WA ORC Task Force - Meeting
(March 29, 2023) - Cannabis Retail Panel

WA ORC Task Force - Meeting (March 29, 2023) - Cannabis Retail Panel - Takeaways
[ Event Details ]

Several cannabis retailers conveyed experiences and policies on reducing robberies, but local officials and others pushed for more organized and proactive enforcement approaches.

Here are some observations from the Wednesday March 29th Washington State Organized Retail Crime Task Force (WA ORC Task Force) Meeting.

My top 3 takeaways:

  • Panelists presenting on cannabis retail crime were introduced after an overview of how a labor representative saw the problem from UFCW 3000 Executive Vice-President and Chief of Staff Sara Cherin.
    • Speaking in place of UFCW 3000 President Faye Guenther, Cherin described how their organization represented “over 55,000 workers statewide in mostly frontline essential categories.” As the “largest single private sector union in the state,” she noted their members were primarily “grocery store workers, in retail and healthcare facilities, and hospitals,” but her engagement in the issue came about as “we also represent hundreds of workers who work in the cannabis industry. And also, many more who are seeking to be represented in the cannabis industry” (audio - 7m).
      • Cherin planned to give "a little snapshot…of cannabis workers” before industry panelists spoke “about the very real safety issues cannabis employers face.” She further suggested WA ORC Task Force members return to the matter at a subsequent meeting for the purpose of “hearing from cannabis workers directly themselves.”
      • “Research has shown that unionized workplaces are safer, and that unionized workplaces…are safer due to the fact that typically unionized workers tend to report safety and health violations at high rate…because they feel safer” to do so, she stated.
      • Because the “violence that cannabis retail workers in particular experience is very real,” Cherin told the group “they deserve dignity and most importantly a safe work environment.” She emphasized that “this isn't just an urban problem. I think we heard that with retail grocery stores, it isn’t just happening along the I-5 corridor.” Thefts and violence were higher “all over” Washington.
      • “Hopefully either at the next meeting or another meeting in the future,” Cherin could facilitate results of a survey of cannabis employees UFCW 3000 had conducted to “give us a little bit of insight on…the workers that we’re talking to and some of the trauma that they're experiencing.” She quoted a survey participant who reported “I don't feel safe at all and I would feel much safer if the state mandated not only security guards, but also magnetic locking doors, and possibly multi-door entryways similar to security at other stores.” Cherin stated one respondent indicated they were a “'victim of robbery at a past shop I worked at. I fear retaliation if I bring this up,” and another brought up the trauma of working during an armed robbery: “no one deserves to have a gun in their face…They stole the employees’ phones and threatened to murder my good friend if the keyholders didn't do as they asked.”
      • “And we would be remiss if we didn't acknowledge that one of the main reasons why cannabis…shops are being targeted is because the banking system that exists makes them a target and needs to be changed,” argued Cherin. Forcing the industry to be restricted from credit or debit transactions had left them with significant cash on-hand and was “inequitable.”
      • Cherin said UFCW 3000 leaders wanted to work with WA OAG and “we want to partner with law enforcement and policymakers. We're committed to doing that to ensure that the most important things inside the store: workers, must be protected.”
    • Shannon Vetto, Evergreen Market CEO, relayed that she’d been present during “incidents and…overnight when we've had middle-of-the-night instances” when she’d been “left by myself when the whole front had been opened up.” She added that she’s worked in the “industry for about seven years; my background is capital, actually.” After voting against Initiative 502 in 2012, Vetto “became passionate about the legalization of this plant when I learned about all its medical values” and stopped believing in the “myths and/or villainization of this plant” (audio - 2m).
    • Ken Weaver, The Slow Burn Owner, told the group he’d been in business with his children since 2014 in Yakima, but “we've suffered armed robberies and not exactly sure how we solve that problem” (audio - 1m).
    • Paul Brice, Happy Trees Owner, shared his background growing up in Tacoma, acquiring felony convictions, and starting two medical dispensaries, T-Town Alternative Medicine and “Rainer Frontier out in Kittitas County.” T-Town had “over 14 attempted break-ins,” he said, but he had “opened up again in Kittitas in 2014, and now currently a retailer” (audio - 1m).
