Labor Challenges a Hindrance to Cannabis Market Growth

The professionals the cannabis industry needs for its continued success are out there and willing to help it properly mature, but uncertain legal issues surrounding cannabis/hemp, especially on the federal level, most likely are keeping some away, for now. Some of these individuals are found in states not recognizing either medical or adult-use cannabis. Others are hesitant to move into the industry because it is not federally legal or due to how the banking system treats cannabis, says Todd Downing of Best Human Capital and Advisory Group. In addition to the banking problem, other significant challenges unique to the cannabis industry keep things interesting on the labor front.

“Many states with regulated markets still bar people with cannabis convictions from working in the industry, which makes it especially difficult for people from historically over-policed communities to participate in the opportunities being created every day,” says Morgan Fox, Communications Director for the National Cannabis Industry Association.

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Fox points out that federal immigration laws are also a problem, saying that individuals from other countries can be banned from entering the U.S. if they are working in the legal cannabis industry, and employment in the industry is considered a mark of “low moral character” in citizenship applications.

Payroll, insurance, benefits, and workers’ comp are all made more difficult in the cannabis business because of federal prohibition. In addition, the cannabis sector generally pays pretty well comparatively, but the fact that businesses don’t have access to banking, can’t deduct expenses on federal taxes, and face a number of financial burdens at the state level make it a challenge for them to employ as many people as they could in a more reasonable regulatory environment, Fox says. These same factors make it difficult for the legal industry to displace the illicit market, as well.

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