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Why Is There Such a High Turnover Rate In The Cannabis Industry?

The cannabis industry is attracting a lot of massively talented people ranging from former Dell executives to Silicon Valley investors. But not everyone who gets in stays in.

As in any nascent industry, the turnover rate in the cannabis industry is high. The learning curve in terms of both employment law and company culture can be steep. Firms and employees alike can have a difficult time adjusting in a sink-or-swim environment with employment standards that are only beginning to be defined.

According to Keegan Peterson - CEO of the payroll platform company Würk - one study on cannabis industry employees conducted by the firm Highest Reward found that people who want to be in the cannabis industry aren't necessarily happy where they work.

"While 80 percent look at it as their career - which is great, because it shows people are passionate about the industry - only 30 percent would recommend their employer to a family member," Peterson said in a recent interview. "We're seeing a disconnect of people who love the industry but don't like working for their employer."

Peterson says cannabis companies need to meet the standards of the 21st century workplace.

"Employers aren't offering the things they need to be happy: benefits, treating people right, flexible scheduling," he said. "Things which in other industries are taken for granted, the cannabis industry doesn't have yet, so people don't know what the expectations are for them as employees."

In addition, Peterson tells Civilized, the old adage is true: people don't quit jobs, but supervisors.

"The number one reason that employees quit," according to Peterson, "is because they don't like their manager. The number two reason is because they weren't scheduled to their availability - a common problem in the hourly workforce."

It's a business about people too, not just plants

In such a highly regulated industry, in which businesses are responsible for tracking plants and compliance with Byzantine restrictions, they forget it's also important to take proper care of the people who work for the company.

"You don't pay as much attention to the HR side," said Peterson. "But there are huge consequences for not having these things in place: misclassifying an employee, let's say, or paying an employee incorrectly."

Peterson knows of what he speaks. Würk, a platform designed specifically to help cannabis businesses integrate all their HR processes into a single platform, is the only payroll platform in the cannabis industry. According to Peterson, the aim is to a) keep employees happier and b) save employers from the hassle of rehiring.

"It empowers employees: it gives them their paycheque, allows them to enter and update their information, and specify their availability," says Peterson. "It gives them data when they need it. On the employer's side, you can create schedules, see your employees availability, and it automates the communication between the employers and the employees."

Würk was part of the spring class for the cannabis business accelerator, CanopyBoulder. Peterson said the program will help his Denver-based business grow to serve cannabis companies countrywide.

"We need to be able to scale very quickly into multiple states, and Canopy helped us focus and build a team to support that," said Peterson. "It's an experience that I would do over and over again, and it was very helpful to me."

Tech solutions to HR woes

While technology like this exists in almost every other industry, the banking hurdles that still exist for the cannabis industry have prevented many companies from finding fully integrated solutions to their HR woes.

"The companies that sell this tech are backed by national banks that won't allow them to sell to this industry," said Peterson. "A lot of major payroll companies shut down marijuana accounts, and tell them they can't use their payroll systems."

Würk has worked around these strictures by creating partnerships with banks that are open to the industry.

The bottom line, he says, is that legal cannabis represents a massive opportunity in a era of chronic, high unemployment - and a higher standard of organization is what will allow the industry to flourish.

"There are 160,000 employees in the US industry now, and we're looking at 600,000 by 2020, and those are brand new jobs," says Peterson. "It's sad that we're not talking about that every day."

Banner photo: Keegan Peterson, CEO of Wurk.


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