    • Ian Eisenberg, Uncle Ike's Co-Owner, described owning five stores—four in Seattle, and one in King County—“and we've been in business for about ten years almost.” In that time, he’d endured two armed robberies, as well as a car driving into his storefront to burglarize it. Eisenberg’s staff had been tracking cannabis industry crimes since January 2022 because “in order to understand a problem you have to have the metrics of how severe it is.” Unfortunately, he found “there's no one agency in the state that's collecting data of pot shop robberies…our data is incomplete; we have no great way of compiling it or authenticating it.” However, he speculated “somebody in the state, I would assume, would have that data and could put together some sort of a list” (audio - 1m).
  • Assistant Attorney General Benjamin Carr led task force members in raising questions for panelists on what they saw as the specific challenges in preventing organized crime in the retail cannabis sector, along with possible measures to reduce and respond to criminal activity.
    • Carr asked each panelist to weigh in on “​​the unique challenges that you face in the course of your business” (audio - 10m).
      • Vetto started off by seconding Cherin’s remarks on federal banking reforms that would incentivize better banking services while reducing the amount of cash in stores and the “logistics” of arranging pickup and transport of their funds. While this was an “important denominator that we have in this space that’s different,” she believed “there is something unique about the degree of violence.” As stores began opening in 2014, she didn’t know “why in the last 18 months has it become more violent?” Vetto wasn’t aware of “data on the amount of time the criminal spends in our shops during the day,” but she had the impression the duration of the crimes was increasing from around “minute and a half to four minutes and if you have four minutes in a shop” and that there was more emphasis on taking money since “our product has meaningfully reduced in value…industry value’s almost nothing.” She added that “we don't have a lot of opportunity other than…personal private security which is super expensive.” Moreover, Vetto called adult use cannabis a “very capital intensive business. So if you own and operate a store and it's a single store” it was “super expensive to just stay in business but let alone afford security.” She and Eisenberg were among people who owned the maximum amount of stores allowed in law who could “afford security, we can afford the magnetic locks…but it is literally taking almost all my profits and it’s $400,000 a year just for the security measures, and that’s not always sustainable for a lot of people.” Recounting some of the offenses at their businesses, Vetto felt employees could be affected by the event for “a lifetime” with lingering impacts.
      • Eisenberg noted other financial challenges, including not being able to claim 280E tax exemptions for expenses like security. With an “extremely low margin business, like a grocery store, and not being able to deduct security expenses, it just absolutely kills us and it's a reason why you don't see more armed security at stores…it sucks away any profits we have whatsoever.”
      • “The other problem we have with armed security,” Weaver stated, “which is the obvious solution to deterring crime, is when you have stores in strip malls” and “other stores object tremendously when they have armed guards around. It intimidates law abiding citizens.” He felt this meant it was neither financially practical nor logistically practical as “there's limited places that you can apply that.” Weaver was further troubled by owning multiple stores, reasoning “any self-respecting crook is going to find the weakest link. So, until we can secure all of our stores none of ‘em are really secure.”
      • Brice was “a small store owner in a town of 3,000,” but had come from Tacoma where “there was no real police aid or police help during this time” to dispensary proprietors. “Generally, what I always found is you have to have some sort of, like, pit area. No different than the casinos where someone is protected,” he argued, and “safe from anyone that might enter….and rushing” into a store. He felt set up costs were “$50,000 easy” in order make an employee not “feel like they're just in a little hamster cage to themselves” which could be prohibitively expensive “especially if you're not one of these multi-chain retailers.”
    • Next, Carr inquired about changes in the nature of retail robberies alluded to by Vetto, encouraging Brice and others to provide more details about what kind of crimes they were “struggling with and sort of when those started. Was there a point at which you noticed that they either started, or noticeably increased?” (audio - 5m)
      • Brice believed burglary risk had “always been there, especially when you have cannabis and cash associated with each other” but that during the coronavirus pandemic “everyone starts hearing…police ain't chasing no one or…maybe a lack of investigating” in conjunction with the “amount of success that…burglars are having without being caught” was a “big component why you're seeing a lot more, more rise in it.”
      • Eisenberg also attributed the increase in offenses during “the COVID era, with no cash bail, no pursuit. We used to have patrol cars that could kind of go through our parking lot once in a while; there's not staffing for that anymore.” He summed it up as a “compilation of all the things you read about in the news, but…we've been a cash business since day one” and “robberies they always kind of happened, but once every few months with all the different shops, and now…for a while there it was every night.” Weaver agreed that the problem had gotten worse following the coronavirus pandemic. Eisenberg agreed with Vetto’s estimate that the increase started “about 18 months ago. The spreadsheet pretty much shows it; it's pretty apparent,” attributing part of the trend to “the same young criminals hitting up multiple, multiple shops.” He likened the situation to a “big game of whack-a-mole” with perpetrators targeting retailers with the least security.
