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7 HR Best Practices Shaping the Cannabis Industry in 2024

Highlights

  • Staying ahead of new laws and regulations is one of the main challenges for cannabis businesses.
  • Offering compelling benefits and regular training opportunities improves retention and engagement.
  • At Greenleaf HR we provide tailored HR solutions for your cannabis business. Contact us to get started!

The cannabis industry is blooming, and it’s having a profound impact on the job market. According to the 2022 Leafly Jobs Report, America’s legal cannabis businesses supported 428,059 full-time equivalent jobs — a 30% increase from the previous year. In this context, HR best practices are essential to meet employees’ expectations and help companies thrive.

Businesses in the cannabis sector face unique challenges regarding HR, from complex and rapidly changing regulations to high employee turnover rates and banking bans. How can your HR team address these issues and prepare for the challenges ahead?

These 7 HR best practices serve as a compass to help you navigate this vibrant sector this year.

Let’s get started!

7 HR Best Practices for Companies in the Cannabis Industry

1- Create an Effective Recruiting Process for Cannabis Roles

As the cannabis industry keeps experiencing exponential growth in the US, it becomes important to improve your recruiting and hiring practices to attract the best talent and ensure long-term success.

The US cannabis market is projected to reach USD 50.91 Billion by 2032
— The Brainy Insights

Growing a team of fresh, talented employees at such a rapid pace can be a challenging (but rewarding) experience.

Here are a few tips to improve your recruiting process:

  • Set realistic expectations and provide clear job requirements. Cannabis job descriptions should clearly define the role, its responsibilities, and the main skills and qualities that your potential employee should have. When you highlight your company values, mission, and culture you are more likely to attract candidates with a similar mindset.
  • Source talent through multiple channels. Casting a wide net is essential to attract qualified candidates. Rely on multiple channels, such as cannabis job boards, social media, networking events related to the cannabis industry, and cannabis associations to ensure a broader and more diverse pool of talent.

2- Stay Updated on Changing Regulations to Maintain Cannabis Compliance

Compliance is a top concern for any business, but especially in the cannabis industry, one of the most heavily regulated sectors. Failing to comply with state and local laws can result in fines, penalties, and even the revocation of your business license.

With legal requirements constantly evolving, HR professionals must stay informed. Proactively staying on top of regulatory changes helps you ensure that your organization not only complies with current laws but also anticipates and adapts to future developments.

Here’s what you can do to ensure cannabis compliance:

  • Leverage cannabis compliance software. Make sure you check all the boxes with a platform that helps you monitor and manage regulatory requirements, from tracking licensing deadlines to automating documentation processes. These tools often offer real-time updates, so you can stay ahead of any legislative changes, minimizing the risk of compliance-related issues.
  • Have an effective inventory management system in place. Make sure to accurately track and report inventory to avoid potential legal issues and guarantee product safety. Seed-to-sale tracking software can help your business stay compliant with state regulations.
  • Implement compliance training sessions for employees. Share updated regulatory information among the team to ensure everyone is well-informed and aligned with the latest compliance standards.

3- Enhance the Onboarding Experience to Increase Employee Retention 

The cannabis industry —especially in retail shops— has an employee turnover rate of 40 to 60% in the first two months. This highlights the need for more effective onboarding programs.

“Effective onboarding is a journey, not an event.”
— Sharlyn Lauby, HR Consultant and Author

Onboarding sets the stage for employee success and has a positive impact on long-term retention and engagement. In the cannabis industry, where compliance and industry-specific knowledge are crucial, having a well-crafted onboarding becomes even more relevant.

Consider this when designing your onboarding program:

  • Design comprehensive onboarding programs that not only cover general workplace procedures but also delve into the unique nuances of the cannabis sector, providing employees with a solid foundation.
  • Establish mentorship programs to pair new hires with experienced team members. When new employees have a coworker to rely on, it’s easier for them to integrate into your company culture and speed up their learning curve.
  • Leverage technology to offer a smooth, dynamic experience. Use a self-guided platform to provide information to your new hires and ensure that all compliance-related paperwork is efficiently managed and tracked. Need help? Check out our onboarding services to see how we can help you streamline the process.

4- Invest in Growth and Skill Development for Cannabis Employees

In such a rapidly evolving industry, ongoing training is vital to keeping employees up to date on compliance, safety protocols, and emerging industry trends.

