Evaluating an investment opportunity requires understanding the industry. One of the best ways to understand how a company operates in their industry is to understand the company’s talent strategy.
Cannabis is a young industry (well, young as a legal industry. I knew a lot of people in the cannabis business in the 1970s, and the statute of limitations has long since expired.)
There is much discussion, particularly in the compensation world, about the diversity of companies and job types in the cannabis sector. What is the talent strategy? Once you know that, what is the compensation strategy?
I have not seen an analysis of whether this compensation issue is complicated, or merely complex. My firm is developing multiple databases to map the compensation trends and patterns in the cannabis industry. And it is complex.
A farmer, a chemist, a retail store assistant manager, and a budtender walk into a bar. On payday.
What’s your pay strategy? Is it based on cannabis industry compensation survey data? Of course not. Every call from every one of your recruiters to each candidate is a different conversation. About pay.
I am a shareholder in 11 public and private cannabis companies and one cannabis ETF, including Green Thumb Industries, Inc. (GTBIF:OTCQX). GTI’s stock price is up 338% (three hundred and eighty eight percent, not a typo) in the past 12 months.
I monitor GTI’s SEC filings and website – both for investment reasons (happy investor here) and to explore the job structure complexity of the company because I am a cannabis compensation consultant.
If you’re trying to understand the complexity of jobs and compensation in the cannabis industry, here’s some information from the GTI 10-K, 18 March 2021).
Jobs at Green Thumb Industries
- 2,200 employees (29% increase in 12 months)
- Operations in 12 states
- 28 corporate entities, 23 of which are LLCs (Why is that important? Because compensation in LLCs, particularly those owned by a public company, is complex and complicated and a topic for future blog.)
“As of December 31, 2020, Green Thumb employs over 2,200 team members nationwide including:
- finance and accounting
- legal and compliance
- supply chain and operations
- sales and marketing
- commercial and cannabis agriculture
- customer service
- construction and project management
- real estate
- human resources.”
(converted to bullet points by CCC):
To me, that doesn’t seem complicated; but compared to many other companies, it couldn’t be more complex. Like the “commercial agriculture” and “chemist” juxtaposition. But there are not enough people with cannabis experience in any of those categories to supply talent for the growth of the cannabis industry. So how does a company staff for that rate of growth when there are, collectively, not enough people in the talent pool with cannabis experience?
Consider that GTI’s current recruiting challenge includes filling jobs in:
15 Job Groups, with
55 unique job titles (many in multiple locations), for a total of
149 open positions
Source: GTI Join Our Team Page (viewed 07 May 2021)
How is GTI going to find 149 people to work in a cannabis company? A candidate would have to have cannabis industry experience (assuming that personal consumption doesn’t count, but maybe.)
Let’s look at a few GTI job postings and requirements for candidates (emphasis added):
Regulatory Compliance Manager, CPG
- “Knowledge of compliance in a highly regulated industry such as cannabis, alcohol, tobacco, or pharmaceuticals preferred.”
- Translation: Cannabis preferred, things like cannabis preferred, or something else would be OK too.
- Have a solid understanding and/or come to master the Medical Marijuana laws, rules, and regulations
- Translation: Know all about Medical Marijuana laws; or if you know nothing, then be willing to become masterful at them.
Production Manager (to lead cultivation team)
- (looked for “cannabis” and “marijuana” in job posting – nothing)
- Translation – Seeking a talented Production Manager who may know zero about cannabis.
Here’s a job that I would think would require direct cannabis experience:
Cultivation Technician (you’re going to be growing weed!)
- Previous experience working with plants, plant disease, and pests is desired
This is the challenge in recruiting and hiring in the cannabis industry.
The high-growth cannabis industry needs to hire people with skills in a similar, or completely dissimilar, industry. Candidates are applying, and being hired, from industries in every direction. To do so, companies’ compensation strategies are going to have to be diverse and complex, for now, and maybe for some time to come.
Because it is young, the industry is filled with entrepreneurial companies and those, regardless of industry, come with unique issues and challenges.
It will take years for cannabis company organization structures, job families, job titles, and roles to evolve and stabilize.
In the meantime, any so-called cannabis industry “survey data” will be spurious. There are much better approaches in the meantime to developing a market-based compensation program given the multidisciplinary nature of the business.
It’s not that complicated, but it is complex.
And those people who walked into the bar? The farmer can’t attract workers because of the COVID stimulus generosity, the chemist is vesting in stock options from her Fortune 500 company, the retail store assistant manager thinks he should be getting overtime pay for working more hours than the Store Manager, and the budtender is cool with it all.