Committee Blog: Mitigating Risk in Your Cannabis Workforce

We in the cannabis industry are all too familiar with working in an industry with high levels of risk. These risk factors can come in a variety of different forms—from federal intervention to banking to security. However, an aspect of risk that’s often overlooked in the cannabis industry is related to one of the most vital aspects of a functional and compliant cannabis operation—the employees. 

Here we will look at risk and risk mitigation techniques involved with identifying the right individuals for hiring in this regularly changing industry, employee training, and the best onboarding/ offboarding practices.

Hiring the Right Folks 

I’ve worked with clients across over a dozen different cannabis markets and one of the most recurring pieces of insight I get from newer business operators is a desire to work small. The fewer people the better. In many instances I’ve had clients who wish to not hire or pay anyone full-time at their cannabis operation except for themselves. 

While this can obviously decrease overhead costs by having a small personnel pool, it’s virtually inconceivable to have a regulated and compliant cannabis operation—be it a cultivator, manufacturer, retailer, or even a microbusiness—without well-trained and well-qualified individuals within the business. No one can do this work on their own, so you will need to hire the right folks for the job. 

From a risk mitigation standpoint, having the right processes in place is essential. This involves finding people with industry experience or at least relevant experience to their job duties, running thorough background checks for new hires, and assessing the specific needs of your own business operation from a personnel standpoint. What does this last point mean? Every cannabis operation is unique, and requires different demands of employees. For example, a manufacturer may want to make sure they have individuals comfortable with industrial machinery associated with extraction or have knowledge in packaging and labeling and the state-specific requirements for such. Human error can increase the overall risks of an operation, so it’s critical to find good people for the business. 

The Importance of Training 

No matter how knowledgeable and experienced an individual may be, they will still need to be trained in a myriad of standard operating procedures, employee handbooks, and other processes. This is critical not just for a cannabis operation in general, but also for the business specific needs for each business’s unique structure.

Training is important not just from an onboarding perspective (more on that later!) but also for recurring purposes such as when regulations and laws change. We have all seen how states decide to update or modify rules and regulations, so it’s important to stay compliant with even the smallest changes that can impact a business. Being out of compliance with even minor updates can result in steep fines or even revocation of a cannabis license. 

As a tool for employees, training throughout their time at a business allows them to become more comfortable with operational readiness, improves one’s overall effectiveness with problem solving, and offers employees better resources to report any wrongdoing they may encounter. Well-trained and knowledge employees make for a better managed business and a business that’s taken proactive steps to reduce risks within their workplace environment. 

The Most Critical Employee Related Steps 

While air travel is safe, the most dangerous times are during takeoff and during landing. In many ways, this is applicable to employees and working in cannabis. When onboarding a new employee, it’s crucial to mitigate risks appropriately. This means, as mentioned previously, making sure the employee in question passes a robust background check. This is more often than not required by states too, but the strictness and the disqualifying factors an individual may vary. 

Additionally, when an employee leaves a cannabis business, appropriate offboarding procedures are essential. Diversion is one of the biggest threats which a cannabis operator will face. Luckily, there are steps to mitigate this and the easiest one often relates to employee training and offboarding. Should an employee be identified as having engaged in diversion, offboarding steps—which may include changing SOPs, having a detailed exit interview with said employee, updating keycards or access points for cannabis and cannabis products, and/or increasing physical security personnel on or around a premises—are valuable to have in place.

Offboarding is critical to compliant operations and operations which have taken appropriate steps to reduce risk. Documentation and fair, timely communication through a potentially emotionally charged process can assist with covering one’s legal and financial bases and ensure for a smoother transition between employees working in the same or similar capacities. 

Risk with Employees

On the whole, yes there are risks associated with anything and everything human related. This is true beyond just the cannabis space but is particularly unique here given the overall higher level of risks associated with working in this industry. However, every risk can be assessed and mitigated accordingly and this is also true with the people involved. Hire right, train well, and handle crises well and the risks overall can be more adequately addressed.  

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