Armored Truck Companies Reportedly Cutting Ties With Dispensaries, Citing Pressure from DEA

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The Drug Enforcement Administration is reportedly pressuring armored truck companies to stop serving state-legal medical cannabis dispensaries, another blow to businesses that must largely operate on a cash-only basis.

Numerous dispensaries – including Harborside Health Center in Oakland, which ranks as the largest MMJ center in the country – said security companies that provide armored transportation have cut them off in recent weeks after receiving a mandate from the federal government.

The move represents the latest attempt by the Obama administration to put a choke hold on the medical marijuana industry by attacking key parts of its infrastructure. The federal government recently warned banks and credit card companies not to do business with medical cannabis companies, meaning most dispensaries and infused-products providers deal only with cash.

That creates a whole host of logistical and operational challenges. Many MMJ businesses, for instance, have large amounts of cash on hand each day and must find ways to pay their vendors and suppliers. A fair share use armored truck services to move money around safely. With that option off the table, however, dispensaries – and their employees – face greater safety risks.

A DEA spokeswoman said she couldn’t comment on whether an agency-wide directive was issued but reiterated that under federal law “any business associated with criminal activity – such as marijuana – certainly could be subject to prosecution.” A spokesman for security services provider Brink’s said he wasn’t aware of any change in company policies, while representatives from armored car provider Dunbar could not immediately be reached for comment.

But Steve DeAngelo, executive director of Harborside, said Dunbar informed the dispensary yesterday that the security company could no longer provide armored truck services to MMJ operations. The local Dunbar branch received the mandate from the company’s corporate offices, saying the move is tied to pressure from the DEA, DeAngelo said he was told. The government agency reportedly went so far as to interview Dunbar’s drivers about their clients to identify MMJ businesses with names that aren’t obviously tied to the cannabis industry.

DeAngelo said his dispensary is now scrambling to find another solution and that the move will create a host of challenges. Harborside used armored trucks to transport money twice a day, mainly to pay vendors and suppliers as well as the city and state, which take a share of its revenues.

“The federal government appears willing to do anything that will turn this inherently safe plant into something dangerous, no matter the impact on public health or safety,” DeAngelo said. “In 2011 they closed our bank accounts, which forced us to handle and store cash on site. Now they have denied us any secure way to transport that cash to those whom we owe money—like the City of Oakland and the California Board of Equalization. The reduction in security caused by this federal action endangers not only our patients and staff, it endangers the entire public — including state and city employees.”

The National Cannabis Industry Association, a trade group for marijuana businesses, said it is aware of several dispensaries in Colorado that also had their armored car services suspended, “reportedly following a visit from the DEA and pressure from the agency to discontinue services.”

Aaron Smith, NCIA’s executive director, echoed DeAngelo’s concerns over increased security risks.

“This is a major threat to public safety intentionally engineered by the administration,” Smith said in a statement. “This reckless and shameful policy not only puts the lives of dispensary operators and patients at risk, it threatens the safety of thousands of employees, contractors, and state officials who receive payments from our industry every day.”

Dispensaries now have limited options. They could have employees drive the money around on their own, taking on significant risks in the process. The best solution might be to hire state-licensed guards to escort workers transporting money, though that is still risky since they will not be inside an armored vehicle.

Several dispensaries affected by the decision wish to remain anonymous to avoid drawing attention to the fact that they can’t safely transport money. DeAngelo, though, said he feels it is important to speak openly about the issue.

“If nobody goes public, there’s not a way to push back on this,” he said. “If everyone covers their heads and ducks down, this will go unchallenged. I will not be intimidated.”

Aside from warning banks, credit card companies and security firms, the government has also threatened hundreds of MMJ landlords in California and several other states with asset seizure if they don’t boot medical cannabis tenants from their properties. Most of the landlords are located in states with loose regulations on the industry.

Photo credit: @10 via Flickr

Daily News | Dispensary/Retail Store Business News

 5 Comments

  1. Windy City August 22, 2013
  2. Nancy Mercanti August 22, 2013
  3. ali jannati August 22, 2013
  4. Jerry Chin August 22, 2013
  5. Norman Gates August 22, 2013

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