Grow Your Team, Grow Your Business: A Practical Guide to Hiring in the Cannabis Industry

The cannabis industry can be turbulent but tends toward growth. Every time a state creates a new medical or legal framework, the market expands. This necessitates a steady stream of applicants coming into the industry to support these markets. Budtenders, processors, growers, back and front-end staff — every new market needs hundreds, if not thousands of employees to meet consumer demand. These positions require a multitude of skills: some require no higher education, just on-the-job training, while others require a bachelor’s or master’s degree to do well.

The most successful businesses focus on building a strong team where people feel heard and respected, while others have high turnover rates and “churn and burn” through employees. Hiring new employees can be a big step forward when done properly, or an anchor around a business if not taken seriously.

There are also legal requirements to consider. Many cannabis companies put a strong focus on creating a diverse team, opening up positions to communities that have been disenfranchised or disproportionately impacted by the war on drugs. Some states do not regulate who can join the industry while others ban people with felony convictions, regardless of whether it was a cannabis charge or not. You need to understand the specific requirements for hiring in your state.

The first step to a successful hiring process is to understand your needs. You need employees, sure — but what do you need out of those employees? Are you looking for people who take direction well or people who step up and take on new challenges? Do you want someone who you can train from the ground up or someone with prior industry experience? It’s not about hiring just to expand your team — it’s about hiring the right people to help you sustainably grow your business.

Doing this means focusing on more than a resume. Someone who looks brilliant on paper may be a poor cultural fit for your company, or vice versa. You’re not just looking for a cog in the wheel — you’re looking for someone who fits into your company culture and can settle in for the long term.

The cannabis industry can be hectic and frustrating, so you need people on your team who will weather the storms with you. It’s often said that time in the cannabis industry is measured in dog years because things can change so quickly. Maybe you want someone green to train and someone with experience to oversee them. Or perhaps you want to offload some of your less desirable tasks to a support role. Maybe you don’t need a full-time W2 employee because a contractor will fit in better.

One of the worst mistakes in business is hiring too many people too quickly and having to let them go just a few months later. Consider both the short-term and long-term needs of your business. One A-team player is worth three B-team players, so be discerning with who you bring on. A lean, efficient team can go a lot farther than a team with too many cooks in the kitchen.

There are many legal considerations that go into hiring employees, both at the state level that are industry-specific and labor laws at the federal level. While cannabis is still not federally legal, you still have to abide by federal labor laws — so be sure you’re well-versed in both.

Having employees also brings increased risk. Employees can get hurt on the job, require paid time off, or sue for breach of contract if a relationship turns sour. It’s not enjoyable to imagine all the ways that hiring can go south, but it is a necessary exercise to ensure your business is protected.

When you’re ready to hire, set aside time to review your cannabis insurance umbrella. You may need to expand it to include employee-specific policies, such as workers’ compensation and employment practices liability (EPL). An ounce of prevention is worth a pound of cure, so don’t bring new team members on without understanding the changes in your exposure and risk management plan.

There is also the tricky question of background checks and drug testing in the cannabis industry. While many industries drug test to check for cannabis, is it ethical to do so to employees working with the plant?

Additionally, Black and Latino communities were targeted for decades by law enforcement during cannabis prohibition. The requirements for background checks vary by state, but is it fair to automatically eliminate anyone with a criminal conviction for a plant that was demonized by the government?

Legal considerations overlap with ethical considerations for hiring in the cannabis industry, and you have to actively determine what your company policies will be. Unfortunately, some states with legal cannabis industries still don’t allow people with felony convictions — even if they were for cannabis-related charges.

You’ve researched state and federal labor laws, talked to your cannabis insurance partner about your coverage, and now you’re ready to start interviewing — where to find candidates?

The most common route today is digital, sharing the job posting on your website, social media (LinkedIn is particularly popular for hiring), and job posting boards such as Indeed and ZipRecruiter. There are also cannabis-specific hiring sites like FlowerHire and dozens of freelancer sites where you can search for qualified candidates.

If you want to intentionally cultivate a diverse workforce, however, look outside the digital world. Consider having a booth at a job fair, posting the opening in the local newspaper, and reaching out to employment agencies in your area.

Be clear about the qualifications and experience needed for your jobs, but be realistic too. A budtender or someone working on a processing line doesn’t need a bachelor’s degree, and an entry-level position doesn’t require 3 – 5 years of experience. C-suite positions may need higher education degrees, but are you specifically looking at people with cannabis experience, or are you open to other industry experience as well?

There are certain positions where candidates with industry experience may be preferable but be open to looking at transferable skills from other sectors. Cannabis is still a growing industry, which means there are still many people coming in from other sectors.

