Compliance is already a tricky lane of human resources. It becomes even more delicate when HR managers are tasked with navigating compliance in an “extra legal” market. Chief people officers at cannabis companies operate under a patchwork of state decriminalization and legalization laws, without the sturdy thread of federal support.
Paths forward for financial operations, payroll and general human capital management remain murky.
“The Workdays of the world won't do business with us because we're not federally regulated,” Curaleaf CPO Tyneeha Rivers told HR Dive. Her company is a multistate operator (MSO) in the cannabis industry, well-known for its wide swath of medicinal and recreational weed dispensaries: a handful in Maine, Maryland and Massachusetts, with a heavy presence in Illinois, more than a dozen locations in Arizona and at least four dozen in Florida.
Rivers stepped into her Curaleaf role in April 2022, with prior HR experience from three years at Curio Wellness, a medical marijuana company. She explained to HR Dive that cannabis professionals are forced to use alternative systems, because they simply can't choose the providers they want.
Human capital management partners are hard to come by
The approach to securing weed-friendly vendors is uncanny. Similar to the process for noncannabis companies, Rivers said, “You do your due diligence; you interview companies.” Payroll providers and HCM vendors are eager to get the ball rolling — right up until a cannabis CPO is frank about the nature of their company.
Sometimes, Rivers explained, HCM vendors will offer her and her peers demos, or affirm their excitement to take on a cannabis company as their client. “They call you back and say, ‘Sorry, I thought we could do business with you, but you know, we can’t,’” Rivers said. “There are companies, like Würk, who realized there was an opportunity within the cannabis space to offer companies robust systems,” she added.
“The Workdays of the world won't do business with us because we're not federally regulated.”
Chief People Officer, Curaleaf
Keegan Peterson, Würk’s late founder and former CEO, started the company in 2015. From day one, the goal had been to establish an HCM company solely for marijuana entrepreneurs. The idea was catalyzed when entrepreneurs vented to Peterson about their cannabis company getting the boot from their payroll provider. Peterson’s tech background and his transformative experiences in Colorado — at the precipice of marijuana legalization — led him to start the company. “Prior to founding Würk, I spent over a decade working for high-growth HR technology companies, developing a deep understanding of the various solutions within the space,” he explained in a 2020 Forbes interview.
Scott Kenyon, Würk’s current CEO, recalled that Peterson worked with credit unions in early adoption states like Colorado and Washington to establish a legal payroll process. “We were the only provider early on and we are the oldest provider in the industry due to that. Thank goodness, we have many competitors now,” Kenyon told HR Dive. “And I say ‘thank goodness’ because the more competitors we have, the more that the industry is growing. And competition only makes people better.”
Rapid market growth creates a profitable tightrope
The 2022 Leafly Jobs Report indicated that cannabis jobs increased 33% year over year. For the past five years, Leafly, a notable MSO, has collaborated with cannabis consulting company Whitney Economics to assess the state of industry employment. For the fifth year in a row, researchers observed annual job growth greater than 27%, the report said.
The number of full-time equivalent jobs supported by legal cannabis stood at 428,059 at the top of the year, when the report was published. In 2021, the cannabis industry created an average of 280 new jobs per day, Leafly reported. Arizona, California, Florida, Illinois, Massachusetts and Michigan were named as top drivers of economic growth, raking in a combined $13 billion in 2021 sales.
It’s almost trite to state that the legal weed industry is experiencing rapid growth; cannabis HR professionals continue to tell HR Dive as much, pointing to the dual allure and curse of the entire industry feeling like a startup.
Kenyon also nodded to this phenomenon, explaining that this knowledge is a factor in his business and HR strategy. Since 2018, Kenyon has served as an executive chairman and board member for Würk. Last year was his first as CEO and the theme was “Smokey the Bear.”
“When I came in, we were the world's best firefighters,” he explained, referencing the company’s solutions. “And I said, ‘We’ve got to stop that. We need to prevent fires for our customers.’”
Compliance issues are exacerbated by the recession
Würk’s theme for 2022 is “Stewards of the Industry.” Kenyon decided on it before recession talk was abuzz on fingertips and tongues. “I had no idea we were going into a recession or that inflation would be where it is today. I think more than ever, right now, customers do need us to be stewards,” he said.
For example, Kenyon said, “We have customers that are having layoffs for the first time. How do we support them there?”
There is no one-size-fits-all answer to that question. “These big enterprises, these big MSOs, have probably never gone through a layoff. We drive a ton of compliance through our platform, and help them verify the actions that they are taking and which data they need,” he explained. Medium-sized companies need more help with information and access; small businesses tend to need a lot more support across the board.
For example, employers need to be told, “‘Here are the different things you need to do.’ ‘Here's what you need to be doing for COBRA,’” Kenyon said. “You know, just going through all the steps that we kind of take for granted outside of cannabis.”
As cannabis CPOs parse through regulations, payroll providers and proposed legislation, it appears that softening attitudes toward cannabis aren’t just good for profit — they’re good for HR efficiency in the industry, too.