by Caela Bintner, Faces Human Capital Management

It’s no secret that employment demands for the legal cannabis industry have soared in recent years. According to Marijuana Business Daily’s 2016 Marijuana Business Factbook, cannabis-related companies in the U.S. are now employing between 100,000 and 150,000 workers.

That data, if correct, means that legal marijuana companies in the United States are currently employing around the same number of people as there are librarians, web developers, data administrators, or flight attendants.

But the dramatic need to fill cannabis-related positions has also created some major issues for legal cannabis companies when it comes to their hiring practices. A lot of these mistakes can be found in any start-up company – but given the “Wild West” nature of the legal marijuana industry and its outlaw roots, there are also some unique HR issues.

We’ve boiled these issues down into a list: The Top 5 HR Mistakes that Cannabis Companies Make.

Poor Job Descriptions by Employers
As mentioned, many of the people now running cannabis companies don’t come from a traditional corporate background, so they’re not aware of how important a thorough and detailed job description can be.

A lot of these employers are also stuck in a start-up mentality, and haven’t yet made the mental leap when it comes to thinking long-term about who their employees are. And while these bosses are very knowledgeable by necessity when it comes to cannabis compliance and regulations, they’re still not used to explaining their company vision and mission to potential hires.

Verifying Employee Eligibility
Federal law requires that every employer recruiting an individual for employment in the U.S. must have those employees complete an I-9 Employment Eligibility Verification form. The I-9 form helps companies ensure their employees’ identity and their authorization to work in the country.

But while cannabis companies are focused on legal marijuana compliance and regulations issues, this crucial piece of the employment puzzle often falls by the wayside – and that can be disastrous.

Most cannabis companies don’t realize that a missing or improperly filled-out I-9 form can lead to potentially ruinous government penalties if your business comes under a federal audit. We recently saved one of our clients close to $100,000 in fines by doing our own, internal audit of their paperwork and correcting their I-9s.

Fair Labor Standards Act (FLSA) Classifications
The FLSA are the minimum wage, overtime pay, record-keeping and youth employment standards established for employees in both the private and government sectors.

In most mainstream companies FLSA classifications help to establish which jobs should be considered exempt or non-exempt, or whether some positions are eligible for overtime.

These classifications are another important but overlooked issue for cannabis businesses. Part of the problem is because some of the jobs in the legal cannabis sector are still new and employers remain ignorant or uncertain as to how they should be classified.

For example, should the growers who daily tend the cannabis plants be considered exempt, or should that classification be reserved only for the geneticists who develop a company’s unique strains? And who gets overtime?

High Turnover
Part of this issue comes back to the dilemma of poor job descriptions. Employers in the legal cannabis sector might begin by hiring friends they can trust, but soon discover those friends don’t have the skills or commitment needed to stay with their jobs.

As a new industry, cannabis also attracts a lot of millennials – young workers for whom this might be their first “real” job, and who statistically are notorious job-hoppers. Once the novelty of working with marijuana wears off, and if they don’t feel invested in their work and their company, they often get bored and move on – taking their newly acquired skills with them.

Another important issue: hiring people who are comfortable with the rough-and-tumble cannabis culture. Most legal cannabis companies don’t want to have a rigid work environment, but they need to be concerned about potentially litigious issues that could lead to claims of harassment.

Recruiting
As these companies struggle to find the right employees, they’re often not thinking of the best methods to attract and engage potential workers, especially for the long haul. Most cannabis business employers aren’t aware they can offer their employees things like health benefits, direct deposit, and other perks that works at mainstream companies take for granted.

Admittedly the legal cannabis industry faces some very unique challenges as it grows and develops. When you’re working with an all-cash business model, it’s hard to get into the habit of keeping good records and an accurate paper trail. And the current federal prohibitions can put any legal cannabis industry high on the government’s radar when it comes to scrutiny for any possible regulatory slip-ups.

All these issues underscore why it’s very important that legal marijuana companies realize the importance of outsourcing or hiring in-house HR professionals – the people who can ensure their operations run smoothly and remain complaint across a wide variety of everyday workplace issues.

Caela Bintner is Co-Founder and Managing Director of Faces Human Capital Management, based in Denver, Colorado. With over 25 years of sales, Caela has acquired a unique skill set including public relations and marketing experience.

She started her first public relations company in 1996 after she worked for The Bush Administration. She is also a member of Women Grow, the organization created to help women leverage their influence and succeed in the legal cannabis industry.