Jay Caplan (Courtesy photo)
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Most cannabis retailers have probably not spent much time thinking about pennies.
That makes sense, until you are standing at the register and do not have one.
On President Donald Trump’s orders, the U.S. Mint ceased production of one-cent coins. Banks in many parts of the country are quietly limiting or eliminating penny distribution.
Retailers are starting to notice the change. Cash-heavy businesses feel it first, and cannabis still handles more cash than most sectors.
For dispensaries, this shows up in small but constant ways at the register.
How the penny shortage affects cannabis retail pricing
Even with the growth of debit-based and cashless tools, cash remains a meaningful share of cannabis transactions.
In many markets, operators estimate that roughly a third of purchases are still paid in cash, sometimes more depending on the store and customer base. When exact change is harder to make, that issue repeats itself all day long.
A single transaction is easy to shrug off. Hundreds per day are not.
Without pennies, retailers have to round to the nearest nickel, as the U.S. Treasury recommends. That decision has a real financial effect. If you round up, the customer pays a little more. If you round down, the store absorbs it.
There is no neutral option.
Over the course of a year, those nickels add up. Across a year, consistent rounding can mean thousands of dollars at one location.
For multi-store operators working with tight margins, that is not trivial. For some stores, especially in competitive markets with high operating costs, it is one more pressure point in a business that already has plenty.
Cannabis retailers risk being nickeled and nickeled to death
Operators are already noticing. Take this theoretical example: a single-store operation processes roughly 400 cash transactions a day. Inconsistent rounding can create a daily variance in the $15 to $25 range.
That will be small enough to brush off at first, but after a few months, it’ll start to show up in monthly reconciliation and raise questions around tax reporting.
What raises more concern is that many retailers have not formally decided how rounding should work. On the ground, it often falls to staff. One cashier rounds up. Another rounds down. Someone else tries to even things out based on feel. The outcome is inconsistency, not only in the drawer but in the customer experience and in the books.
At that point, a coin issue stops being about coins and starts being about systems.
The point-of-sale penny pickle – regulators may notice
Most POS systems assume exact change is available. When that stops being true, small mismatches appear.
Sales totals and cash on hand stop lining up perfectly. Drawer variances become more common. Sales tax calculations can be off by small amounts that show up later. Reconciliation takes more time than it should.
None of this sets off alarms immediately. Over time, though, it creates noise in reporting.
In cannabis, noise tends to attract attention, whether from auditors, regulators, or financial partners.
There is also a policy question many operators have not sorted out. If rounding is happening, it should be defined and documented. Otherwise it is unclear who is absorbing the difference and how it is recorded.
Most POS agreements did not anticipate a world where pennies are scarce, and many operators have not revisited those terms.
Rounding out of control unless operators set terms
The bigger risk is not the disappearance of the penny itself. It is the possibility that rounding becomes an informal habit that bounces between staff judgment, POS settings and accounting clean-up.
This tends to hit smaller or newer markets harder. Large metros sometimes have more flexible banking relationships, more payment alternatives and larger back-office teams.
Newer markets often rely more heavily on cash and lean staffing. POS setups may be more basic. In those settings, even small inconsistencies stand out.
A dispensary that handles cash loosely can draw complaints or unwanted attention. In a young industry, those stories travel quickly and can reinforce existing skepticism.
Some operators are taking a straightforward approach. They pick a rounding method, set it up in their POS, train staff clearly, and keep an eye on the numbers. If a customer asks, the explanation is simple and consistent.
Others are still treating it as a minor annoyance. In those stores, the same purchase can be handled differently depending on the cashier or the day. Over time, those small differences stack up in ways that are harder to untangle later.
There is also a communications reality here. Customers notice patterns. Regulators notice discrepancies. When questions come up, not having a clear answer rarely helps.
Don’t let a penny problem become a major issue
The penny shortage on its own is not a crisis. It is, however, a reminder of how many moving parts cannabis retailers juggle at once. Cash handling, compliance, and margin management already require discipline. A small shift in something as basic as coin supply can ripple further than expected.
For retailers, this comes down to being deliberate. Decide how rounding works. Set it up in your systems. Make sure staff are on the same page. None of that is complicated, but ignoring it can create avoidable friction.
For some operators, especially those already operating close to the line, a few percentage points here and there matter. Stores do not close because of pennies. They close because of a pile of small issues that never got cleaned up.
This is one of them.
Jay Caplan is a cofounder of Tuross Group, where he works with cannabis retailers nationwide on financial operations, controls and reporting. Jordan Isenstadt is senior vice president at Marino, advising cannabis and consumer brands on strategic communications, operational readiness and risk management.
