10 Data Security Tips for Cannabis Businesses

Here’s a quick guide to protect your cannabis business from data breaches:

Use strong encryption
Set up access controls
Enable multi-factor authentication
Keep software updated
Train employees on security
Split up your network
Back up data regularly
Have an incident response plan
Manage third-party risks
Follow industry regulations

Why it matters:

Builds customer trust
Avoids fines (up to $50,000 per violation)
Prevents costly data breaches ($200,000 average cost)

Security Measure	Effectiveness	Cost	Maintenance
Encryption	High	$1K-$50K/year	Regular updates
Access Controls	High	$1K-$50K/year	User management
MFA	Very High	$1K-$50K/year	Minimal
Software Updates	High	Varies	Regular patching
Employee Training	Medium	$500-$5K/year	Ongoing sessions

Implement these measures to keep your cannabis business data safe and compliant.

1. Implement Strong Encryption

Effectiveness

Strong encryption is key for protecting sensitive data in cannabis businesses. It makes sure that if someone gets into the data, they can’t read or use it. This is very important for cannabis businesses because they handle private customer information, money data, and business secrets.

Experts say encryption is one of the best ways to stop data breaches and keep sensitive information safe. For example, Dunn says cannabis businesses should use the same cybersecurity practices as other stores, including encrypting sensitive data. This helps businesses lower the risk of security problems and protect their important information.

Implementation Cost

The cost of setting up strong encryption can change based on the specific solution and technology used. But many experts agree that encryption costs much less than dealing with a data breach. For example, a study found that a data breach in the cannabis industry usually costs around $200,000.

On the other hand, setting up encryption can cost as little as $1,000 to $5,000 per year, depending on how big the business is and what kind of encryption they use. Also, many encryption solutions can grow with the business, so companies can start small and upgrade later.

Maintenance Requirements

Keeping strong encryption working well means updating and checking it regularly. This includes updating encryption keys, watching for possible security threats, and doing regular security checks.

But many encryption solutions are easy to use and don’t need much upkeep. For example, some solutions automatically update keys and other parts, making it easy for businesses to keep their encryption up to date.

Compliance Alignment

Using strong encryption is also important for following industry rules. For example, HIPAA requires businesses to use encryption to protect sensitive patient information.

By using strong encryption, cannabis businesses can make sure they’re following the rules and avoiding fines. It also shows customers and partners that the business takes data security seriously.

Encryption Type	Yearly Cost	Upkeep Needs	Follows Rules
Basic	$1,000 – $5,000	Regular updates and checks	Meets basic rules
Advanced	$5,000 – $20,000	Auto-updates keys	Meets advanced rules (like HIPAA)
Custom	$20,000 – $50,000	Regular security checks	Meets specific state laws

2. Set Up Access Controls

How Well It Works

Setting up access controls is key for keeping data safe in cannabis businesses. It means only letting certain people see and use important information. This helps stop data theft and keeps private details private. Access controls can use things like passwords, different levels of access, and two-step logins.

Experts say access controls are very important. They help stop data breaches and keep sensitive information safe. Dunn, for example, says access controls are crucial for avoiding security issues and protecting key data.

How Much It Costs

The price of setting up access controls can change based on what kind of system you use. But many experts say it costs much less than dealing with a data breach.

A study found that a data breach in the cannabis industry can cost about $200,000. But setting up access controls can cost as little as $1,000 to $5,000 per year, depending on how big your business is and what kind of system you choose.

How to Keep It Running

To keep access controls working well, you need to update them and check them often. This means updating who can access what, looking at who’s been logging in, and checking for security problems regularly.

Many access control systems are easy to use and take care of. Some even update themselves and send alerts if there’s a problem. By using access controls, businesses can keep their important data safe and follow industry rules.

Following the Rules

Using access controls also helps businesses follow important rules, like HIPAA. By only letting certain people see sensitive information, businesses can make sure they’re doing what the law says about protecting patient data.

