Why the Penny Shortage Is a Major Cannabis Retail Problem

Following President Donald Trump’s order to halt new penny production, cannabis retailers are discovering that a one-cent coin can create outsized operational and financial headaches

Most cannabis retailers have probably not spent much time thinking about pennies.

That makes sense until you are standing at the register and do not have one.

On orders from President Donald Trump, the U.S. Mint ceased production of one-cent coins, and banks in many parts of the country are quietly limiting or eliminating penny distribution. Retailers are starting to notice the shift. Cash heavy businesses feel it first, and cannabis still handles more cash than most sectors.

For dispensaries, the impact shows up in small but constant ways at the register.

As banks limit penny distribution and the U.S. Treasury recommends rounding to the nearest nickel, dispensaries face real pricing and margin consequences on hundreds of daily cash transactions

Even with the growth of debit-based and cashless payment tools, cash remains a meaningful share of cannabis transactions. In many markets, operators estimate roughly a third of purchases are still paid in cash sometimes more depending on the store and customer base.

When exact change becomes harder to make, that issue repeats itself all day long.

A single transaction is easy to shrug off. Hundreds per day are not.

Without pennies, retailers are expected to round to the nearest nickel, as the U.S. Treasury recommends. That decision has a measurable financial effect. If a store rounds up, the customer pays slightly more. If it rounds down, the retailer absorbs the difference.

There is no neutral option.

Over the course of a year, those nickels accumulate. Consistent rounding can mean thousands of dollars in variance at a single location. For multi-store operators already working with tight margins, that is not trivial. In competitive markets with high operating costs, it becomes one more pressure point in a business that already faces significant regulatory and financial constraints.

Inconsistent rounding practices across staff and point-of-sale systems can create accounting noise, reconciliation headaches and potential compliance concerns in a tightly regulated industry

Operators are beginning to see the issue surface in their books. Consider a single-store operation processing roughly 400 cash transactions a day. Inconsistent rounding can create a daily variance in the $15 to $25 range.

At first, that may seem minor. Over several months, however, those discrepancies show up in reconciliation reports and raise questions about tax reporting accuracy.

In many stores, there is no formal rounding policy. Instead, the decision falls to individual cashiers. One rounds up. Another rounds down. A third tries to “even it out” by instinct. The result is inconsistency — in the drawer, in customer experience, and in financial records.

Most point-of-sale systems assume exact change is available. When that assumption no longer holds, small mismatches appear. Sales totals and cash on hand may not align perfectly. Drawer variances become more common. Sales tax calculations can drift by small amounts that require later correction.

In cannabis, where compliance scrutiny is high, even minor reporting “noise” can draw attention from auditors, regulators or financial partners.

Industry advisors warn that without clear policies and system updates, a minor coin shortage could compound existing margin pressures for smaller and newer cannabis markets

The broader risk is not the disappearance of the penny itself, but the possibility that rounding becomes an informal habit shaped by staff judgment rather than policy.

This dynamic can hit smaller or newer cannabis markets harder. Large metropolitan operators often have more flexible banking relationships, more payment alternatives and deeper back-office support. Newer markets may rely more heavily on cash and lean staffing, with more basic POS setups.

In those environments, even small inconsistencies stand out.

Some operators are responding proactively. They establish a formal rounding method, configure it in their POS system, train staff clearly and monitor the financial impact. If customers ask, the explanation is simple and consistent.

Others continue treating the issue as a minor annoyance. In those stores, the same purchase can be handled differently depending on the cashier or the day. Over time, those small differences stack up and become harder to untangle.

The penny shortage itself is not a crisis. But for cannabis retailers juggling cash management, compliance demands and tight margins, it is a reminder that even a one-cent coin can ripple through pricing, accounting and customer trust if left unaddressed.