The Value of Data Security in the Cannabis Industry

The cannabis industry continues to see a great deal of development. However, not all of the outcomes of this for business owners are positive. As the industry gains a higher profile, businesses can become significant targets for cybercriminals.

One of the priorities for hackers is data. Companies in the cannabis industry store and interact with vast amounts of valuable information every day. It is, therefore, essential to gain a good understanding of how vital strong data security is to your business.

Why is Data Security Vital in This Industry?

Data security takes a significant amount of commitment and investment. So, why is it so important to dedicate your resources to this area of operations in your cannabis business?

Firstly, there are clear business imperatives to keeping data safe. Data breaches can have a significant negative impact on your operations. Ransomware attacks can disrupt your business’ productivity. Theft of intellectual property (IP) could see you lose your competitive edge. Not to mention that leaks of consumer data both negatively impact customers and can result in fines, particularly if yours is a medical dispensary that is subject to Health Insurance Portability and Accountability Act (HIPAA) compliance.

Reputation also plays a role here. If your business is repeatedly subject to data breaches, this sends a message to consumers that their data is not safe with you. It can also have a wider impact. The cannabis industry continues to face a great deal of scrutiny as all companies strive to demonstrate its legitimacy and maturity. Serious data security issues may shake public confidence.

What Data Should Be Protected?

There are many different types of data, coming from a range of resources, and representing different levels of value. So, what types of data should the cannabis industry be vigilant of? 

Some of the areas of focus include:

Consumer Data

This includes consumer credit card and bank details, names, addresses, and other identifying information. If you operate a medical dispensary, consumer data may also incorporate information on medical conditions, insurance, and prescriptions.

Intellectual Property Data

This includes details of the specific cultivation processes your company uses. It may also involve unique genetic compositions of plants. You might hold IP related to the patents of vaping devices or other methods of consumption, too.

Financial Data

Bank account details, loan information, and investment portfolios are all sensitive financial data. Information in respect of employees — such as payroll and benefits — is also sensitive. Even your bills and supplier invoices are aspects you should protect.

What Processes Should You Adopt?

It’s important to start by implementing solid information security protocols in your organization. These are guidelines everybody in the organization should follow when handling any kind of information.

A key aspect of good protocols is to formally classify different types of data. Be clear about what level of sensitivity each type of data presents. You can then outline what employees in your organization have access to that data and how they can utilize it.

It’s also wise to reduce the amount of data that is stored physically in your cannabis business. Paperwork can easily be left laying on surfaces where unauthorized people can have access to it.

Taking the time to adopt purely digital processes wherever possible enables you to keep tighter control over the data. Wherever it is stored, you can implement strong password and multi-factor authentication processes. If it needs to be shared, you can use encryption tools

There may, of course, be occasions when having some paperwork is necessary. In these instances, it’s vital to adopt regular shredding practices for classified documents. The federal government approves incineration, wet pulping, and shredding as the primary methods to destroy sensitive paperwork.

When adopting this, set protocols for reviewing documents to confirm their suitability for destruction. Bear in mind that cross-cut shredding and particle-cut shredding are among the recommended techniques for classified materials, as these are difficult to reconstruct.

What Tools Can Help?

Alongside putting protocols in place, there are tools that businesses in the cannabis industry can adopt to minimize potential data breaches.

Some of the tech you should consider includes:

Automated Technology

Various types of automation can reduce risks and enhance profitability by mitigating human error, boosting efficiency, and ensuring compliance with industry regulations. For instance, automated customer relationship management (CRM) software interacts with different company systems to gather and store consumer data in a single secure hub.

This both makes it more convenient to use and strengthens security controls. Cloud-computing platforms automatically backup and store data on an off-site server. This enables authorized personnel to access it wherever they are, while also reducing the potential for breaches if your physical premises are compromised. 

Artificial Intelligence

Artificial intelligence (AI) is quickly becoming a revolutionary feature of the cannabis industry. Alongside its potential to help improve cultivation and marketing, AI also has a role to play in data security. The last few years have seen the emergence of AI threat detection software.

These tools monitor company networks in real-time, using algorithms to spot patterns in behavior that are consistent with breach attempts. These platforms alert staff and can also quarantine suspicious elements before they cause disruption.


Data security can protect cannabis industry businesses from financial disruption and reputational damage, among other issues. It’s vital to ensure your company has strong information security processes, such as prioritizing digitization and performing regular shredding of sensitive paperwork. It’s also worth exploring the tech tools that can help you keep data safe, including automated systems and AI threat detection.

Nevertheless, you must remember that the data security landscape is constantly evolving. Risks change and the tools or processes that are impactful today may not be the most relevant in a year’s time. It’s important, then, to regularly review your data practices against the current hurdles faced by the cannabis industry and its consumers.

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