries face towering cybersecurity and compliance risks in today’s landscape, we’re here to help you navigate them.
Here at CBD XYZ, we understand the cannabis industry as a whole and the unique challenges it faces. Our specialists will ensure that your organization’s cybersecurity is ironclad — so you can focus on thriving in the budding market.
To learn more about how CBD XYZ can ensure your organization’s cybersecurity and compliance are up to speed, book a complimentary consultation with us today!