The $41.5B Cannabis Industry Needs For Cybersecurity

CYBERWARZONE – The legal cannabis industry, also known as the Green Rush, is rapidly expanding with more states legalizing medical and/or recreational use.

Key takeaways:

  • Cybercrime is a major threat to the cannabis industry due to its unique circumstances and vulnerabilities.
  • Cybercriminals target the cannabis industry due to its newness, lack of information, and privacy concerns.
  • The impact of cybercrime can be devastating for cannabis businesses, including financial losses and reputational damage.
  • Cybersecurity measures, including staff training, secure systems, strong passwords, and third-party risk mitigation, are crucial for protecting cannabis businesses from cyber threats.
  • MSSPs can provide valuable support for cannabis businesses, offering managed security services, compliance expertise, a range of cybersecurity services, a proven track record of success, and a customer-centric approach.

According to a recent study by New Frontier Data, the United States cannabis market is expected to double in size from 2020 to 2025. However, with media attention, billions of dollars of cash, and unique circumstances, the cannabis industry has become an attractive target for cybercrime.

U.S. Legal Cannabis Market Projected to Grow to $41.5B by 2025.

New Frontier Data

Cybercrime can include cybersecurity threats such as credit card theft, misuse of personally identifiable information, ransomware, or even stealing trade secrets of cannabis retail, grows, and ancillary businesses.

The $41.5B Cannabis Industry needs for cybersecurity
The $41.5B Cannabis Industry needs for cybersecurity

Why Cybercriminals Target Cannabis

Cybercriminals are motivated by higher payouts and the likelihood of vulnerabilities to exploit. The cannabis industry is new and lacks mature industry examples to follow, making it less likely for companies to have sufficient cybersecurity protection.

Additionally, a significant portion of cannabis businesses are in the startup phase, making them ideal targets for cyberattacks due to their lack of awareness of potential threats.

Privacy is much more valuable to cannabis patients, and there is more to gain by seizing data, whether from an outsider or an inside job done by an employee.

Cyber attacks can more easily target most cannabis businesses since they are not large enough to afford an IT person, IT staff, or a complete cybersecurity team.

Impact of Cybercrime for Cannabis Businesses

The average cost of a data breach exceeds $3 million, according to a study by IBM. This includes all costs, such as remediation, notifying clients, and following all state laws for resolving the situation. The outcome, according to the National Cybersecurity Alliance, is that 60% of small businesses go out of business within six months after their security breach.

Even if a business can handle the financial fallout, there is irreparable damage to its reputation and brand resulting in lost revenue for years to come. Consumers feel that brands are responsible for protecting the information they share, and failing to do so can have catastrophic consequences. A 2019 Consumer Survey found that 81% of people would stop engaging with a brand following a data breach.

Prime Examples of Cybersecurity Threats in Cannabis Businesses

Cannabis businesses face real cyber threats, as evidenced by various incidents. For instance, in 2019, a cannabis software was hacked, exposing personal health information and customer data of over 30,000 individuals, including names, addresses, email addresses, DOB, phone, and medical ID numbers.

In 2017, MJ Freeway, a tracking system for the cannabis industry, was hacked twice in the same year. Late in 2018, hackers also breached information belonging to almost 5,000 customers of an Ontario Cannabis Store.

In 2021, Aurora Cannabis, a Canadian cannabis producer listed on both the Toronto Stock Exchange and the New York Stock Exchange, experienced a breach in their system on Christmas day.

A hacker gained unauthorized access to the system and stole data from the company. It was reported that the hacker tried to sell the stolen data on the dark web.

MSSPs for the Cannabis Industry

Managed Security Service Providers (MSSPs) are a perfect match for businesses in the cannabis industry for several reasons.

Firstly, most cannabis businesses do not have the resources to hire full-time cybersecurity personnel or teams.

This leaves them vulnerable to cyber threats, which can lead to data breaches and the loss of sensitive customer information.

An MSSP can provide round-the-clock monitoring, threat detection, and incident response services to protect against cyber attacks.

Secondly, the cannabis industry is highly regulated, with strict compliance requirements that businesses must adhere to.

MSSPs have experience working with highly regulated industries and can help cannabis businesses maintain compliance with laws and regulations. This can help businesses avoid fines and legal liabilities.

Thirdly, MSSPs can provide tailored solutions to fit the unique needs of each cannabis business. They can help businesses identify their specific cybersecurity risks and vulnerabilities and provide customized solutions to mitigate those risks.

This can include everything from network security to data protection to employee training.

Partnering with an MSSP can provide cannabis businesses with the cybersecurity expertise and resources they need to protect themselves from cyber threats and maintain compliance with regulations.

Key Features of a Cybersecurity Company for Cannabis Businesses

To best support cannabis businesses, a reliable adult cybersecurity company must possess several key features. One crucial aspect is a deep understanding of compliance standards and regulations governing the cannabis industry.

Partnering with a cybersecurity provider who can help you stay compliant with different laws and regulations at the state and federal levels is essential to avoid potential legal consequences.

The company should also offer a range of cybersecurity services to protect your business from various types of cyber threats, such as phishing attacks, ransomware, and social engineering.

These services may include vulnerability assessments, penetration testing, threat intelligence, incident response, and ongoing monitoring.

Moreover, a proven track record of success in working with similar businesses in the cannabis industry is vital. Testimonials, case studies, or other forms of proof that demonstrate the company’s experience and expertise in protecting cannabis businesses from cyber threats are a plus.

Lastly, a customer-centric approach is critical. The company must focus on understanding your specific business needs and tailoring its services accordingly.

This may include offering flexible service agreements, providing personalized consultations, and being responsive to your needs and concerns.

To conclude

In conclusion, the cannabis industry is a prime target for cyber threats, making it crucial for businesses to invest in reliable cybersecurity measures.

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An MSSP with experience in the cannabis industry and a deep understanding of compliance standards, as well as a range of cybersecurity services, a proven track record of success, and a customer-centric approach, can provide the protection needed to keep your business secure.

Have you experienced a cyber attack in the cannabis industry, or are you taking proactive measures to protect your business? Let us know in the comments below.

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