Marijuana Business Magazine April 2020

Marijuana Business Magazine | April 2020 40 Salaries continue to be most cannabis companies’ biggest expense. But increased pressures to control costs are forcing executives to find not just the right people, but talent at the right price. For executives, that means constructing compensation packages that strike the right balance of base pay, equity, bonuses, benefits and culture to win a desirable candidate. Here are some factors to consider: • Businesses must construct offers that appeal to the individual needs of desirable executives. But, in general, candidates should understand that cannabis companies are young and may have to offer more equity versus base pay than more established industries. • Because cannabis stocks have taken a hit, candidates are leery of equity as compensation. • Investors are less likely to invest in cannabis companies where salaries appear inflated. • While finding talent from big, brand-name companies seems appealing, startup experience also is a good fit in the cannabis industry. • Hemp experience is still a hot commodity—and salaries in that industry are still high, thanks to the federal legalization of hemp cultivation. • Recruiters have differing opinions about what positions are most in demand, but they agree that hiring and firing will be determined by a company’s strength or weakness. T he marijuana industry has grown large enough to attract the attention of mainstream managers and executives when cannabis recruiters call. “I have yet to have someone say, ‘I couldn’t work in cannabis.’ That threshold is crossed within the first 10 seconds,” said Ed Schmults, former CEO of the FAO Schwarz toy company and current CEO of Calyx Peak, a Massachusetts-based multistate marijuana operator. Scott Wells, chief people officer at Chicago-based multistate operator Cresco Labs, agreed. “I’d say less than 5% of the time, people respond and say, ‘Cannabis is too risky; I’m not interested,’” said Wells, who has held senior HR positions at financial services firm Aon and management consultancy The Novo Group. While the stigma of marijuana is no longer a major barrier to recruiting, finding the right executives and manag- ers is still a challenge. Growing cannabis companies must identify the skill sets executives will need to navigate their phase of growth. Is it a newly cash-positive company just exiting the startup phase, a small- to medium-sized company or something bigger? Whatever phase the company is in, it might be necessary to look outside the cannabis sector for talent—and that can mean competing against mainstream businesses and other cannabis companies for top leadership. And although companies are more cautious now with “The fervor of 2017-18 has calmed down a little bit, but companies are going to grow very strategically and be focused on upgrading their talent as they continue to grow.” –Liesl Bernard CEO of CannabizTeam COMPENSATION CONTEMPLATION