Type of Access Control	Yearly Cost	What You Need to Do	How It Helps Follow Rules
Simple	$1,000 – $5,000	Update and check regularly	Meets basic rules
Better	$5,000 – $20,000	Updates itself, sends alerts	Meets stricter rules (like HIPAA)
Custom	$20,000 – $50,000	Regular security checks	Meets specific state laws

3. Use Multi-Factor Authentication (MFA)

How Well It Works

MFA is very good at keeping information safe in cannabis businesses. It asks for more than one way to prove who you are, making it hard for the wrong people to get into accounts and data. Even if someone finds out a password, MFA adds another layer of protection that can stop data theft.

Experts say MFA is a must-have for protecting important information. Dunn says it’s key for avoiding security problems and keeping important data safe. By using MFA, cannabis businesses can greatly lower the chance of data breaches and protect their customers’ private information.

How Much It Costs

The price of setting up MFA can change based on what kind you use. But many experts say it costs much less than dealing with a data breach. A study found that a data breach in the cannabis industry can cost about $200,000. But setting up MFA can cost as little as $1,000 to $5,000 per year, depending on how big your business is and what kind of system you pick.

How to Keep It Running

To keep MFA working well, you need to update it and check it often. This means updating who can use it, looking at who’s been logging in, and checking for security problems. Many MFA systems are easy to use and take care of. Some even update themselves and tell you if there’s a problem.

Following the Rules

Using MFA can also help cannabis businesses follow industry rules. By using MFA, businesses can show they’re serious about protecting private information and following the rules. For example, MFA can help businesses follow HIPAA rules by making sure only the right people can see sensitive patient data.

Type of MFA	Yearly Cost	What You Need to Do	How It Helps Follow Rules
Simple	$1,000 – $5,000	Update and check often	Meets basic rules
Better	$5,000 – $20,000	Updates itself, tells you about problems	Meets stricter rules (like HIPAA)
Custom	$20,000 – $50,000	Regular security checks	Meets specific state laws

4. Regular Software Updates and Patch Management

How Well It Works

Keeping software up-to-date helps protect cannabis businesses from data breaches. By fixing security holes, businesses can stop hackers from getting into sensitive information. This is very important in the cannabis industry, where businesses often store private medical data. For example, regular updates could have stopped a breach that exposed 85,000 files with sensitive medical information.

How Much It Costs

The price of keeping software updated can change based on how big the business is and what kind of software they use. But not updating can cost much more. A data breach in the cannabis industry can cost around $200,000, so regular updates are a good way to save money.

What You Need to Do

To keep software updates working well, businesses need to:

Check their systems often for new updates
Install updates quickly
Use automatic update systems if possible

Checking regularly can help find and fix security problems before they cause trouble.

Following the Rules

Keeping software up-to-date helps cannabis businesses follow industry rules. It shows they’re serious about protecting private information. In the cannabis industry, where rules change often, regular updates can help businesses stay on top of things.

Update Type	Cost	Work Needed	Follows Rules
By Hand	Low	High	Meets basic rules
Automatic	Medium	Low	Meets stricter rules (like HIPAA)
Custom	High	High	Meets specific state laws

5. Employee Training and Awareness

How Well It Works

Teaching employees about data security is very important for cannabis businesses. When workers know how to keep data safe, it helps stop data breaches and cyber-attacks. Many studies show that people make mistakes that can lead to data problems. Good training can help fix this.

How Much It Costs

The price of training employees can change based on:

How big the business is
How complex the training is
How often the training happens

Not training employees can cost much more. A data breach in a cannabis business can cost about $200,000. So, spending money on training is a smart choice.

What You Need to Do

To keep employee training working well, businesses should:

Have regular training sessions
Keep teaching employees new things
Make sure workers know why data security matters
Check what employees know and how well they follow the rules

Following the Rules

Training employees helps cannabis businesses follow industry rules, like HIPAA. It shows that the business cares about keeping data safe. This can make customers and rule-makers trust the business more.

Training Type	Cost	How Well It Works	Follows Rules
Simple	Low	OK	Meets basic rules
Better	Medium	Good	Meets stricter rules (like HIPAA)
Special	High	Very Good	Meets specific state laws

6. Split Up Your Network

How Well It Works

Splitting up your network helps keep customer data safe in cannabis businesses. By making smaller parts in your network, you can stop problems from spreading if someone breaks in. This makes it harder for hackers to move around and cause trouble.