      • “In our case it was an organized crew in the Yakima area,” described Weaver, who said they targeted area businesses “periodically” and claimed the criminals were “really good at what they do except for shooting up the cash machines on the way out which” he called “very unprofessional as a crook.” He considered them better organized than some other region’s robbers and insisted the five person crew were “very, very difficult to catch” and persisted for “two years ago, maybe two and a half years…It's been an ongoing problem for quite some time for us.”
      • Vetto felt the Uncle Ike’s spreadsheet of reported robberies would verify that the offenses were occuring more on the western side of Washington than the eastern side, “they had a different set of issues in terms of different themes, and different time frames.”
    • Steve Strachan, Washington Association of Sheriffs and Police Chiefs (WASPC) Executive Director, wondered whether banking reforms to limit cash were “purely a federal decision that can be changed” (audio - 1m).
      • Eisenberg noted there were enough credit unions handling cannabis business banking that many retailers did have “armored car cash pickups.” National banks invoked federal interstate commerce concerns “and to take credit cards would be a federal issue.”
    • Kim Triplett-Kolerich, WA OAG Senior Fraud Investigator, was curious about other licensees’ experiences, and whether perpetrators were targeting cash or cannabis products (audio - 7m).
      • Brice answered that both were targets, advising that it was more about the location of the store itself. He explained that his store in Kittitas County had never been robbed, which he related to having “no other city within…30 miles,” making the premises less attractive to someone wanting to make a getaway. He further felt it was important for retail owners to be “very well known in the community” their store was in.
      • Weaver had found robbers were “always after products because the cash is all locked up,” and those after money entered armed “during business hours, and…it's more frequent that you have young delinquents breaking windows…trying to get a joint.” However, “the ones that are really spooky are the ones that come in during business hours after cash,” he added, feeling they got relatively little cash, and “the risk they take for the gain they receive just blows my mind.”
      • Agreeing, Eisenberg reasoned that “if you're getting three, or four, or $5,000 in a potshop. It doesn't sound like that much but it's probably the only store, or type of stores, in the state that have that kind of cash sitting in the tills that haven't gone into the drop safes yet.”
      • Vetto said one of the impacts had been from “some pretty big news stories” about fatalities and multiple robberies in a single week, “and it died off after that.” She felt media coverage had increased the perception of risk, and had potential to be “really key” if outlets covered “ramifications” following robberies, rather than centering reporting on a dramatic event or an arrest. Vetto had been seeing more “smash and grab” crimes, claiming there’d been “seven stores in…a nine day time horizon, and they seem to all be the same people.” Owners had collaborated across jurisdictions to get “all of the case numbers, we got all of the detective names,” she explained, confident the incidents represented an organized criminal effort “at some level.” Vetto knew police had investigated, but indicated there hadn’t been a dedicated follow up with businesses. She hoped task force resources might work towards both media outreach and more successful data gathering.
      • Eisenberg complained about a lack of coordination among law enforcement, describing how they had to connect an investigating Seattle Police officer with WSLCB Enforcement. He encouraged more communication, data sharing, and analysis among law enforcement agencies. Eisenberg commented that owners had found more help from each other, notifying one another in the event “one store was hit.”
    • Carr then asked what prevention measures cannabis businesses were taking, for robberies generally or specific types of thefts (audio - 2m).
      • “Buzz doors, either dual entry, or one entry but a door…where an employee inside the shop has to hit a buzzer to unlock it,” was a pricey but effective way to manage access, according to Eisenberg. He also said an “armed security guard sitting in a car outside [was], very, very effective.” He contrasted this with other rules like posted signage “saying no guns allowed inside” and an earlier restriction on armed security on the premises. Eisenberg suggested “something changed at the LCB” and armed guards were allowed, “but there's still signs saying there's no guns in there, which makes us a soft target.” He asserted, “we don't want to operate businesses that look like fortresses, but…protection and safety of our staff and customers is paramount.”
    • Carr mentioned security cameras specifically, questioning “how big an expense is that” (audio - 4m).
      • Vetto considered them cheap compared to the other security measures mentioned, and also “required by the legislation and regulation.” But this only helped in “recovery or prosecution” and offered little deterrence, she remarked. A more affordable option had been “training and drilling,” something she felt could be stressful, but “it is so effective.” It helped employees not be afraid to take action, such as activating “the magnetic locks before someone comes in.” Vetto alleged there had been a domestic dispute in which one of the parties asked to hide in the back of a store, and that her staff were trained to look for multiple ways people might look to gain access to their safes or inventory. It was difficult because “you can only measure what does happen,” she said.