Above all, you’re looking for candidates who fit in with your company culture. It’s not just about their resume qualifications or degrees, it’s about finding the right fit for your company. There’s a touch of something that can’t be measured when it comes to hiring — when you find the right person, you’ll know.

How can you ensure that your hiring strategy sets you up with satisfied, long-term employees? By understanding that the process doesn’t stop when you extend an offer. Hiring is just the first step — how you onboard and train your employees sets them up for success or failure.

Your onboarding process should be robust, welcoming, and informative. The best employees are engaged and invested in the success of a company, and to become invested, they have to feel like they’re part of the team and the mission. What this process looks like specifically is different for every company. You may take their first few days to onboard and train or make it part of a week-long process. Employees need to feel empowered in their positions, and this comes from a combination of information and autonomy.

Be sure to emphasize your company culture as well as regulatory compliance and employee safety from day one. Walk the talk — employees need to see this care and consideration from the top down. Your new employees will talk to experienced ones and this can set their expectations.

If your management team pushes compliance onto lower-level employees, micro-manages, and doesn’t show appreciation, you can be that new employees will have a ticking timer in their heads to leave. On the other hand, if your management is supportive of your team, understands the importance of work/life balance, and empowers people in the roles they were hired into, you’ll have a completely different experience. A fledgling cannabis company is an all-hands-on-deck scenario, and your employees are always watching you.

If you find yourself swamped with internal tasks and unable to help new employees, consider outsourcing tasks. Risk management, insurance, HR, and payroll — all of these tasks can be outsourced to another company to allow you to spend more time in yours. At AlphaRoot, we partner with Wurk for payroll and human resources tasks.

It’s no secret that some cannabis companies have a turnover problem. This is highlighted best in dispensaries, where budtenders are often overworked, underpaid, and expected to be a medical resource for customers with very little training. But don’t think the problem is limited to retail outlets — too many hours for too little pay is a problem throughout the industry.

Employee turnover costs you money and is bad for morale. To reduce it, you need a workplace culture where employees feel they can bring their full selves to work. This means having an inclusive culture where everyone is welcome and providing competitive benefits.

Employees come to work to get paid and they deserve to be paid well. If you don’t think you can afford to pay people what they’re worth and give regular raises, run the numbers on employee turnover and hiring. A good long-term employee is always less expensive to keep than replace. Consider the cost of living (rent, groceries, gas, and utilities) in your area as well as the cost of medical insurance.

But don’t stop there. Money alone isn’t enough to retain people — provide clear paths for internal advancement and professional development. You may be surprised by how hungry your employees are for continued education and taking on more responsibility.

Your employee handbook should reflect all of this — not be some boilerplate space holder about creating a “workplace family.” This document can be seen as a legal document, so ensure it aligns with your EPL insurance policy too.

A few cannabis brands that understand this well are:

The HoneyBee Collective 

This Colorad-based preroll brand takes culture to the next level with an employee-owned business model. Each team member has a meaningful stake in both the ownership and operation of the company, ensuring employees benefit from the company’s success.

The Grove

A Nevada-based dispensary and cultivation center, The Grove has ranked on the Cannabis Business Times “Best Cannabis Companies” list for four years running. They offer a bountiful benefits package, including over 20 paid days off, covering 50% of medical insurance, annual bonuses, a retirement plan, and incentives for community involvement.

Kush House 

This Oklahoma-based dispensary ranked #1 on the Cannabis Business Times’s 2023 “Best Cannabis Companies to Work For.” It’s easy to see why, given that they pay up to 74% of the cost of health insurance, 100% of the premium for life insurance policies, paid time off for community involvement, and bonuses.

Rather than seeing hiring in the cannabis industry as an insurmountable task, approach it as a wealth of opportunities. The amount of people needed to support the cannabis industry’s growth is the opportunity to bring on talent that has been overlooked in other industries.

The minefield of local, state, and federal regulations is an opportunity to get creative. The prevalence of the legacy market in legal states is an opportunity to find experienced people who are dedicated to their craft. The right person on your team can help you scale operations, increase profits, and set the foundation for a lasting business venture.

One challenge that can’t be overlooked is the turbulence of the cannabis industry. Hire with this in mind — changes can and do happen overnight. Don’t hire beyond your means and scale too quickly, or you may find yourself having to let good people go. A lean team of passionate and dedicated people can move mountains, so be selective and hire cautiously.

Hiring is a necessary business task, but that doesn’t mean it’s simple. With foresight, intention, and proper risk management, you can build a passionate and engaged team of people who share your vision of success and weather the occasionally stormy seas of the cannabis industry with you.

Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by emailing [email protected] or calling 646-854-1093 for a customized letter of commitment or learning more about your cannabis insurance options.