No federal database tracks U.S. dispensaries fined for IT security issues. But state data and industry reports show a clear trend. IT violations often fall under broader categories. These include "Security," "Recordkeeping," or "Operations."
The data tells an important story. Many dispensaries face penalties for IT security and cannabis compliance issues. Regulatory scrutiny in this area is growing.
To View State by State IT Security Compliances Click Here
Data on Violations and Fines
Cannabiz Media is a cannabis industry data firm. Their analysis shows state regulators issued nearly 2,500 violations to cannabis businesses in 2024. These resulted in $10.8 million in fines. Not all of these involve IT security. But the most relevant categories account for a large portion of all infractions:
- Recordkeeping: 21.4% of all violations
- Security: 9.5% of all violations
- Point of Sale: 8.3% of all violations
Together, these categories represent nearly 40% of all commercial cannabis compliance violations. IT systems play a major role in each category. This means hundreds of cannabis businesses likely faced citations or fines for IT issues in 2024.
These violations come from several key problem areas:
- Surveillance Systems: Failing to meet state requirements for camera quality, 24/7 recording, and data storage (often 90 days or more).
- Seed-to-Sale (Metrc) Reporting: Wrong or incomplete data entry. Gaps between physical inventory and the state tracking system. Missing deadlines to fix errors.
- Data Security and Privacy: Poor protection of customer data, leading to breaches.
Trends Over the Past Five Years
The data shows both violation numbers and IT compliance focus have grown over the past five years. The picture is complex.
Increased Enforcement as Markets Mature
State cannabis programs evolve over time. They move from launch to maturity. Regulatory bodies get more sophisticated. They hire more enforcement staff. Early years focus on licensing and getting businesses running. Later years shift to strict compliance checks and audits. These uncover IT and data issues. States like Michigan and California now lead in enforcement actions. They have more mature markets.
Shifting Regulatory Priorities
At first, many violations were for obvious problems. Now technology runs every part of the business. This includes cultivation monitoring and point-of-sale systems. Regulators now focus more on digital infrastructure. They want to ensure the systems that support compliance work correctly.
Market Consolidation and Contraction
The cannabis market has seen a drop in active licenses since 2022. This might mean fewer total violations in the future. But it also points to a more competitive environment. The operators who remain are often larger. They face greater scrutiny. The rate and severity of fines for IT failures will likely stay high or increase.
Heightened Awareness of Cybersecurity Threats
Major data breaches in the industry have been a wake-up call. Both businesses and regulators are now more alert. Stronger cybersecurity measures are now expected. Direct fines for data breaches are still new. But the security failures that cause breaches often violate state rules. These rules require robust security plans.
A precise count of dispensaries fined solely for IT security is not available. But the data shows it is a major and growing enforcement area. Dispensaries face increasing scrutiny. Data integrity matters. Surveillance reliability matters. Customer information security matters. These are key to staying compliant and avoiding costly penalties.
What Can Dispensaries Do?
The first step is understanding the laws and regulations. You need to know how they apply to your dispensary. This can be tricky. Regulatory and cannabis compliance rules are unique to every state. Cannabis Technology Partners has created an overview page. It helps you assess the basics of cannabis IT compliance by state (here).
Use IT Providers That Specialize in Cannabis Businesses
A standard managed IT service provider (MSP) can handle basic tasks. These include network setup and computer maintenance. But they cannot handle the complex, high-stakes world of a cannabis dispensary. Choosing a cannabis-focused MSP is not a luxury. It is about protecting your license. It ensures operational continuity. It reduces risk.
Key Factors:
1. Deep Understanding of Regulatory Compliance
A standard MSP will not know what METRC, BioTrack, or Leaf Data Systems are. They will not know your state's specific reporting needs. A cannabis-focused MSP knows these systems inside and out.
2. Expertise with Industry-Specific Software and Hardware
Dispensaries run on a unique tech stack. This includes specialized POS systems like Dutchie, Flowhub, or Cova. It also includes digital signage and ID scanners. Cannabis-focused providers know the common problems. They know integration challenges. They can fix a non-responsive POS terminal during peak hours. This minimizes revenue loss.
3. Tailored Cybersecurity and Data Privacy
Cannabis dispensaries are prime targets for cybercriminals. They hold sensitive customer data. This includes government ID details and purchase history. State privacy laws protect this data. Cannabis-focused MSPs understand the need to secure customer data. They prevent damaging breaches. They protect against ransomware that could shut down operations.
4. Solving the Surveillance Data Challenge
State rules often require dispensaries to record video from many cameras. They must do this 24/7. They must store footage for long periods (e.g., 90 days or more). This creates a huge and costly data storage challenge. Cannabis-focused providers understand these specific rules. They have already tested and designed solutions. These are cost-effective, compliant, and scalable. They ensure video storage meets retention and audit requirements.
5. Integrated Physical and Digital Security
In a dispensary, IT and physical security go hand in hand. Access control systems use keycards or biometrics. Surveillance cameras are not just for security. They are a core part of compliance.
Our Focus on the Cannabis Industry
Cannabis Technology Partners offers more than just IT services. We provide solutions tailored to the unique challenges of the cannabis sector. We have a deep understanding of the problems that make the cannabis industry unique. We have years of experience solving them.
Contact Us for a free consultation. See if Cannabis
Technology Partners can better provide the managed IT services for your
dispensary.