How Much It Costs

The price of splitting up your network depends on how big and complex it is. But it’s worth the money when you think about how much a data breach can cost. A study found that a data breach in the cannabis industry can cost about $200,000. Splitting up your network can help avoid this big cost and keep your business’s good name.

What You Need to Do

To keep your split network working well, you need to:

Watch network traffic
Update security controls
Check for weak spots often

By doing these things, cannabis businesses can lower the risk of data breaches and keep customer information safe.

Following the Rules

Splitting up your network can help cannabis businesses follow rules like HIPAA. It makes sure sensitive customer data is stored and sent safely, which helps avoid fines for not following the rules.

How to Split	How Well It Works	Cost	What You Need to Do	Follows Rules
VLAN Splitting	Very Good	Medium	Not Much	Meets HIPAA rules
Firewall Splitting	Good	Low	Some Work	Meets basic safety rules
SDN Splitting	Very Good	High	Lots of Work	Meets tough safety rules

7. Data Backup and Recovery

How Well It Works

Backing up data and being able to get it back is very important for cannabis businesses. It helps keep customer information safe and makes sure the business can keep running if something bad happens, like a computer crash or a hacker attack.

How Much It Costs

The price of setting up a backup system depends on how big the business is and what kind of system they choose. But not having a backup can cost much more. If a cannabis business loses its data, it could cost around $200,000 to fix the problem.

What You Need to Do

To keep a backup system working well, businesses need to:

Test the backups often to make sure they work
Update the backup system when needed
Keep an eye on the system to catch any problems early

Following the Rules

Having a good backup system helps cannabis businesses follow industry rules. For example, HIPAA says businesses must have a plan to keep patient information safe and available, even if something goes wrong. A good backup system helps meet this rule.

Backup Type	How Well It Works	Cost	Work Needed	Follows Rules
Cloud	Very Good	Medium	Not Much	Meets HIPAA rules
On-Site	Good	High	Some	Meets basic rules
Mix of Both	Very Good	Medium	Not Much	Meets tough rules

8. Incident Response Planning

How Well It Works

Having a plan for when things go wrong helps cannabis businesses deal with data breaches or cyber attacks. A good plan can:

Cut down on time the business can’t work
Lower money losses
Keep customers from losing trust

A recent problem with THSuites, a company that makes software for cannabis stores, showed private customer information. This shows why cannabis businesses need to keep data safe and follow rules like HIPAA and state privacy laws.

How Much It Costs

The price of making a plan changes based on how big the business is. But not having a plan can cost much more. If a cannabis business loses data, it might have to pay around $200,000 to fix things. It could also lose customers’ trust.

What You Need to Do

To keep the plan working well, businesses should:

Practice the plan often
Update it when things change
Teach workers about the plan
Look at what went wrong after a problem and make the plan better

Following the Rules

Having a plan helps cannabis businesses follow rules like HIPAA and state privacy laws. It shows they care about keeping customer information safe.

Plan Type	How Well It Works	Cost	Work Needed	Follows Rules
Simple	Not Very Well	Low	Not Much	Partly
Medium	OK	Medium	Some	Yes
Complex	Very Well	High	A Lot	More Than Needed

Note: This table shows the main types of plans. What works best depends on the business and what it needs.

9. Third-Party Risk Management

How Well It Works

Managing risks from outside companies is key for cannabis businesses to keep customer data safe. By checking the risks of working with other companies, businesses can stop problems before they happen. This helps avoid:

Damage to the business’s name
Money losses
Fines for breaking rules

How Much It Costs

The price of managing outside risks changes based on how big the business is. But not doing it can cost much more. If customer data gets out, it could cost a cannabis business about $200,000 to fix. Plus, customers might not trust the business anymore.

What You Need to Do

To keep managing outside risks well, cannabis businesses should:

Check risks often
Make sure they follow the rules
Watch other companies for any changes in how risky they are

This takes time and effort, but it’s needed to keep customer data safe.

