Disclaimer: This content is provided for informational purposes only and is not intended as legal advice. You are responsible for your own compliance with laws and regulations.

While cashless payments such as PIN debit and ACH are finally gaining traction in the cannabis sector, it's no secret that many of today's consumers still opt to pay with cash.

Adding convenience to the payment process is critical for any retailer—but in the cannabis industry, comes with its own set of unique problems. Cash handling and management is a tedious process that opens the door for theft and can lead to major inventory and reporting problems.

If you manage a cannabis dispensary, consider the following questions:

• How much time are your FoH retail employees spending handling cash?
• Are you experiencing cash discrepancies that are harming your business?

If your answer is 'yes' to either of the above, it might be time to create and implement a cash handling policy using the right checkout equipment and software to make everyone's job easier.

Let's get into it.

Obstacles to proper cash handling

Obstacles to proper cash handling

Before knowing how to build an effective cash handling system, it’s worth knowing what can potentially lead to cash handling issues. Avoiding these problems will play a significant role in your retail cash management.

There are three common problems in the overall retail industry that lead to cash handling issues:

1. Failure to do due diligence

One of the most important reasons to implement cash handling procedures is to foster due diligence. Effective cash management allows you to know where your money is, who has access to it, and how it will be used. Without concrete answers to these questions, you’ll be hard-pressed to manage your accounting effectively. You could also easily run into fraud, theft, errors, and cash flow problems.

2. No digital or paper trail

The lack of a paper or digital trail is a recurring problem in cash handling. Keeping a clear trail of your cash handling process protects you while making it easier to identify and correct errors when they occur. It lets you know where your money is and who has access to it.

Outdated manual processes are often plagued by human error. That’s why it’s advisable to use automated cash management technology that can significantly reduce errors and help you identify and correct them quickly and easily.

3. Safety defects

Solving physical security flaws is not just about investing in smart safes or cash recyclers. You also need to strengthen security in the cash handling process right at checkout. Receipt cancellation, for example, is a major issue in retail. Some cashiers have been known to steal by erasing the transaction from the register when someone pays in cash. This means that the business has no record of the transaction, and the cashier keeps the money in their pocket.

An iron-clad cannabis point-of-sale (POS) system like Dutchie POS won't allow budtenders to perform this action without specific authorization—which reduces employee theft.

Key elements of effective cash handling

Key elements of effective cash handling

According to Business and Financial Services (BFS), there are five key areas for cash handling management:

• Stewardship: Retail managers, cashiers, and any other employees are the stewards of the business and must fulfill their duties on both good and bad days.
• Accountability: Anyone who handles cash is responsible for following procedures, upholding security, and acting with discretion. All transfers of money and responsibility must be documented. In addition, a cashier or anyone who oversees the cash handling process must sign and verify overages/shortages and all voids/refunds.
• Physical security: It’s recommended that cash be kept out of sight wherever possible. Cash counting must be done in secure areas away from the public. Safety deposit box combinations and access codes should be impossible to guess—and unknown to anyone not directly using them.
• Segregation of duties: Different team members responsible for different cash management tasks bring transparency to procedures without jeopardizing security.
• Reconciliation: Confirming the amounts of cash counted and transferred and documenting this process will quickly highlight any mismatches and reduce the window of opportunity in which cash may have gone missing.

Planning your cash handling procedures based on these five strong principles will ensure maximum efficiency and security when handling physical cash.

How to streamline the cash handling process at your dispensary

How to streamline the cash handling process at your dispensary

In an industry like cannabis where margins between profit and loss can be razor thin, you can’t afford to lose money or have a poor cash management process. Below are some practices that can help you streamline cash management to reduce costs and improve efficiency.

1. Implement a standard operational procedure (SOP) for cash handling

Every business must be able to standardize its cash management process. The task should involve FoH staff (like budtenders) working with upper management. The process should take into account how budtenders accept cash payments at checkout and when the money needs to be deposited in a safe or taken to the bank.

Here are some basic rules to follow when standardizing the cash handling process at your dispensary:

• Only authorized employees can handle the dispensary's money.
• Only the minimum amount of cash should be kept in the cash drawer. Excess cash should be regularly deposited in a safe.
• Two authorized employees should be present when cash is being transported.
• Two authorized employees must be present when cash is being counted.
• The employee handling the cash at the register must not be involved in depositing the cash in the safe.
• The person handling the cash at the safe must not be involved in introducing the cash into the cash register.
• The person holding the combination in the safe must not be involved in handling the cash in the safe.
• Cash drawers must be secured with a lock and key when not in use.
• Two authorized employees must always be present when cash is withdrawn or returned to a safe.
• There should be an activity sheet that documents the names of persons withdrawing and returning money from the safe and cash drawer, with dates and times.
• When money is withdrawn or returned to the safe, it must be counted by two people. Both persons must sign the cash activity sheet and acknowledge that the amount recorded is correct.
• A breakdown of the cash (i.e. the number of coins and bills) must be recorded.
• When the cash is handed to the next person on the team, the person accepting the cash must count the cash and accept by signing the cash sheet.
• The cash sheet should be kept with the cash and not taken anywhere else.
• All cash deposits must be recorded.

2. Train your employees on the cash handling process

Successful management of the cash handling process involves training your employees. Your employees will always be an integral part of the cash handling process, so you need to train them to minimize errors and eliminate bad cash handling practices.

In a similar vein, it’s just as important to retrain older employees as it is to train new ones for the first time. This allows your management team to be aware of any bad cash handling habits, such as depositing small bills that could be used to make change.