Why Cannabis Companies Should Focus More On Retention

By Liesl Bernard

Up until recently, the cannabis industry was growing at a breakneck pace and the focus was on hiring. 

U.S. cannabis retail sales skyrocketed from $3.1 billion in 2015 to $33 billion in 2022. In response, hiring boomed: the number of cannabis jobs has grown from more than 100,000 in 2017 to more than 400,000 at the start of this year. 

But inflation, lagging federal marijuana reform, and the lack of funding for cannabis companies have created economic uncertainty, causing numerous companies to conduct layoffs. In fact, many reports say the number of cannabis jobs dropped between 2022 and 2023. 

I’ve spent the last 23 years of my career in executive search and staffing, and experienced several booms and busts. I led executive search and staffing at the largest search firm in the world, Robert Half, in 2000 when the dot-com bubble burst, and during the 2007 to 2009 Great Recession. The most important lesson I’ve learned during times of economic uncertainty is that organizations must focus more of their time and energy on retaining top talent by building winning cultures. 

It seems obvious, right? But in reality, few cannabis companies have invested in building winning cultures that retain top talent. In fact, many run-of-the-mill best practices in other industries are rare in the cannabis industry. That’s primarily because the cannabis industry is still in its infancy, and most cannabis companies are startups that don’t have bandwidth to prioritize HR over chasing the next license and growing their businesses. 

But as the economy improves, hiring picks up, and employees start to weigh their options, companies that haven’t invested in building winning cultures that retain top talent will be at risk. Here are three things our most forward-thinking clients are doing to build winning cultures and retain top talent that every cannabis company can implement. 

Use Temporary And Fractional Workers To Bolster Your Full-time Team 

Employees are stretched thin after layoffs, which hampers morale. Temporary staff (people who do a job for a specific period of time) and fractional executives (people who are hired by a company to fill an executive role for a fraction of their time) can help. You can offload some of your full-time employees’ work to these workers, giving your full-time employees more bandwidth and work-life-balance, which boosts morale and retention. Temporary staff and fractional executives also cost less than full-time employees, which is music to many cannabis companies’ ears. 

If this is the first you’re hearing of temporary staff and fractional executives, you’re not alone. While they’re commonplace in other industries, they’re a relatively new addition to the cannabis workforce. Only a handful of recruitment firms in the cannabis industry offer temporary and fractional executives, which has kept awareness and demand for their services low. That’s a shame because of the value they offer cannabis companies and their employees. 

Conduct Performance And Stay Interviews 

Performance is the value of an employee’s contributions to an organization over time. Conducting performance reviews once or twice a year gives managers an opportunity to highlight an employee’s strengths and weaknesses, and what’s needed to make it to the next level. They create transparency, which ensures managers and employees stay on the same page. 

But performance reviews aren’t the only kind of reviews companies should be doing. I’m a big believer in stay interviews - a meeting with a high-performing employee where you try to uncover what inspires them to come to work every day. Stay interviews also offer an opportunity to find out what may influence a stellar cannabis employee to consider other jobs. They’re typically done with enough time to recognize and correct issues, so that high-performing employees don’t jump ship. 

Don’t think stay interviews are necessary? Well consider this: A 2021 Gallup survey found that 52 percent of voluntarily departing employees say their manager or company could have done something to prevent them from leaving their job. With many employers estimating it costs three to four times a person’s salary to replace them, stay interviews seem like a worthwhile investment to me. 

Give people who are being laid off the resources they need to find their next gig 

Many companies facing layoffs provide employees with severance checks and call it a day. That’s the least they can do. Taking it a step further and helping former employees find their next gig is not only the right thing to do, it will also help maintain morale within your company and increase the likelihood former employees put in a good word when someone in their network asks them about your company. 

I’ve been really impressed by companies that go the extra mile by offering former employees outplacement services - like job placement assistance, resume analysis, and interview training and preparation. Even simply offering to be a reference or write a recommendation on LinkedIn can go a long way. 

I’ll be the first to admit these three best practices aren’t rocket science. But they can have a tremendous impact on your culture. If your employees are happy, they’re less likely to jump ship. And most importantly, your business is less likely to flounder. That’s because no one knows your

business better than your employees. They have institutional knowledge and no-how that is not only difficult, but costly, to replace. That’s why cannabis companies simply can’t afford not to invest in building winning cultures that retain top talent.