Yes this seems to be increasingly common, at least on the west coast. The suboptimal part is that the buyer typically gets hit with an out-of-network ATM fee for doing this, so the consumer is paying $2-5 for processing per transaction.
That’s pretty small potatoes though compared to going to a bank yourself and making a transaction for cash you don’t normally have around. Maybe there’s an ATM down the block but that’s not the case for many people.
And those ATMs around the block from a dispensary (or even in the same buildimg) would still charge a fee for withdrawal anyway (as they are always a third-party ATM and not a bank one, so you get that big message on the screen about an extra fee for withdrawal).
Use a credit union or bank that doesn’t charge ATM fees; that’s what I do. Any CU-related ATM withdrawal is always free and I get 10 ATM withdrawals a month with fees reversed.