August 2018

1. Avoid Layoffs Downsizing in new markets could leave you understaffed once the market stabilizes. Job cuts can cost your busi- ness more in the long run. That’s why it’s better business to pay employees to take a day off than it is to lay off or rehire and retrain an employee, industry executives agreed. “Avoiding layoffs is really important, especially in Hawaii, where our unem- ployment rate is so low,” said Helen Cho, director of integrated strategy at Hono- lulu’s vertically integrated Aloha Green Apothecary. “If you let employees go, they won’t be back. And, if you lay them off and eventually have to hire them back or hire new employees and train them, your initial investment goes out the window.” Aloha Green avoided layoffs during multiple market delays by encouraging employees to take longer vacations or unpaid leave, Cho said. Scheduling was critical too, Cho said. You don’t want your team to be too strapped or your operation overstaffed while you’re navigating market delays. You should be lean without overextend- ing your team and know how much your staff can do before you need to hire new talent, she said. “You don’t want to have too many people on board and not enough for them to do,” she said. To avoid layoffs, you must be creative and put employees to work on projects that support long-term strategy when day-to-day tasks are scarce, said Keenan Hollister, co-owner of Pakalolo Supply Co., a vertically integrated business in Fairbanks, Alaska. Pakalolo’s employees helped in the cultivation facility, which was a former food-distribution warehouse. Before opening Pakalolo’s retail shop, employees converted a walk- in freezer to a flower room. After the dispensary opened, they spent mornings converting another walk-in freezer to a second flower room and packaged product before the store opened at 3 p.m. “We cared so much about making this a real industry and not harming the optics of the industry that we worked very hard to not lay off our employees,” Hollister said. 2. Invest in Education Cutting employees’ hours during market delays is also risky and dimin- ishes morale. “You have to be more creative than that,” Solevo’s Gullickson said. “To risk losing staff at that stage in the game is not something I’d ever really recom- mend. …These aren’t $100,000- or $200,000-a-year employees. A lot of investors have other companies, but (for $15-, $20- or $22-an-hour employees), this job is very important to them.” Rather than trim hours or lay off employees during delays in Pennsylva- nia, Solevo paid them to attend events and develop relationships with members of the community. “We wanted to bring this back to a very normal business activity, which is talking about what you’re doing in the community,” Gullickson said. “Time is best spent educating the community.” Solevo paid its employees to partici- pate in educational events with experts on autism, cancer, HIV and other EXECUTIVE SUMMARY Regulations and product shortages lead to slowdowns and shutdowns among growers and retailers in newly regulated cannabis markets. How do you retain talent during delays? Experts in Alaska, Hawaii and Pennsylvania shared these tips: • Avoid layoffs and cutting hours; instead, pay employees to work on projects that support long- term strategy and operations (think cultivation, renovation and consumer education). • Scale your initial hiring appropriately; then, cross-train employees and make promotions internally so talent sees room for growth. • Ration product and don’t offer deep discounts in markets where supply could be scarce; it keeps product on shelves, retail doors open and employees paid. • Be transparent in the hiring process and set reasonable expectations for regulatory delays, testing logjams or supply shortages so employees aren’t blindsided by market challenges. “Your employees are your front line,” said Sara Gullickson, center, flanked by Solevo Wellness employees. “They’re the number-one reason [consumers] come back. If you’re not investing in them, you’re not investing in your facility.” Photo courtesy of Solevo Wellness 78 • Marijuana Business Magazine • August 2018