Having a knowledgeable skilled workforce can boost your sales and help you avoid hefty fines by staying compliant. Here are some HR best practices for employee training:

  • Implement regular training sessions that cover the latest regulatory updates, ensuring that the workforce remains compliant with ever-changing legal requirements.
  • Focus on specialized training to enhance employees’ understanding of the unique challenges and opportunities within the cannabis sector. This may include sessions on product knowledge, customer service, and the ins and outs of cannabis cultivation and processing.

5- Roll Out Employee Engagement Initiatives

Taking care of your employees and making them feel valued and heard can have enormous benefits for your cannabis business. Engagement initiatives not only increase employee motivation and satisfaction but also create a positive workplace culture.

“Take time to appreciate employees and they will reciprocate in a thousand ways.”
— Bob Nelson, Author of “1001 Ways to Energize Employees”

With such high turnover rates, keeping employees in the cannabis industry engaged seems like a true challenge. Here’s how to improve employee engagement this year:

  • Organize regular team-building activities. Promote activities that encourage collaboration and camaraderie among employees. This could include events, outings, or even virtual activities to accommodate different work settings.
  • Implement an employee recognition program to acknowledge and reward outstanding performance. Recognizing employees for their contributions cultivates a sense of appreciation and motivates the team to excel.
  • Understand why employees leave with exit interviews. Interviewing people who have decided to leave your cannabis business can provide insight into your work environment and identify opportunities to improve.

6- Design a Robust Benefits Package for your Cannabis Employees

In the competitive landscape of the cannabis industry, a thoughtfully crafted benefits package is not merely a perk but a strategic differentiator for attracting and retaining top talent.

Due to the rising costs of healthcare and living, more employees prioritize a strong benefits package when evaluating a job offer. According to SHRM, employees ranked healthcare as the #1 benefit that a company can offer them.

Are you rethinking your benefits package this year? Keep this in mind:

  • Understand your employees ‘must haves.’ This can help you get a sense of their needs and expectations, and tailor benefits for different locations and demographics.
  • Low budget? Explore other benefits that might be appealing to your employees. Small dispensaries don’t often have the resources to afford top-notch benefits. If that’s your case, you may consider offering other perks such as transportation reimbursements, off-site daycare, or a more flexible work schedule.

7- Partner with a Cannabis PEO to Handle your Business’ HR Needs

Cannabis businesses need to navigate complex regulations while managing a growing workforce in a competitive market. On top of this, many banks still refuse to operate with cannabis firms, adding an additional layer of complexity to payroll — although this might be about to change soon. For small companies with little to no HR infrastructure, this is a lot to handle.

By partnering with a Professional Employer Organization (PEO), companies can delegate complex day-to-day HR functions, including payroll, compliance, and benefits administration. That way, they can focus on their core operations while ensuring a healthy workforce and staying compliant.

Here’s what to consider when choosing a PEO for your cannabis business:

  • Cannabis industry expertise. A cannabis PEO provides you with a deep understanding of the cannabis industry’s unique dynamics, including compliance requirements, regulatory changes, and the specific challenges associated with HR in this sector. A PEO with industry expertise is better equipped to provide tailored solutions that align with the nuances of cannabis business operations.
  • Comprehensive service offerings. Evaluate the range of HR services offered by the specialized PEO. Beyond basic payroll and benefits administration, look for a PEO that can address specific needs of the cannabis industry, such as compliance management, safety training, and employee wellness programs.
  • Track record and reputation. Do your research. Consider client testimonials, case studies, and the PEO’s overall reputation for reliability and responsiveness. Partnering with a PEO that has a proven history of success in serving cannabis businesses instills confidence that your HR needs will be managed effectively and in accordance with industry best practices.

HR Best Practices: Final Thoughts

As one of the fastest-growing industries in the US, the cannabis sector faces numerous HR challenges — as well as new opportunities for growth and development. HR best practices are the guidelines to help you manage a productive, engaged workforce, and shape your HR strategy for this upcoming year.

At Greenleaf HR, we provide top tier HR solutions for businesses in the cannabis industry. From handling payroll to supplying employee benefits, we simplify your HR operations and help you reach your goals.

Contact us to find out how we can help you grow by implementing HR best practices tailored to your cannabis business needs.

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