Read your favorite news source, and you’ll likely find at least one if not several reports on how the U.S. labor market is tightening due to a looming recession. Amid such accounts, the cannabis industry is an extraordinary success story.
Rapidly growing and an expected source of significant job creation, legal cannabis saw a 44% increase in its workforce in 2018, which followed a 21% gain in 2017. By 2022, the cannabis workforce is projected to grow by 150%.
But unlike other companies in hot industries (like big data and renewable energy) that are attracting a growing, well-qualified pool of candidates, cannabis organizations find it challenging to locate people with the skills needed for niche roles. They are also struggling to hire the sheer volume of talent they need to meet soaring market demands.
A Talent Pool Squeezed by Stigma
“Finding top talent is a challenge in today’s market, but when you layer on cannabis, it segments the candidate market to an extent,” according to Jon Paul, chief financial officer for PLUS Products, a leading edibles company in California. As Paul points out, “There is a large number of people averse to our industry based on perception, even as the legal markets expand.”
To date, only 11 states have legalized recreational use of cannabis. With the growing demand for experienced executives to help young companies navigate marketing, finance, and compliance issues, more companies are turning to external recruiters to help them find candidates with needed mainstream business skills. And while the current federal prohibition of cannabis in the United States has kept larger recruiting firms from diving into the market so far, mid-sized ones are having success in placing employees.
“There are some firms that now specialize in the cannabis industry, which has helped expand our options, but that doesn’t always address key hires in specific functions like finance, supply chain, or compliance,” Paul adds. “We try to leverage our internal team, but have used outside specialists for key roles.”
The stigma associated with cannabis is a significant hurdle for employers as candidates are often cautious about entering a sector that has been associated, until recent years, with illegal behavior.
The number of people who decline director-level roles in the industry because they fear they won’t be able to return to a position in a more traditional sector at a later date is almost 50%.
“I have turned down some interesting opportunities primarily because cannabis is still illegal on the federal level, and that lingers in my mind as well as with my family,” reveals Jeff Harris, an executive who has held a variety of senior-level roles on the West Coast. “While the signs all point to continued growth, and so many states are legalizing cannabis, the fact remains that using it is still in violation of federal law, and I don’t know what effect that could have on my career.”
Meanwhile, candidates unconcerned about such stigma may not even know about the industry’s in-demand jobs, especially since the Bureau of Labor Statistics does not report on the industry because cannabis remains an illegal substance federally. Consequently, they also may not know how well jobs in the industry can pay. According to Glassdoor, the annual median salary for new job openings in the sector is around $58,000, which is 11% above the current median U.S. salary. Furthermore, employees who work directly with customers earn as much at $16 per hour, which is over $5.00 above the highest minimum wage reported in any state.
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5 Ways to Overcome Hiring Obstacles
Below are five ways that cannabis employers — and organizations in other industries — can increase their candidate pools and expedite the hiring process.
1. Remove the Stigma
The chemical cannabidiol (CBD) impacts the brain in ways that make it function better without giving it a “high,” while tetrahydrocannabinol (THC) has notable pain-relieving properties. Both substances can be used to relieve chronic pain, alleviate anxiety, reduce inflammation, and treat glaucoma and depression. Clear differentiation for the average person is still muddled, but expanded marketing that highlights health benefits, as well as other educational information, can be an effective way to fight the stigma associated with usage.
2. Adopt HR Best Practices
Candidates should see that cannabis employers have the same recruiting, hiring, and onboarding processes — and employee benefits — as companies in other sectors. Implementing HR best practices such as performance-linked salary increases and rewards, a well-defined reporting structure, a fair evaluation system, and open discussions and feedback mechanisms can help you not only to hit your hiring targets but also achieve your organizational goals for the year.
3. Project a Professional Image
Cannabis can offer an alternative career path to younger workers who are looking for solid-paying positions, without the massive student-loan debt associated with obtaining a college degree. To tap into this growing talent pool, drop any vernacular references to cannabis, such as pot, weed, and marijuana, and make sure your descriptions of your business and the products you provide make you sound like a professionally managed organization.
4. Fill Key Positions With Outside Candidates From Regulated Industries
Pioneers who brought the cannabis industry into the mainstream may be experts at cannabis but not necessarily in the functions required to run a successful business. For upper-level manager and executive positions, candidates with backgrounds in highly-regulated industries, like pharmaceuticals and alcohol, can hit the ground running and bring valuable experience.
5. Use Outside Resources and Expertise to Mitigate Risk
The cost of hiring the wrong employee can be much higher than any executive-recruitment fee. In an industry just starting, you’ll need recruiters who can help cannabis executives determine the specific expertise needed to help their companies move from a start-up to a mature corporation, as well as identify board members who can be strategic resources for future growth.