Scaling Success Through Human Capital Management: Essential Advice For Cannabis Companies Of All Sizes

For cannabis business owners wondering how to scale beyond payroll, here’s some straight advice: “Look for a system that can scale with you,” says Jenn Meadows, COO of Würk, a Human Capital Management (HCM) company.

Würk has been providing payroll, human resources as well as time and labor systems automation exclusively to cannabis companies since 2015. She spoke with journalist and Benzinga cannabis editor Maureen Meehan at the recent Benzinga Cannabis Capital Conference in Chicago.

Below are some insights from Meadows on the industry’s hot topics. 

What It Means To Scale Beyond Payroll

In order to juggle the inherent restrictions of the cannabis industry, Meadows reiterated the importance of choosing an HCM provider and a system tailored to the company’s specific needs and one that has the ability to scale as needed. 

Selection criteria involves redundancy of banking relationships, which is of ”primary importance” as is compliance processes and the ability to handle diverse needs arising from a company’s expansion. The chosen system, she emphasizes, should be able to manage everything from payroll and taxes to employee benefits and reporting.

Interestingly, Meadows believes that tax-related challenges for cannabis companies, such as the dreaded 280E regulation, actually do not differ from those of other companies, from a payroll perspective. Rather, the big differentiators for the cannabis industry include banking relationships and flexibility to respond to a multi-entity business's unique needs.

Würk is currently servicing around 80% of the industry’s top multi-state operators MSOs. “That means we're paying taxes in 49 states and 500 localities, so lots of tax expertise,” said Meadows.

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While smaller companies might deem HCM services unnecessary, Meadows says it’s advisable to seek help early on in their growth journey so as to avoid common pitfalls and to streamline their HR processes from day one. 

She advises companies to ask lots of questions to ensure that a potential provider possesses the necessary expertise to meet their specific needs. And, importantly, "someone that has their ducks in a row."

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In terms of M&As, Meadows’ experience in helping clients transition has showed her that there are clear advantages in having systems that are already aligned with larger MSOs.

That said, she noted that HCM providers play a key role in simplifying the complex landscape of human resources, payroll and compliance for cannabis industry players. She advises that it's best to keep one’s eye on those that offer scalable solutions for companies of all sizes while addressing industry-specific challenges at once.

Photo: Benzinga's Cannabis Capital Conference