Has Legalized Marijuana Sparked A Crime Wave?
Marijuana dispensaries in states such as Colorado and California are being raided not just by Drug Enforcement Administration officials these days, but by thieves not only interested in the drug itself but lured by the thousands of dollars in cash that dispensaries are unable to deposit since they lack access to bank accounts.
Due to marijuana’s illegal federal status, federally insured banks are prohibited from knowingly handling any marijuana-related money, resulting in many financial institutions refusing to allow marijuana-related businesses from depositing money in a bank, using credit card services, or even transporting money from one location to another with the help of an armored vehicle.
In other words, most dispensaries across the U.S. have thousands of dollars in cash and no safe place to put the money.
Change may be coming soon, as Attorney General Eric Holder released a statement in September and again three weeks ago, saying that the Justice Department and the Treasury Department would issue guidance “very soon” to banks on how they can work with marijuana businesses.
But for many in the industry, changes to banking regulations are not happening quickly enough. And since many larger banks appear unconvinced that the federal government’s word is enough to keep them protected legally if they do decide to partner with those in the budding industry, the DOJ’s decision to tolerate banks’ partnerships with marijuana-related businesses may be a bust.
However, Taylor West, deputy director of the National Cannabis Industry Association, said that smaller banks and regional banks may be more open to working with those in the industry, even if the larger banks refuse to do so.
Until there is progress in Washington, D.C., dispensaries throughout the U.S. are dealing with what some are referring to as a crime epidemic.
In Colorado, a thief posing as a delivery man, sprayed bear mace on employees and ransacked a shop. Another broke into a dispensary with an ax and opened the safe with a circular saw, while another pointed a gun at a budtender and demanded a duffel bag be filled with more than $10,000 worth of high-quality marijuana.
“Everyone in the industry is having nightmares,” said Michael Elliott, executive director of the Marijuana Industry Group, a Colorado based lobby group.
Sensationalized crime wave?
According to an NBC News report, the Denver Police Department estimated in 2009 that about 17 percent of marijuana retail shops had been robbed or burglarized, which was slightly less than liquor stores (20 percent) and banks (34 percent), and on par with pharmacies.
A recent analysis of crime affecting Denver’s 325 marijuana companies by Marijuana Business Daily, a leading trade publication, found the current annual robbery and burglary rate of dispensaries is now around 50 percent, which is more than double what it was in 2009.
But in an interview with MintPress, Patrick McManamon, managing director of Cannassure Insurance, which focuses exclusively on the legal cannabis industry, said he isn’t seeing a ton of claims in his office and believes the media is sensationalizing a high crime rate at dispensaries.
“Think about how many dispensaries there are [across the U.S.],” McManamon said. “To say crime is up is a complete generalization.”
However, Mitch Morrissey, district attorney for Denver, sees things differently. What makes dispensaries particularly attractive to thieves, he opined, is how much money a thief can make.
“You hit a 7-Eleven, you’ll get 20 bucks,” Morrissey said. “You hit a dispensary, you’ll get $300,000 on a good day.”
But McManamon says the public should not associate a high crime rate with an increase in the number of dispensaries because “it’s not real.”
“A lot of people make money on it being illegal,” he stressed, before adding “Any opponent to the industry really tries to make it way worse off than it is.”
But as word begins to spread that crime is up at marijuana dispensaries, many legalization opponents, including Morrissey, have used the “crime wave” as an example of why marijuana should not be legalized.
“We have had 12 homicides related directly to medical marijuana,”Morrissey said this past August.
“We have had over 100 aggravated robberies and home invasions. Many of you probably didn’t read about the double-execution-style homicide that we had here in Denver, where people were laid down on the floor and executed because they were running a medical marijuana outlet.”
In response to Morrissey’s claims, marijuana legalization advocates argued dispensaries are not a haven for violent crime like Morrissey and others are painting them to be and blamed federal law for forcing the industry to largely operate on a cash-only basis.
More “Reefer Madness”
Mason Tvert, communications director for the Marijuana Policy Project, disagreed with Morrissey, and said he is “playing fast and loose with the facts” when it comes to the relationship with medical marijuana and crime in Colorado.
“Morrissey’s suggestion that the state and locally regulated medical marijuana industry is somehow at fault for crimes that occurred entirely outside of its scope is ludicrous and irresponsible,” Tvert emphasized. “I cannot imagine any other instance in which he would place blame for violent crimes on law-abiding businesses and citizens who have fallen victim to them.”
West agreed that a business forced to operate entirely in cash is going to be more vulnerable to crime and said the marijuana industry’s lack of access to banking is a huge problem one would never want for anyone in the retail industry.
“These dispensaries are not choosing to operate entirely in cash,” she noted. “If they had the ability to use banking services, they would.
“No matter how you feel about taxing and regulating legal cannabis,” West said it’s in no one’s best interest to operate a business exclusively in cash, adding that as more people become aware of the large amount of cash at these dispensaries, crime could get worse.
“If Morrissey is truly concerned about enhancing public safety, he should be testifying in support of policies that will eliminate the underground marijuana market and replace it with a system in which marijuana is regulated like alcohol,” Tvert said.
“He should not be resorting to scare tactics and reefer madness. Voters in Denver and throughout Colorado have made it clear they want to change the way our cities and state handle marijuana. It is time for Mr. Morrissey and other elected officials to follow their lead and give up on the failed policy of marijuana prohibition.”
McManamon agreed and said that for the marijuana industry, if a dispensary is robbed, people generalize the story and suddenly all dispensaries are dealing with high crime.
The reality of the situation, McManamon said, is that convenience stores and banks are robbed more often than dispensaries. He argued that if people call for the closure of marijuana dispensaries because one is robbed, then there should be calls to shut down all convenience stores and banks since they’ve been robbed.
For many legalization advocates like McManamon, the tax dollars generated by legal marijuana sales, the number of people the industry employs, and all of the relief the industry has brought to medical marijuana patients, “far outstrips the few crimes that do happen” at dispensaries.
Though crime may not be as problematic for dispensaries than the public may have been led to believe, it is still an issue that dispensary owners take seriously.
According to a report from NBC News, marijuana-related business in Denver should expect to be robbed at least once every two years. For Jack Finlaw, the chief legal counsel to Colorado’s governor, that statistic is not acceptable at all and has encouraged the federal government to do something about the problem, since the bulletproof glass, fingerprint scanners, and guards are not proving to be effective enough to protect dispensaries and those who work there.
Talking to NBC News, he said so long as marijuana remains illegal under the Controlled Substances Act, banks, security firms and most traditional businesses will be wary of aiding what amounts to a state-sanctioned federal crime.
“Congress really needs to act,” he said. “I don’t see a quick fix.”
Meanwhile, several dispensaries have hired security guards. In Colorado, two major security firms have been hired by several dispensaries to guard the stores for $5,000 to $15,000 a month — an expense that West points out that no other legal industry has.
Others have implemented expensive security systems and cameras, installed safes, hired armored car services to pick up the cash, and a lucky few have begun to work with some local banks.
But for the bulk of dispensaries, adding security has been the answer to reducing the likelihood a store is robbed of its cash and marijuana inventory, until the federal government decides to take congressional action and regulates the industry.
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