Why Proper HR Management is Critical for the Cannabis Industry

In 2021 alone, the cannabis industry saw a 33% increase in employment opportunities, marking the fifth year in a row of annual job growth greater than 27%. Now more than ever, HR management is becoming a financial strain for many organizations as they grow. With an ever-expanding industry, you’ll find it can be hard to keep up with administrative duties. Here’s 5 reasons why proper HR management is critical for the cannabis industry.

Why Proper HR Management is Critical for The Cannabis Industry

Do you find yourself to be struggling to increase your HR management while still focusing on the long-term growth of your company? Here’s how outsourced HR management can benefit the cannabis industry.


Working in the cannabis industry, you’re probably already familiar with the heavy regulations that are inevitable for your business. Dealing with strict federal regulations that are constantly changing means being up to date on all the latest compliance requirements. Since many cannabis businesses are still relatively new, it’s common to lack strong HR compliance. Proper HR management can help businesses to stay adjacent with updated federal regulations through the following actions:

  • Following state wage and hour laws
  • Properly classifying all employees and independent contractors
  • Developing an employee handbook that visibly outlines your company’s policies
  • Complying with OSHA regulations for workplace safety

It can be a struggle to comply with the different laws of the cannabis industry, making proper HR management critical.


Since the integration of the cannabis industry, banking has always been tricky to figure out. While many cannabis businesses are legal to operate within states lines, they may find it difficult to work with federal banks or other forms of financing. To save you the headache of filing payroll, many businesses chose to outsource their HR department to ensure they pay their employees legally. Outsourcing your HR department can also help you streamline payroll tax deductions, timekeeping, and other time-consuming tasks.


In your ever-so growing industry, you may find yourself constantly hiring and recruiting new team members. Hiring new employees isn’t cheap, and finding good applicants with formal training can be difficult when dealing with cannabis. When outsourcing your HR department, you’ll find that many agencies assist with:

  • Payroll forms
  • Applicant tracking systems
  • Interview assistance
  • Background checks
  • Offer letters
  • Job ads and descriptions

A well-equipped HR team can streamline the processes of onboarding and hiring, reducing the financial strain on your company.

Employee Retention

Hiring the right employees is the first step to a thriving business, the next step is now to retain them. Losing your best employees can be expensive for your company, the hiring process can be lengthy when it comes to replacing some of your top talent. On the other hand, a strong HR department can help you increase employee retention by giving them a reason to stay at your company. By outsourcing your HR department, you can offer the best benefits at the best rates. Your HR provider will be responsible for handling:

  • Paperless onboarding, benefits enrollment, and payroll setup
  • Performance management, employee training, and reward programs
  • Enticing benefits such as a 401k plan and health benefits
  • Employees surveys or other means for employees to provide feedback

Ongoing Assistance

As a business owner, extending yourself to multiple departments can be an overwhelming task. In a rapidly growing industry, you need ongoing HR assistance to keep up with your administrative functions. When you rely on HR management, you’ll have access to the tools you need to have ongoing assistance so you can stay focusing on your growth and not keeping up with the time-consuming tasks of HR. Set your business up for success with ongoing HR assistance, that way you’ll be ready to expand when the time comes.

Go Back