14 August 2022 |

Employers: it’s not them, it’s you. The turnover crisis in cannabis retail.

By Kaitlin Domangue

I’m always shocked (and a little sad & frustrated) to read the stats about retail employee turnover in cannabis. 

Turnover doesn’t stem from a lack of interested applicants. People want to work in cannabis. People from traditional industries have been flocking to the cannabis space. Our industry is the most prolific job creator in the United States – supporting almost 500,000 jobs right now. 

Cannabis intelligence and data analytics company, Headset, has been reporting on budtender employee for a few years at this point and the data is always telling. 

The most recent report was published in July and the consensus is the same as ever: budtender turnover is happening at a high rate & we need to quickly repair it. 

Nearly 60% of budtenders, in the U.S. and Canada, were hired within the last year – so retailers have a freshly-hired staff at any given time. 

In both countries, approximately 55% of budtenders who worked at any point over the previous 12 months left the store by the end of that time period. 

Nearly a quarter of budtenders left their jobs before their first month, according to Headset’s findings. 

The U.S. Bureau of Labor Statistics reported a 47.2% turnover across all industries, so we know there’s an issue to solve in cannabis retail in terms of employee turnover. 

It’s not hard to find out why retail employees are leaving their positions – and fast. 

First, budtenders typically aren’t paid very well. Budtenders make an average of $14 to $25 an hour. And honestly y’all – I’ve personally never seen a budtender make $25 an hour. 🤷‍♀️ 

Maybe in California where the cost of living is higher, but I would venture to say $25 an hour is not the norm – even on the West Coast. $14 to $18 an hour is about typical and that’s simply not a livable wage. 

Employees leaving due to low wages is not a problem unique to cannabis, as I think we all know. U.S. workers who are paid the federal minimum wage ($7.25 an hour – unbelievable) have a 70% chance of leaving within a year, data shows. 

Sometimes unrealistic expectations about the cannabis industry also leads to new employees running for the hills. This industry is hard work. It’s millions of dollars in product we’re talking about, here. U.S. dispensaries make $2.1 to $3 million in gross revenue annually. You’re not paid to stand around. 

And some new employees don’t value hard work, just like some people in all industries don’t value hard work (no lazy stoner stereotypes here). The cannabis enthusiasts who enter the industry in hopes of an easy gig quickly get the memo and don’t stick around – whether it’s their choice or not.

“The media has at times portrayed an unreal expectation of day-to-day cannabis industry work. If employers aren’t clear about the details of the role during the interview process, it can potentially lead to a disappointing experience for the employee, causing turnover,” said Sara Thom, Director of Human Resources for Native Roots. “Giving candidates a realistic preview of the role – the good and challenging aspects – is key. The cannabis industry has a lot of incredible positions available in it that are meaningful and fulfilling. Guiding prospective hires by first understanding what it is they’re looking for is essential to fit the right candidate to the right position.”

Onboarding training, the quarter of employees leaving within a month indicates an issue with onboarding and new hire training. Valuable employee onboarding training can improve employee retention by 82%. And apparently, 88% of organizations don’t onboard well – across all industries. Cannabis likely wasn’t even included in these findings. 

High-growth stores have higher turnover rates than slower growing companies. Stores maintaining a 20-40% growth rate retain more mid-length employees (60-120 days) than high-growth locations. Retailers exceeding a 40% rate of growth see more employees leave within the 60 day mark. 

What I’m thinking 🧠

The cannabis industry is hard, but there are not a lack of interested, qualified parties. Employees are willing to work with its difficulties if proper support systems are in place, like training, solid benefits, time off to recover from high periods of growth, good pay that increases with time, etc. 

Headset concludes that retail operators are most likely spending too much time managing their employees in one of their reports – especially if half of your staff leaves within the next year. 

We have a lot of data on retail employees, but I’d love to see more insights into employee turnover in other verticals. My guess is that ancillary cannabis companies see the least amount of turnover of any sector in this space.

Ancillary businesses don’t have the same restrictions as plant-touching companies and that means a lot of things. Some companies are public, so funds are more available and employees can be paid better, leading to less turnover. Maybe The Green Paper can conduct a survey here – what do y’all think? 🤔

High-growth stores have higher turnover rates than slower growing companies. Stores maintaining a 20-40% growth rate retain more mid-length employees (60-120 days) than high-growth locations. Retailers exceeding a 40% rate of growth see more employees leave within the 60 day mark. 

In my case, I’m able to work from home, I have a great salary & benefits, and strong company culture as an ancillary worker. I don’t technically work for a cannabis company, I work for a media company. This allows me the best of both worlds, but I’ve seen plant-touching employees’ struggles firsthand (they are NOT pretty) because my husband is a cultivator. 

Recruiters should be honest about the expectations and realities of this industry – thankfully I know plenty who are! Employers also need to give a realistic preview of what the job entails during the interviewing process. 

Some companies are desperate for workers, which is understandable, but you always want to attract the right talent. It will make things easier for you in the long run. Those are the people who help build your company and take it to the next level. 

Retailers: don’t neglect your onboarding and new hire training. Employees should have a clear and detailed understanding of the role, as well as materials to expand their personal and career development. Providing additional materials that go beyond the scope of the role, like a time management workbook, can make a huge difference in retaining & developing long-term talent. 

Top selling budtenders are most likely to stay, which makes sense. Partnering with your top performers to create a selling strategy that’s approachable to new hires is one way to beef up your training and development programs. It also gives some of your best employees the chance to contribute to the long-term growth of your store. 

Cannabis operators are under a lot of pressure. But, it’s critical to invest in your employee’s training and development for a long-term, sustainable operation.