What Interstate Commerce Could Mean for Employers

Cannabis legalization is continuing to spread across the country. Five new states joined the list in 2020; every ballot measure seeking to expand medical or recreational legalization passing with large margins. As this inevitable march continues with strong support throughout the United States, legalizing cannabis on a federal level becomes increasingly likely in the next one to two years. What could evolving legislation at the federal level mean for cannabis companies and how they do business?

The first step toward federal legalization likely will be de-scheduling, meaning removing it from the Controlled Substances Act as a Schedule I drug. We believe this effort could begin in earnest sometime in 2021. De-scheduling will lead to dramatic changes in the overall business climate, including:

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  • Major reductions in federal taxes stemming from elimination of Internal Revenue Code Section 280E, which disallows most standard deductions for cannabis businesses.
  • Much improved access to federally regulated banks and financial institutions.
  • Opportunity to begin the transition to an interstate commerce model.

Reduction in federal taxes and access to the banking system resulting from de-scheduling will make it much easier for entrepreneurs to start businesses in the cannabis space and generate much-needed profits in the first few years of operation. Lack of access to capital was a major inhibitor to growth over the past three years, especially for smaller, “mom-and-pop” businesses. Providing entrepreneurs access to the trillions of dollars in the U.S. banking system should allow an entirely new class of businesses to emerge. The new flow of cash, coupled with more than 1,000 new state licenses expected to be issued in 2021 alone, will lead to a spike in jobs across all industry verticals.

The potential for interstate commerce likely will lag a bit behind de-scheduling and banking reforms, given the complexities of the Constitution’s commerce clause and state laws that will have to be addressed. It is my prediction that in the next five years we will see full-scale interstate commerce no different from the beer, wine, and pharmaceutical industries.

When de-scheduling happens—bolstered by state-by-state expansion—plant-touching roles likely will be in higher demand as the need for greater supply explodes. Cannabis companies will be searching for experienced and knowledgeable cultivation employees—especially as large-scale and multi-location operations continue to expand. People to fill positions ranging from trimmers and growers to agronomists and lighting experts will be highly sought. Executive positions including directors of cultivation can expect salaries and compensation to continue increasing as companies search for qualified leaders.

Continued industry consolidation and new capital will lead to increasingly larger extraction facilities, bringing a need for job candidates with experience working at large-scale commercial facilities. Proven skills in extraction technology, equipment maintenance, quality control, and compliance will remain in high demand.

De-scheduling likely won’t lessen compliance and testing requirements; in many instances, removing cannabis from Schedule I probably will increase regulations (i.e., in newly legal markets where the black market previously dominated). In such cases, skilled laboratory technicians, analytical chemists, and scientists will continue to be highly sought-after.

In 2020, manufactured cannabis products accounted for nearly 40 percent of all U.S. cannabis retail sales. De-scheduling will mean even more manufacturing licenses granted across the country, generating more diverse and specialized job opportunities. Positions ranging from packaging and supply chain to director of operations will remain popular.

While not directly plant-touching, legal and compliance positions, alongside accounting and finance positions, will be in high demand as a plethora of new businesses get off the ground and enter the marketplace.

Building a team of qualified leaders—and keeping them around for the long run—will be more important than ever as the industry continues to evolve. As companies prepare for interstate commerce with the multistate operator “land grab,” finding executives with experience managing people and operations across multiple states will be of increasing importance.

Focus on quality rather than quantity when it comes to hiring and look for candidates who possess the following skills:

Creativity: The best leaders in the cannabis space are creative problem solvers who face challenges head-on. In an increasingly competitive marketplace, it’s more beneficial (and profitable) to be an innovator than a follower.

Adaptability: Hire employees who can be flexible and handle the ups and downs of this ever-changing industry. Rules and regulations change often and will continue to do so, and the ability to pivot and adapt is imperative for success.

Knowledge of the plant: Hiring individuals who are part of your target audience will help you in the long run. Invest in your employees by offering things like competitive compensation packages, stock options, and ongoing education and/or training.

Communication skills: Your team will need to communicate with a variety of people in all verticals of the industry, so the ability to adjust communication style for different audiences will be crucial. Building and maintaining strong relationships is essential.

Based on the rate of growth and support the industry experienced in 2020, federal legalization is on its way. This will change, drastically, how the industry operates and create a surplus of new cannabis jobs in markets across the country.


Liesl-Bernard-CannabizTeam-mg-magazine-mgretailer

Liesl Bernard is founder and chief executive officer at CannabizTeam, an executive search and staffing firm focused specifically on the cannabis industry. Her team has placed thousands of candidates at executive and management levels in all verticals of the cannabis industry across the world. She attributes her success in cannabis to her vast international recruitment experience and deep passion for the industry.

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