6 Human Resource Tips Every Cannabis Company Should Know
Cannabis jobs are set to double in the next two years from 211,000
to nearly 500,000. Here are the HR things to consider when ramping your cannabis business.
If you’re in the cannabis industry, you’re likely riding the rush of changing regulations, opportunity, and high-risk-high-reward scenarios that pump your brain with excited neurotransmitters.
It doesn’t matter if you’re a dispensary, a point of sale technology, or cultivating plants, your business is rolled up in the changing landscape of the green rush, which can be distilled into three words: it is exploding.
As of 2019, the legal cannabis industry employed 211,000 full-time workers in the United States, a figure expected to double in the next two years.
The number of jobs in cannabis increased 21% in 2017, 44% in 2018, and another 20% in 2019 so far. That’s 110% growth in less than three years, dwarfing the rates of other top-growth jobs including:
- Health care aides, which are expected to grow 47%
- Wind turbine technicians, which are expected to increase 96%
- Solar voltaic installers, which are expected to grow 105%
With rapid growth comes rapid hiring
Rapid growth in the marijuana industry means rapid hiring.
But rapid hiring can’t be errant, especially in the turbulence of emerging markets in the US.
The cannabis companies that navigate the mess of industry regulations and build solid business infrastructure at the same time, will be categorical leaders and leave a legacy.
Apart from hiring and firing, there is applicant tracking, background checks, offer letters, time and attendance tracking, PTO policies, employee classifications, benefits, payroll deductions…the list goes on. Cannabis employers need to ensure all employee documentation is orderly and safe, and not just because it’s federally required.
It’s a competitive edge to implement processes that work right the first time.
“If I had to do HR and all of the manual process things that go with it, I would be months behind,” says Chris Coulombe, CEO of Pacific Expeditors, a two-part business that provides regulatory consulting and distribution for California’s newly legalized cannabis industry.
“Doing it all in a few clicks is a huge competitive advantage.”
Chris chose Zenefits HR as his HR partner to scale from one to 40 employees in 18 months.
“I couldn’t meet my aggressive growth plans without Zenefits,” he said.
CEO, Pacific Expeditors
In an effort to continue supporting the burgeoning cannabis industry at large, we’ve decided to pull together this helpful online that covers 7 HR Tips for Cannabis Businesses.
Pro tip: If you’re hiring at the clip analysts are projecting, you’ll love this New Hire Checklist for managers. Includes important materials to collect before your new hire’s first day, and through to 30, 60, 90 day check-ins.
Choose a proven HR partner as you hire
Business opportunities in cannabis are extra exciting because it feels like there is a looming expiration date on nascent business concepts and early-mover advantages.
Enterprising individuals have an opportunity to get in at the ground floor, and define a multi-billion dollar industry. The allure has attracted both legacy black-market cannabis processionals and non-cannabis processionals from a variety of backgrounds, all motivated by speed to action.
Swiftly moving companies who accurately rollout day-to-day operations will remain leaders.
They will be the ones defining what mainstream marijuana looks like for the coming generations. Companies like Aurora Cannabis and MedMen are already doing this.
interviewed by Nucleus Research 2018
Prepare for federal banking and payroll options
Federal policymakers are inching closer to inking legislation that would allow cannabis business to have access to federal banks with FDIC insurance.
For years, cannabis businesses have been operating legally within their state lines, but haven’t had access to federal banks, mortgages, or financing.
Once banking is permitted, payroll processing will be infinitely easier. Cannabis companies should be able to partner with payroll companies who will see cannabis clients as just another business client.
Choosing a nimble payroll partner that understands the needs of your business will help smooth any rough transitions.
Pro tip: Sometimes it’s best just to talk. If you’re unsure whether our HR software can meet the needs of your business, give us a call! (888) 249-3263
Clearly communicate job roles
In some state jurisdiction, workers who actually handle cannabis are held to stricter rules and regulations than those who don’t.
As a cannabis employer, it’s your job to make sure you develop and implement appropriate company policies so you employees know what they are allowed to do– and not do.
