Six HR Tips For Cannabis Companies Aiming To Optimize And Retain Talent

By Deborah Saneman, Chief Operating Officer, Würk and Jojo Palacio, Head of People and Strategy, Würk

The cannabis industry’s latest growth phase has not only mainstreamed the plant among everyday consumers but also created an influx of new professional opportunities across the country. At the beginning of 2022, the regulated industry reportedly sustained over 428,000 full-time jobs –amounting to a 33 percent increase compared to the previous year. 

The sector’s rising rates of year-over-year job growth are especially consequential during a period when more workers than ever are prioritizing compensation, work culture and benefits packages during their job search. In this highly competitive job market, cannabis companies must refocus their human resources strategies to attract and retain critical talent. Both new and established cannabis businesses can position themselves as outstanding employers by strategically optimizing internal processes and putting employee needs first. 

Set higher payroll standards 

Due to cannabis’ current status as a Schedule I substance, most financial institutions will not engage with legal, plant-touching companies. This obstacle inevitably trickles down to vital internal services like payroll processing. As a result, paycards and on-demand payments are still not widely available in the industry. However, these regulatory hurdles should not preclude cannabis companies from providing consistent and timely paychecks, especially when living costs are soaring. 

In this highly regulated space, navigating the myriad of federal and local payroll laws can create unintended opportunity costs –which is why businesses should consider working with cannabis-specific payroll providers. These dedicated platforms are built with compliance in mind and have established relationships with vetted banks that service the cannabis industry. Leveraging features such as automated payroll management streamlines day-to-day operations by enabling companies to offer paychecks via direct deposit and utilize automated tax filings to maximize 280E deductions. Companies that implement modern payroll processing practices demonstrate that they value their employees’ time and contributions. 

Be meticulous about following data and tax protocols 

Of course, correctly collecting employee documentation is an integral part of ensuring seamless payroll processing. Companies must be diligent about having employees complete all applicable paperwork correctly during the onboarding process. Essential information, such as W-2 forms and state-specific employer identification numbers (EIN), must be securely stored in a system that is organized and easily accessible. 

Thorough employee documentation, paired with a cannabis-friendly payroll platform, allows companies to run like well-oiled machines by accurately tracking employees' accrued time, promptly delivering paychecks and ensuring that their internal practices are compliant with each state’s labor laws. Being proactive about data collection and retention can mitigate costly operational oversights that ultimately impact workforce planning, productivity and overall employee experiences. 

Understand how EINs may differ across state lines

Discrepancies in EINs are a common oversight among cannabis businesses operating in multiple states. Regulated companies should register with local tax agencies as soon as they confirm which tax jurisdictions –including withholding, unemployment or local– are required. Typically, employers are assigned one tax account number for each tax jurisdiction per legal entity, regardless of how many physical locations they may have within a particular state.

It is important to remember that payroll providers cannot process payments and tax filings without this information. Failure to provide tax account information in a timely manner may result in late or delinquent payments, which are often subject to considerable penalties and interest (P&I) depending on the state. Additionally, tax agencies will assess P&I on both the filing and the payment –which may result in higher than expected fines. 

Put your people first

Once companies establish reliable and compliant standard operating procedures, they can implement tailored measures to support their employees’ growth and well-being. In recent years, there has been a noticeable shift in human resource departments evolving into “people operations” teams with a more targeted focus on creating work environments that are supportive and engaging. 

A company’s ability to address its employees’ hierarchy of needs can make or break its turnover rate. Enhancing employee experiences at work will require HR teams to build a solid foundation encompassing consistent payroll, attractive benefits and accessible internal communication channels that facilitate seamless interactions between employees and management. As the industry continues to mature, it is increasingly important to utilize technology and automation to develop an HR foundation that reflects the company’s people-first culture. 

Companies can gain deeper insights into their employees’ needs by regularly soliciting feedback to identify any operational gaps or better understand how their people strategy impacts employees’ day-to-day and business objectives. Ultimately, companies should take measures to make employees feel heard and valued. At Würk, our CEO sets aside individual meeting times with most employees to further cultivate a sense of camaraderie and transparency throughout the company. 

Meet your employees where they’re at by prioritizing DEI

Many people entering the cannabis space are drawn to the idea of building a brand new industry from the ground up alongside peers from varying backgrounds and experiences. In order to foster an environment where employees feel a sense of belonging, companies should design their business focus around DEI and make sure that executives are aligned with these goals. 

When developing effective diversity initiatives, it’s important to keep in mind that DEI is a shared mentality, not a standalone department. This means company leaders must understand the company’s DEI expectations and find ways to incorporate these values into their team’s practices. Accessible starting points can include auditing all external corporate messaging to ensure inclusive language is being used or highlighting cultural awareness months at all-hands meetings. Companies can also incorporate tools such as AllyBot, a Slack plug-in that screens messages for common non-inclusive words and phrases. 

A company’s commitment to cultivating a supportive work culture should be evident from day one. HR specialists can use the onboarding process as an opportunity to understand a new employee’s preferred pronouns, important holidays or other meaningful information. Additionally, cannabis companies have a responsibility to acknowledge and address the plant’s complicated past in their DEI programming. Creating a culture rooted in giving back to the community or supporting industry-specific social causes, such as the Last Prisoner Project, illustrates the company’s ongoing commitment to creating a more inclusive workplace and industry. 

Clearly outline benefits and compliance expectations

Cannabis might be one of the few industries insulated from the full impact of the Great Resignation, but that doesn’t mean current employees or potential hires aren’t shopping around for benefits packages at competing firms that better suit their needs. To effectively attract and retain talent, HR specialists should adopt a total rewards approach that holistically addresses their employees’ hierarchy of needs. 

Frequent employee check-ins will allow HR departments to create benefits plans that offer specific medical benefits, office perks, 401(k) plans, training programs and equipment that tangibly supports the team’s development, success and inclusion. With record rates of employee burnout, it is imperative for companies to consider including hybrid or remote work options, flexibility initiatives and wellness resources as additional benefits.   

Ultimately, there isn’t a one-size-fits-all approach to fostering a welcoming and productive work environment. Success looks differently at every company, which puts the onus on HR teams to clearly define what the company expects out of their employees and what employees can expect from their employers. Companies investing in enhancing workplace experiences and professional development will have the ability to build robust talent pipelines that can sustainably support company growth as the industry continues to evolve.