With More Cannabis Industry Layoffs Likely, What Can You Do To Stay Employed?

With layoffs affecting the national workforce, cannabis staffing leaders forecast that more dismissals are expected in the sector over the next few months.

Layoffs in recent months have included the likes of Aurora Cannabis Inc ACB and Dutchie, among numerous others.

Karson Humiston, founder and CEO of industry staffing firm Vangst, predicts layoffs will trend upward over the next year. With numerous companies operating with less than a year's cash on hand, she said roles can become redundant.

"Many companies will continue to work to extend the little runway they have left, and a way they will do this is by reducing headcount," Humiston said.

Kara Bradford, CEO of Viridian Staffing, expects layoffs for at least a few more months. She noted that critical factors should determine how layoffs affect different state markets, "Including how new or mature they are and how liberal or restrictive a state was in awarding licenses."

Jojo Benge, VP of people and strategy for cannabis workforce management software Wurk, expects layoffs to continue at the same rate, citing an August 2022 PwC report noting that 50% of companies expect to reduce labor in the next six to 12 months.

"While there may be a smaller scale of layoffs, it will probably stay consistent till mid-winter, end of spring," said Benge.

James Yagielo, CEO of staffing firm HempStaff, did offer a minor silver lining, noting that company data indicates that layoffs have become less frequent in recent months.

"At this point, I think every cannabis company has heard of the 'cannabis recession' and has taken appropriate measures," he said.

Who's Most Vulnerable? Is Anyone Safe?

Most working in the cannabis sector could face layoffs if their company fails to perform. The chances grow greater if outside funding is in play.

Humiston elaborated, "Any cannabis business that is not profitable and relying on additional outside capital to fund their business is highly vulnerable to layoffs."

She added, "Businesses with the strongest balance sheets are always the safest, but nothing is guaranteed."

Higher earners in management may be at a higher risk of job loss, said Yagielo.

"When a company can save $10K or more by hiring the assistant to be the new manager, and they need to cut costs, the upper-level managers are usually the first to go," he said.

On the other hand, HempStaff has not seen many layoffs in lab workers.

"The employees there are generally more skilled with college degrees...making them harder to find," Yagielo said.

Viridian's Bradford said several factors, ranging from sales to market maturity, could indicate the likely most impacted markets.

She reports that states suffering from overproduction are seeing losses in the cultivation space, but retail remains steady. More mature markets with stagnant or declining sales are seeing layoffs across the board.

"If the broader US economy is entering a recession, more mature markets, like Colorado, are likely to see the greatest number of layoffs," predicted Bradford. On the other hand, "Newly legalized markets, which are still rapidly expanding, are the least likely to be negatively impacted." 

Bradford said middle management is often vulnerable, "But revenue-generating employees and those responsible for essential, day-to-day functions, like accounting, tend to be the safest."

How To Brace For Possible Layoffs

Staffing experts agree that the best way to keep a job is by being one of the best team members.

More specifically, Bradford encourages employees to "Do their job so well and be such a positive addition to the company culture that they are likely to be the last person their manager would dream of letting go of."

With "quiet quitting" the new buzz term in the workplace, going above and beyond may help retain jobs, whether one agrees with the concept or not.

"It's always wise to show you can do more than just the role you were hired for," said Wurk's Benge. He suggests that employees volunteer for projects to learn new skills and communicate with managers and teammates.

Companies expecting layoffs may prepare by working with staffing firms. Humiston says clients "rely heavily" on the company's GIGS on-demand employee program. Most roles on the platform center on cultivation, manufacturing and retail.

Bradford said employees might want to get proactive and reach out to staffing firms if they sense an impending job loss. She cautions a "quiet" search until any layoffs are made official.

"They don't want to advertise that they're looking for a new job, otherwise their current employer will have even greater reason to let them go if cuts need to be made."

Photo by Ron Lach

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Posted In: CannabisNewsPenny StocksSmall CapExclusivesMarketsInterviewHempStaffJames Yagielojob lossJojo BengeKara BradfordKarson HumistonlaborLayoffsPwCVangstViridian StaffingWurk
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