Following the Rules

Managing outside risks helps cannabis businesses follow laws like HIPAA and state privacy rules. It shows they care about keeping customer data safe.

How Well It’s Done	How Good It Is	Cost	Work Needed	Follows Rules
Basic	Not Very Good	Low	Not Much	A Little
Normal	OK	Medium	Some	Yes
Very Good	Very Good	High	A Lot	More Than Needed

Note: This table shows the main ways to manage outside risks. What works best depends on what the business needs.

10. Following Industry Rules

How Well It Works

Following industry rules is very important for cannabis businesses. It helps them:

Avoid big fines
Keep a good name
Protect customer information
Stop data leaks
Keep people from seeing private data

How Much It Costs

The price of following rules changes based on how big the business is. But not following rules can cost much more:

Fines can be $7,500 to $50,000 or more for each mistake
Fixing a bad name and getting customers to trust you again can cost a lot

What You Need to Do

To keep following the rules, businesses must:

Check and update their plans often
Train workers
Change how they do things when needed
Look for risks and check if they’re following rules

Following the Rules

Following industry rules helps cannabis businesses:

Not get fined
Keep a good name
Keep customer data safe
Make people trust them

Rule	What It Does	Fine for Breaking It
HIPAA	Keeps patient health info safe	Up to $50,000 for each mistake
CCPA	Keeps customer personal info safe	Up to $7,500 for each mistake
State privacy laws	Keeps data safe and tells people about leaks	Changes by state

Note: This table shows some main rules for cannabis businesses. The exact rules and fines depend on where the business is and what it does.

Good and Bad Points

Pros and Cons of Data Security Measures for Cannabis Businesses

Measure	Good Points	Bad Points
Strong Encryption	– Keeps customer data safe – Stops data leaks – Makes customers trust you more	– Can cost a lot – Needs regular updates
Access Controls	– Only lets certain people see data – Lowers risk from inside threats – Makes it clear who did what	– Takes time to set up – Workers might need extra training
Multi-Factor Authentication (MFA)	– Adds extra safety – Stops fake emails from working – Makes customers feel safer	– Can be annoying to use – Might need new equipment
Regular Software Updates	– Stops cyber attacks – Fixes safety problems – Makes systems work better	– Can take a lot of time – Might need to stop work for updates
Employee Training	– Teaches workers how to be safe – Lowers mistakes – Helps deal with problems faster	– Takes time – Might need extra money
Network Splitting	– Stops viruses from spreading – Lowers chance of data leaks – Helps fix problems faster	– Can be hard to set up – Might need new equipment
Data Backup	– Keeps business running – Stops data loss – Helps fix problems faster	– Takes time – Might need extra money
Problem Response Plan	– Helps deal with safety issues – Lowers downtime – Helps fix problems faster	– Takes time to make – Might need extra money
Outside Company Risk Check	– Manages risks from other companies – Lowers chance of data leaks – Helps fix problems faster	– Takes time – Might need extra money
Following Industry Rules	– Helps follow the law – Lowers chance of fines – Helps fix problems faster	– Takes time – Might need extra money

Wrap-up

Let’s sum up the 10 data security tips for cannabis businesses. These steps help keep customer information safe, follow rules, and avoid big problems from data leaks.

When picking which security steps to take, think about what your business needs most. Here’s a quick guide:

Business Type	Top Security Steps
Large, lots of customer data	Strong encryption, tight access controls
Small operation	Focus on training workers

No matter your size, a good data security plan is key. It helps:

Build trust with customers
Keep your business name good
Help your business do well

Here’s why each step matters:

Security Step	Why It’s Important
Strong encryption	Keeps data safe from hackers
Access controls	Only lets the right people see info
Multi-factor login	Makes it harder for bad guys to get in
Regular updates	Fixes holes hackers could use
Worker training	Helps stop mistakes that could leak data
Split networks	Stops problems from spreading
Data backups	Keeps info safe if something goes wrong
Problem plans	Helps you act fast if there’s trouble
Check other companies	Makes sure partners don’t put you at risk
Follow rules	Keeps you out of trouble with the law