    • Mary Lou Pauly, City of Issaquah Mayor, advised that some of the cannabis retail crime went “beyond the ability of local law enforcement” and needed WA OAG and more State enforcement attention. Appreciating there was only so much retailers could do, she commented, “they're not going to be able to bust up these crime rings. Somebody else has to” (audio - 3m).
      • Weaver said keeping robbers out had been their goal, “we've tried to do that by increasing our surveillance around our stores.” This included using license plate readers, though he thought “these guys that have been hitting us [were] organized enough to see that.” This had cost “a little over a quarter of million dollars to do that” for four stores, but he believed it was a worthwhile precaution.
      • Brice found security cameras were most valuable when someone was watching them in real time, otherwise "you're really blind and not knowing.” A security guard often was posted at a “front door” and wasn’t also monitoring cameras or other areas, he remarked.
    • Carr then inquired what actions would most help the licensees (audio - 2m).
      • Brice called for “being able to align…opening / closing procedures” so that as his employees closed up, a police officer might have “their vehicle pull up around front just in case.”
      • Eisenberg seconded the value of this procedure, but Weaver cautioned “that comes with the cost of the municipalities and…that's a difficult sell to make to a city council.”
    • An attendee raised the question of how limitations on police pursuits had impacted cannabis business robberies, noting that legislation modifying the statute had been advancing during the legislative session (audio - 2m).
      • Eisenberg was in “100% agreement. That's the problem. We saw the past year, or two years that the guys robbing us know that.” Brice also considered the policy to be “like a laughable joke.”
      • Carl Kleinknecht, Kemper Development Company Director of Security, called for police pursuit practices to be "recalibrated" as it was a “contributing factor” to robbers escaping prosecution. In lobbying for reforms, he argued “elected officials [were] focusing in on the safety aspects of the pursuit law…despite the unintended consequences that we’re all wrestling with” (audio - 1m).
      • Subsequent to this meeting, SB 5352 was passed by the legislature, and at time of publication awaited action by the governor.
  • Several task force members made final remarks on available tools, law enforcement response, and employee training as the panel came to a close.
    • The Public Safety and Retail Theft Resources from the Washington Retail Association were brought up as a way to “help with prevention and training options for employees.” The association’s Director of Communications, Robert B. Haase, spoke to the offerings, including (audio - 4m):
    • Pauly praised the efforts of panelists and the Washington Retail Association, but returned to the topic of “the root cause which is that we have to find organized crime…before they find your doors.” She hoped to reduce overall crime so “you do not have to have armed guards and hardened entrances” at cannabis retailers (audio - 1m). 
    • Cherin again stressed the need for worker safety training, even if it couldn’t be the “be-all, end-all” solution, such training could work in conjunction with addressing the “root causes” of the offenses (audio - 6m).
      • She further believed that training quality was also important, and felt that in-person training was superior to web-based courses. Cherin offered the example of earthquake drills in elementary schools, where students weren’t just told about emergency procedures but rehearsed them to become familiar with taking action in an earthquake.
      • Cherin wondered if having security personnel as direct employees, rather than contracted hires, could make a difference when deducting expenses. Neither Vetto nor Eisenberg found this to be the case, as employee expenses couldn’t be deducted on their taxes, and hiring people with law enforcement or security expertise was difficult, “there's some real danger in hiring people untrained, especially with guns.” Eisenberg said “there's such a demand for security, at least in Seattle, that…it's getting harder and harder to find good people, for the third party companies to find good security trained people, and…expense is just going up, and up, and up.” Brice agreed it's not a job people with credentials would work “for cheap,” and that the remote location of his Cle Elum store meant local police and the Washington State Patrol were frequently driving by. “I have probably the least secured store, but I also went from [having] the most secure store where I had all the metal windows and watching them on film,” Brice said. His store wasn’t particularly secured, but had an outsized “police presence of going up and down the street, even through the night.”
    • During the 2023 regular session, the WA OAG advocated for the creation of a 10-person Organized Retail Crime Unit within their office, a request that was incorporated into SB 5259. After that bill was not advanced by the Senate fiscal committee, a proviso was included in the operating budget in section 126(15),  which fully funded the request.

Information Set