Finding yourself in legal hot water because of a mistake is not the kind of water you want your new cannabis business sailing in.
From posting job descriptions to on-the-job training, ensure every employee knows his or her role, and the specific boundaries or legal limits their role entails. Avoid mistakes and issues that could put your license at risk.
Pro tip: Post job descriptions and policies in one conveniently located spot for your whole workforce. Zenefits employee documentation makes digital copies of important documents that employees can access from their phones. Learn more about employee document storage.
Run background checks, verify employee eligibility
Cannabis founders stem from diverse backgrounds, some federally acknowledged, others not. Because of this, some founders may not fully realize the federal legal requirements for running a business and hiring employees.
What once was black market, is now legal. And sometimes vice versa, too. Things that became deregulated, can, in a matter of moments, switch to deregulated. For instance, regulations in Colorado became increasingly stricter since their original legalization.
“You come out with the best-laid plans for how you think something’s going to work and how the regulatory framework is going to perform, and you’re going to have to make adjustments to that,” said Ron Kammerzell, director of enforcement at the Colorado Department of Revenue, in an interview with Vox covering cannabis business news.
It gets confusing.
But here’s one thing that’s not confusing. If you’re going to hire employees, they must complete an I-9 Employment Eligibility Verification form, it doesn’t matter what industry you’re in.
The I-9 Employment Eligibility Verification form, helps companies ensure their employees’ identity and their authorization to work in the United States. Companies must obtain and retain the I-9 form for a certain amount of time in the event the federal government inspects them. Audits that result in missing forms and documentation result in penalties.
Something cannabis businesses can’t afford to risk.
Accurately classify your employees
Misclassification of employees is one of the most common reasons companies get dinged from the federal government. In cannabis, the workerbase is complex. Seasonal staff – such as trimmers, budtenders, or holiday sales reps – represent a sizable portion of the workforce. Employers need to know the various ways a worker can be identified: as a 1099 contractor, full time employee, seasonal, part time employee, intern, and more.
Knowing how the federal government defines each, will keep your cannabis business out of audit trouble. Here are a few resources and steps that will help:
- Step 1: Review the The Employer’s Guide to Independent Contractors Vs. Employees
This resource helps any employer know the key differences between employees and contractors. How does the federal government define these? What do you need to know before extending an offer as an employer?
- Step 2: Review Avoiding Employee Misclassification: The Difference Between Exempt and Nonexempt
After you determine who on your staff is eligible to be a contract vs. an employee, your next step is to determine which of the employees are exempt vs. non-exempt.
- Step 3: What are the Independent Contractor Misclassification Penalties?
What are the consequences of misclassification?
Earn employee respect & retention
Whether you’re just starting a cannabis business, or have been around for a long time, employee retention is likely top of mind. Minimize turnover and maximize employee productivity with a robust internal culture that incentivizes employees to stay with your company.
Turnover is costly and is especially troublesome for industries positioned for massive growth.
You need staff to run your business. If you’re preparing for hiring spree, you can’t afford employees leaving for better opportunities. You’re baseline requirements are still anemic for appropriate staffing.
Reduction in turnover saves you money and an increase in employee retention earns you more profits.
Studies have shown a 10% increase in employee engagement results in a $1,800 lift in profits. But how do you do that?
Keys to boost employee retention, and links for helpful tools/resources:
- Onboard each employee, well. Studies show the positive onboarding programs result in longer term employees and greater output, lifting retention by as much as 25% and employee performance by 70%.
- Create a cannabis employee handbook (here are templates to use) that showcases your mission, values, and company policies and perks.
- Build professional development processes to ensure your employees can further their individual career paths (here are performance management best practices to steal from).
- Pay your employees a fair and accurate salary or hourly rate. Here’s a free calculator tool to compare FT employee vs. independent contractor costs. The actual costs might surprise you!
Nailing your HR process for your cannabis business could be the difference between unwanted federal audits and productive, happy employees.
They say the grass is greener where you water it. Water your people and your processes.