How the "Great Resignation" is Affecting the Cannabis Industry
Published on 8/11/22
COVID-19 has changed the American economy in many ways, perhaps forever. Businesses and employees alike have found themselves dancing to a new tango from the rise of at-home working to the demand for far higher wages. One major trend is the shift in workers leaving positions, known broadly as the "Great Resignation." Whether you are a business owner who believes that nobody wants to work anymore or a millennial who is glad to have options after a decade of wandering the wilderness, there is no question that the cannabis industry is not immune to this trend. At first, cannabis companies profited from workers leaving less-desirable positions. However, this too has changed, and even a flashy, growth-oriented industry like marijuana is seeing a squeeze to hire new people.
In December, this blog talked about how many unemployed or underemployed workers looked to job openings in marijuana for a career shift. After all, if you could choose between a budtender job and a bartender job, why take the latter? You certainly have fewer grumpy customers to work with behind the cash register at a dispensary. That shift was dependent on many factors, including the higher quality of benefits available from day one.
Yet as inflation has become the dominant political and economic issue of the day, wages have become the major priority. Given that there are nearly two open jobs for every one American looking for work, it has never been easier to be picky. Nor, for that matter, have businesses ever had to provide higher wages to compete for even entry-level talent. As just one example, Microsoft has doubled the budget available for salaries to ensure they are not hiring the second-best applicants. While some larger cannabis businesses have the cash to stump up for bigger paychecks, many others are mom-and-pop operations or have so little cash flow that they cannot provide this expenditure.
The cannabis industry recorded over $25 billion in income during the 2021 fiscal year. Not only is this a large figure, but it represents substantial growth over the previous year, with high expectations that the future will be even brighter. Featuring some 320,000 jobs, this is a growing industry across many different spaces. As legalization continues its pace, furthermore, these markets are only set to grow.
However, that newness and growth represent a major challenge facing the cannabis industry from the perspective of hiring and onboarding. Every employer wants to hire competent, experienced workers. That said, many people have little or no experience working in cannabis by default, given how recently there was simply no legal market at all. Even highly skilled professionals, like botanists and chemists, must be updated on the many differences between the status quo and cannabis cultivation.
The challenge of cannabis hiring only accelerates when looking toward the traditional harvest months of fall; October and November are often known as "Croptober" because of how much bud is going from the fields to the shelves. The harvest season requires many workers, but many are temporary, akin to how retail stores hire many seasonal workers for the Christmas shopping months. As temporary, seasonal, and part-time work becomes less attractive to many workers, the question of whether cannabis growers will have enough labor remains open.
Bonuses help to bridge the gap, but often bonuses can only go so far, especially given the relatively slim margins for dispensaries and grow-ops. In Denver, a city as close to a cannabis Mecca as you can find, cannabis wages rose in the summer of 2021. Yet, overall hiring levels fell, indicating that the link between higher pay and full employment is not as strong as traditional economics suggests.
Problems and Solutions
With the many challenges already weighing down the cannabis industry - such as political policy and oversaturation - it remains to be seen how successful companies will adapt or even thrive. After all, even the most significant challenges leave room for opportunity. Other industries are aggressively investing in machine work or remote work to overcome their labor gaps.
The future of marijuana employment may be on display in Canada, where the Ontario-based Safari Flower Company thinks they have found a solution. They have partnered with Mobius, a cannabis automation firm, with equipment that has proven to reduce the manpower and time necessary for trimming by up to 75%. Brigette Simons, Safari CEO, believes this to be the best retention strategy available. Previously, their harvests took a full five days. With the new Mobius hardware, the company managed to harvest their products in just one day. Furthermore, Safari reports fewer employee injuries and higher morale overall. Whether the industry at large can adopt automation as a success story or whether the human element cannot be topped remains to be seen.
Do you work in the cannabis industry? How have you noticed the changing attitudes towards employment and job opportunities? Let us know in the comments below!