Although cannabis and psychedelics businesses are at the frontier of positive change, they’re also exceptionally susceptible to cyberattacks. Threat actors may specifically target these markets since the stigma around them may make cannabis and psychedelics operators easier to exploit. At Rudick Law Group, we offer tried and tested cannabis and psychedelics cybersecurity solutions to protect your sensitive data and minimize security risks.
What is the purpose of a cybersecurity compliance audit?
A cybersecurity compliance audit identifies the extent to which your customer-facing privacy and data-sharing policies currently comply with laws and regulations. Commonly implicated regulatory schemes in a compliance audit include U.S. laws such as the Health Insurance Portability and Accountability Act (HIPAA) and EU laws such as the General Data Protection Regulation (GDPR). State-level regulatory requirements such as the California Consumer Privacy Act (CCPA) may also be covered in a cybersecurity audit.
Who needs a cybersecurity compliance audit?
All businesses should undergo a cybersecurity compliance audit — these days, cybercrime has never been more sophisticated. Per Crowdstrike’s 2025 Global Threat report, voice phishing (“vishing”) attacks rose 442% between the first and second halves of 2024. Average breakout times (the time it takes for a threat actor to start moving laterally across a network) fell to a mere 48 minutes, and the fastest observed breakout time was just 51 seconds. That means cybercrime is happening faster than ever.
Additionally, GenAI is being used to create highly convincing fake customers and job candidates, which can be used to infiltrate even the most well-secured networks. In November of 2024, 380,000 cannabis consumers had their data stolen by threat actors — and that was in a single breach.
Why are the cannabis and psychedelics industries susceptible to cyberattacks?
As cannabis and psychedelic businesses increase their online presence and scale, they, specifically, become targets for cybercriminals. Sophisticated threat actors are aware that the patchwork nature of regulations in cannabis and psychedelics, coupled with the stigma that these industries still reckon with, can lead to devastating consequences for these businesses in the event of a data breach. Politicians and regulators opposed to the growth of these fields can easily use data breaches to bolster their positions.
Additionally, cybercriminals know that many of these businesses are new and have had little time to prepare comprehensive cybersecurity plans. Accordingly, many threat actors believe that cannabis and psychedelics businesses are easier to breach and are more likely to pay a ransom or pay for decryption in the event of a breach than traditional businesses.
How much can a cyberattack cost a business?
A data breach often requires a forensic investigation, which may cost, on average, $15,000 to $30,000. Cyber attacks often force businesses to suspend operations, causing missed sales revenue opportunities that cost an average of $8,000 to $20,000 per day of downtime. In either situation, the consequences can be catastrophic.
If customer data is compromised, businesses are often legally required to provide written notice to those affected. The notification process, along with the cost of providing credit monitoring services, averages between $20,000 to $50,000. Regulatory fines are often levied against businesses that fail to follow data protection laws after a breach.
Adding insult to injury, these costs fail to account for the most harmful consequence of a breach: loss of customer confidence. Sixty percent of small businesses go out of business within six months of a major data breach due to loss of customer trust.
How a cybersecurity compliance audit safeguards your cannabis or psychedelics business
We’ve learned that cyber audits help businesses prevent breaches and prepare to respond before a breach happens. These audits give companies the information they need to follow fair information practices, institute robust privacy policies, and comply with the complex network of data privacy regulations. Companies that take these actions prevent breaches by bolstering security and improving company-wide familiarity with cybersecurity best practices.
In the event of a breach, cyber audits prepare companies to act quickly, reducing losses due to operational disruptions. A cyber audit can also mitigate regulatory consequences by establishing a company’s efforts to protect data, thus allowing businesses to negotiate favorable insurance rates by providing evidence of lower risk. In turn, this creates favorable facts for future litigation arising from a breach, as businesses that invest in an audit may be able to demonstrate a pattern of following best practices. Proper preparedness will increase customer trust, providing customers with hard evidence of a commitment to data protection.
How cybersecurity compliance audits work at Rudick Law Group
Clients who elect to receive a cyber audit performed by Rudick Law Group can expect:
- A review of customer-facing privacy and data-sharing policies for compliance with U.S. law and other commonly implicated regulatory schemes, such as GDPR, along with suggested revisions. Actual revisions are priced out separately on a case-by-case basis.
- A review of internal privacy and data storage/sharing policies for compliance with U.S. law and other commonly implicated regulatory schemes, along with suggested revisions. It includes an assessment of organizational cyber hygiene and breach response readiness. The actual revisions are priced separately, on a case-by-case basis.
- A review of existing cybersecurity incident insurance coverage, along with an assessment of sufficiency based on the data handled by the organization. Includes an assessment of cyber endorsements held on other policies and recommendations for coverage enhancement where appropriate. Policyholder negotiations are priced separately on a case-by-case basis.
Clients can expect the auditing process to take approximately two (2) weeks from funding. The process will begin with a meeting to identify policies for review, known areas of concern, and current data storage protocols. After the review process, the client will receive a Memorandum and Recommendations.
The Memorandum will provide an overview of the current state of the business’s cybersecurity program, identifying missing policies and procedures, gaps in cyber insurance coverage, areas of non-compliance with applicable regulations, and needed improvements in cyber hygiene. The Recommendations will then provide recommendations for improving the business’s cybersecurity program and identify any action items necessary to implement those recommendations, together with a preliminary estimate to resolve them.
Ensure cybersecurity compliance with Rudick Law Group
At Rudick Law Group, our cybersecurity risk assessment services and ongoing legal support ensure that you continually meet compliance requirements. We support your business in building a cybersecurity framework that safeguards your sensitive information. Our services maximize your organization’s security controls and give you complete peace of mind.
Our cybersecurity unit is led by Victoria Cvitanovic, a former prosecutor turned healthcare and business strategist who brings together her criminal, data privacy, and healthcare law knowledge, cutting-edge compliance experience, and lifelong love of technology to offer RLG’s clients a variety of unique services, including cybersecurity and data privacy audits. Schedule a consultation with Rudick Law Group today to secure these valuable services.
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