In the cannabis industry, we’ve seen some big-time mergers and acquisition (M&A) activity that will most likely continue over the course of the year. And as the industry continues evolving, we’ll continue to see more consolidation of many of the largest cannabis companies. The consistent M&A activity leaves us wondering, is consolidation good for the cannabis industry?
To date, a few of the biggest M&As in cannabis have been Trulieve and Harvest,
Verano and AltMed, and Curaleaf and Grassroots. In March 2022, Cresco and Columbia Care announced their merger, solidifying Cresco as the world’s largest cannabis company in revenue and the largest in the U.S. across key operating metrics.
It’s important to note that we’re not here to discuss the merits and challenges of corporate cannabis. We’re simply looking at a fact-based assessment of the industry-wide impact of multiple cannabis companies with 10,000-plus employees. In this article, we’ll answer these questions:
- What does this mean for the people currently employed in cannabis?
- What does this mean for the cannabis industry as a job-creation engine?
Bigger org charts, more upward mobility
As cannabis companies become bigger than they’ve ever been, the industry will have more roles, jobs, and functions than ever before.
Administrative roles. There’s going to be a bigger variety of roles centralized to support 10,000 employee businesses. Back-office and administrative positions will greatly expand.
Shared services. There will be new roles for shared services on the production and revenue side of the industry – roles that drive standard operating procedures (SOPs) across a network of stores or facilities. Shared services roles may include overlapping disciplines from retail, retail marketing, manufacturing, cultivation, and processing.
More executive roles. Executives and leadership ranks will continue to have new jobs and functions created based on added scope. Some of these roles will have never existed before in legal cannabis – and in some cases, not in other industries. This will provide a lot of opportunities for upward, internal mobility in cannabis. Employees will have more options and opportunities within the cannabis industry.
More middle management roles. A vertically integrated cannabis org chart already has more job types than any industry on the planet. For example, roles related to agriculture, production, consumer packaged goods (CPG), retail, and administration positions may all exist within a single vertically integrated cannabis company. That being said, within those existing lanes, more specialized jobs will be carved out. Supply chain planning and forecasting, human resources, and specialized corporate positions are likely to go across a network of sites or facilities within a single state or across multiple states. There will be more key functional hires who can impact, manage, and lead across various departments within a vertically integrated company.
With the burgeoning industry, there’s a need for continuous improvement of intelligent organizational design. Big companies like Cresco will need an effective organizational strategy and people with specific, functional subject matter expertise. These needs will lead the innovation in defying the many different types of jobs that will exist based on the specific scope of the companies.
High turnover, rapid operationalizing, new leadership
Increase in turnover. At merging companies, there will be an inevitable increase in turnover. People who have been working at these large cannabis companies have the experience and industry domain knowledge that no one else has. And while some employees may be excited to continue working at the largest cannabis company of all time, other employees may prefer working with a smaller company that’s more fast-paced and startup-like. The job market for their innovative talent will be high and they’ll likely be more receptive to other new opportunities.
Just because there is high M&A activity, doesn’t mean smaller companies need to lose employees. Here are some strategies for retaining cannabis talent.
Opportunities for small businesses. As some employees leave larger, more corporate cannabis companies to work at start-up cannabis companies, there’s an opportunity for startups to become more sophisticated more quickly. Smaller, growth stage cannabis companies have the opportunity to bring in top talent – an opportunity that they haven’t had before. We anticipate an acceleration in how quickly smaller companies can operationalize their assets, get facilities up and running, and have a quicker path to profitability.
New executive leadership. Larger companies will attract more executives to the cannabis industry, people who may have never considered cannabis as an option before. Leaders who may have avoided the cannabis industry due to its startup nature may consider cannabis as companies become more corporate. (Here’s how to transition executives into the cannabis industry.)
Consolidation is good for the cannabis industry because it means it’s growing and evolving. These bigger companies will still need massive workforces. What we’re currently witnessing in cannabis is more licenses, more retail locations, and more facilities continuing to open. Even with massive consolidation, cannabis should still be a leading job creator across the country. Cannabis will continue to present economic opportunities and restore middle-class jobs in rural America.
FlowerHire develops strong, efficient organizational strategies for rapidly growing cannabis companies. Build a cannabis team.
For hourly roles, check out FlowerHire X™ powered by engin sciences which uses artificial intelligence to match companies with hourly candidates for increased qualified applicants, increased hiring speed, and decreased time spent. FREE trials are available. View case study.