Why are so many good people leaving cannabis?
“Take this job and shove it.” – Johnny Paycheck
Workers are leaving the cannabis industry in droves, both involuntarily (i.e. layoffs) and increasingly voluntarily.
Industry-wide data is scarce, but you don’t have to look hard to see a revolving door of skilled workers and managers right across the sector. High turnover of quality people has serious implications for operations, morale and SG&A costs, especially when the firm is organizationally immature and growth focused. Things will get worse before they get better.
Why these sudden exits?
1. Weak leadership and cultures
In large MSOs and LPs, it is relatively easy to find many executives lacking basic managerial competencies such as coaching, role modeling and communication skills. Certainly, there are good cannabis leaders but nowhere near the numbers you will find in other industries. Not surprisingly, poor management inevitably leads to high turnover.
Employees also don’t get off the hook that easily. When it comes to cultural health, it takes two (with management) to tango. Scratch below the surface in numerous companies and you will find your share of Prince Harrys and Meghan Markles.
2. Cold, hard industry realities
For many, weed’s cool factor is long gone. Employment life is too short to put up with the day-to-day grind, uncertainty and unprofessionalism (especially if you are a women). This challenging environment repels the faint-hearted, jaded and those looking for financial stability.
Moreover, staff turnover puts additional burdens on those who stay, increasing their flight risk.
3. Compensation (relatively) stinks
In general, cannabis compensation is low compared to other sectors for similar jobs. Pursuing credos such as ‘wanting to change the world’ or ‘looking to get rich, quick’ led people to accept a salary discount when they entered the cannabis space. This ‘discount’ cuts across common functional areas like sales & marketing, IT and finance. For many, it's hard to stomach a salary discount in an inflationary climate when your stock & options are way under water and the company is in survival model.
Wage-driven turnover could easily accelerate. The ‘Great Resignation’ plus localized labour shortages are driving up wages outside of cannabis making our belt-tightening industry even less competitive.
4. It’s the economy, stupid
The cannabis industry has been hard-hit with layoffs. It’s a fact of working life that when you are laid off you often want to leave that industry, especially when that sector does not have the best short-term prospects.
The cannabis rooster is coming home to roost.
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