But in the rush to expand operations, some blind spots in employment and workplace compliance can be hard to manage for a rapidly growing company. It’s important to note that these blind spots are entirely distinct departments in many organizations. So when one or two people within a rapidly scaling cannabis company are suddenly managing everything at once, it can be easy to lose track of details (and become stressed out in the process).
Believe me, I know: I spent more than 15 years in plant-touching businesses and felt firsthand the growing pains of scaling up. Here’s what I’ve learned about five critical blind spots and how they can impact the trajectory of your business expansion.
1) Hiring
Hiring is often one of the most time-consuming, resource-intensive activities a business undertakes. Considering it takes about 40 days (and many thousands of dollars) to hire a full-time employee, waiting to hire until you’re already short-staffed will only exacerbate the problem.
Seasonal hires, like trimmers during harvest season or holiday hires in the manufacturing, distribution and fulfillment spaces, are a little easier to plan for, but it’s important to account for time-intensive training required to get new employees up to speed.
In a challenging labor market, attracting the right candidates at the right time can be difficult. And because of current hiring and staffing issues plaguing all industries, including cannabis, it’s essential to have a well-thought-out plan. The time is now to be proactive, not reactive.
2) Workplace Regulatory Compliance
Speaking of seasonal workers: I can’t stress enough how important it is to adhere to labor laws for temp and contract workers. If you follow the rules, you’ll avoid onerous regulatory oversight and significant fines, so it’s in your best interests to understand federal, state and local labor laws to ensure you remain compliant across your workforce.
For example, misclassifying nonexempt workers as exempt to save on taxes may seem harmless, but the resulting fines from even an inadvertent misclassification can devastate your company’s bottom line.
There’s also the workplace environment to consider. Rural cultivation facilities, for instance, need to provide adequate access to toilets, hand-washing facilities and drinking water for workers, or risk sanctions. As regulatory oversight continues to ramp up, I anticipate increased scrutiny on just about everything—down to the number of hand-washing stations available to workers.
And bear in mind that workplace regulations change frequently at the local, state and federal levels. Most businesses don’t intentionally violate such regulations, but they sometimes make mistakes because it’s simply too overwhelming to understand each and every regulation, how it pertains to their businesses and if they need to make any adjustments. That’s why it’s so essential to stay on top of policy updates or work with an adviser who can keep you up to date.
3) Efficient Payroll
Honoring your promises and paying employees on time is key to avoiding costly turnover, especially as you’re scaling. A cheap but clunky payroll system may be acceptable in the early days of operation, but if it creates problems or doesn’t efficiently scale, it can waste significant time and resources as your business grows.
Payroll is much more involved than simply cutting a check or counting out cash for hours worked. The process requires gathering and maintaining accurate employee tax information, having an efficient timekeeping system, tracking sick days and vacation, and auditing payroll.
Find a system that can grow with you and manage your business’s complexities and diverse workforce without a lot of oversight from your operations team. Another option is to turn to a payroll service partner, which can significantly ease the burden of managing payroll internally.
4) Human Resources
Having thoughtful, detailed HR policies and processes is important for legal reasons, employee morale and so much more. During rapid scaling, you may hire more frequently or deal with an increasingly large staff, which makes having clear and consistent policies even more critical. But you may not have a fully established HR function when you begin to scale. Being prepared to bring on an HR expert or external partner can ultimately save you time, money and headaches.
And remember that hiring employees is just one aspect of human resources. HR professionals offer expertise on a broad range of workplace issues, such as compliance, unemployment, workers’ compensation, benefits administration, training, employee engagement and more. Investing in the HR function will bring you long-term benefits.
5) Professional Presence
If you’re scaling rapidly, you’re likely attracting (or hoping to attract) the attention of private venture capital and other funding sources. You’ll need to know how to navigate the investment landscape, and part of that process is establishing a professional presence.
If you’re not sure where to focus your attention, an outside perspective can be a big help—get an honest brand evaluation and really drill into developing your brand’s identity and “North Star.” What’s your primary function? For whom? What are your unique value propositions? Laying the foundation in this way creates a clear path for further growth and development.
For example, an up-to-date, user-friendly website can set you apart and build trust and confidence with investors and other stakeholders. You’ll also want to consider what types of marketing will best help you grow your business in an increasingly competitive (and increasingly sophisticated) environment.
Getting in Front of the Rush
These five blind spots are challenges in even the most stable, predictable of circumstances. Add rapid scaling in the ever-expanding green rush, and paying attention to these blind spots can mean the difference between success and getting edged out by even slightly more prepared competitors.
I urge you to attend conferences, workgroups and webinars to learn about regulatory developments and current industry trends. Consider tapping into the expertise of external business partners who can manage critical functions as you ramp up. Cannabis is breaking new ground every day, which makes it critical to safeguard your business interests so you can remain compliant, scale sustainably and thrive.
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