Navigating The Cannabis Industry’s Unique Concerns
Michael Vandervort, Danine Clay & Amber Glesener.

Michael Vandervort: [00:00:20]

Good afternoon, everyone. This is Michael Vandervort. It’s May 22nd and we are recording an audio-only version of The Left of Boom show. I have a couple of my colleagues at LRI here with me today. I’d like to welcome Danine Clay and Amber Glesener. How are you guys doing today?

Danine Clay: [00:00:38]

Doing very well, Michael. How about you?

Michael Vandervort: [00:00:40]

I, as you know, had that little bit of work done on my hand yesterday and it’s still tender, but I’m fine. I’m able to run a mouse, at least for a few hours so I can keep working. I’m doing well. For those folks that are listening, why don’t you why don’t we start with you, Danine, and just real quickly tell folks who you are and what you do?

Danine Clay: [00:01:03]

Sure. So, my name is Danine Clay, and I am the relatively still new chief of staff here at LRI. I joined LRI at their home base at the end of September. Prior to that, I did some consulting work as one of their persuader consultants educators. And so, I’ve known LRI for years, but just came to work with them full time relatively recently. I basically do anything and everything to free up some of Phil’s life so that he can focus on getting out, doing more podcasts, doing more marketing, and meeting more clients. So, I am technically his right hand. Although there are many of us that hold his other hands as well. And so, my job is just to make everyone’s life a little bit easier.

Michael Vandervort: [00:01:57]

Awesome. Amber?

Amber Glesener: [00:01:59]

Hi, I’m Amber Glesener. I’m one of the labor relations consultants, educators, however you want to describe it. I’ve been with LRI for about a year and a half now. My background is different from a lot of other people who get the opportunity to consult for LRI. My background is actually in the military, and I’ll talk about that a little bit, I think, today and how that’s been transferable. But I’m actually in Oklahoma right now, so it’s great to be here. Great to see you guys in real-time. Yeah, I’m excited to get going.

Michael Vandervort: [00:02:35]

Awesome. So, we’re going to talk about something that’s a little different. We have been doing a lot of work in terms of what we do at LRI, reporting on industry trends and a lot of that kind of stuff, and we’ve been trying to ramp up the content that we bring to folks around what are hot topics in labor relations. One of those that’s been developing for a while and has really been hot that we thought we wanted to touch on today was a little bit around the growing labor relations trends in the cannabis industry.

[00:03:13]

And so, Denine and Amber had done some work at different times in the past in that area. They are not industry experts by any means but they have had their hands in dealing with folks in that area. And so, I thought we would run through a series of questions. Just feel free to make this conversation. We’ll talk around. The first question, I guess, or to get us started is, let’s talk about having a looming declassification or a change of status in the with the marijuana is like a schedule one drug, I believe, and they’re talking about dropping it down.

[00:03:56]

And because it’s a Schedule One drug, it’s legal in states, but it’s still technically illegal under federal government laws. And none of this is super directly relevant to what we want to talk about but it sets the stage. There’s a lot of complexity to being in this business, and there are a lot of different government regulations at the state, local, federal layer. They can’t accept cash. And so, there’s a lot of weird things that the businesses have to contend with.

[00:04:26]

And by extension, that means that the employees have to contend with and people who work in the industry. And so, it creates, I think, some unique challenges. So, why don’t we start there? And I’ll go to you first, Amber. What unique challenges have you encountered while working in the cannabis industry as compared to some of the others that you’ve touched in your time?

Amber Glesener: [00:04:50]

Yeah. So, I think you teed it up really well and that it’s so new and ever-changing, that every issue that is brought is new and there’s no guideline on where they’re going or how they’re going to get to where they want to be. Something that I think is a unique challenge, but also an asset to the industry is how culturally diverse they are. Not just with age, race, gender, sexuality, gender identity, you name it. But it presents a different leveled issue in terms of the relations piece because it’s so diverse when we come into those environments.

[00:05:28]

A lot of times, the issues are hard to pinpoint because they’re so varied amongst the group of employees that work there. An 18-year-old fresh out of high school who just loves the idea of weed is a very different employee than someone who might have been cultivating in their home for the past 30 years, and they’ve joined this industry because they have a true passion for the medicinal aspect of it, which is another layered, unique trend within cannabis. A lot of them believe that because it is medicinal, they should be paid accordingly as comparable to maybe someone who works in medicine.

[00:06:08]

And that was a challenge that I didn’t expect because that’s a great argument. If they work on the medical side of the company or whatever should they be offered separate amenities because of that? Should they have a difference in pay? And that was a challenge that was something that I didn’t expect to see until we were in it. That’s probably the biggest one that I would say.

Michael Vandervort: [00:06:35]

Interesting. Danine, from a client perspective, what kind of challenges do you hear about or what has come to your attention? Leadership issues? Others?

Danine Clay: [00:06:46]

I would say one of the biggest challenges is actually the misconception about the industry, that it’s such a big moneymaker. I think things will be changing with the new regulations that are coming forward. But right now, because of the regulations, there are a lot of financial constraints on the industry. And so, many of the individuals who are trying to become employees within the cannabis industry expect to be getting paid very high wages when honestly, the company can’t afford that. And it’s very hard to overcome the misconception that it is big money. And I think that is a challenge that every cannabis client that I’ve encountered has come up against.

Amber Glesener: [00:07:33]

I think if I could add to that really quickly, Danine, that to me ties into that cultural aspect. They have a dichotomy almost of cannabis in itself, again, medicinal healing. It Invites a certain type of person into that environment. And on the second hand, it is a money-generating machine. And a lot of times employees have a hard time understanding or separating that just because the practice itself is healing and it invites a certain type of person. We still are a business that needs to make money, so you need to perform to help us get there. And that was, again, that cultural aspect that was really hard to navigate in the actual workplace from a consultant standpoint.

Michael Vandervort: [00:08:21]

Danine, you’ve been doing some of this work for a while longer than Amber, but just experientially having dealt with other clients and other industries, what was useful coming into the cannabis industry? Was there anything new that you had to learn that you never expected to deal with or whatever?

Danine Clay: [00:08:50]

Yes. The whole industry was new. You had to learn the retail side versus the cultivation side. And it’s a brand-new world. For example, I didn’t recognize how much science is behind the actual cultivation end of things. And it’s absolutely fascinating when you have the opportunity to tour and be engaged with the individuals that are actually growing this and the different smells, the different types, the different all of it. So, that is very, very different and there’s nothing comparable.

[00:09:23]

But one of the things I think that was helpful to bring to the cannabis industry is many individuals see cannabis more as a retail type of industry. And so, there aren’t necessarily job progression steps in place to address the needs of the employees. And so, one of the things that I think both Amber and I have focused a great deal on is introducing that to the industry that you need to look at where are they going to go from the moment they come in, say, as a retail worker, how can they progress within the company, and what is your track for that?

[00:10:03]

How are you going to provide that professional development that your employees need? And I think that’s another key piece that you can bring from other industries into cannabis that current initially wasn’t there.

Michael Vandervort: [00:10:16]

It’s really interesting too, because in big formal retail, whether you’re talking about a retail store that sells clothes and hardware or you’re talking a retail store that sells groceries, there’s a very defined to your point. There are very defined career paths. There are very defined career ladders. There’s often the ability to move over into other parts of the industry. You can go from a grocery store clerk job into a corporate job or that kind of stuff.

[00:10:43]

With the cannabis industry, it’s almost like it’s two distinct worlds. I’ve not worked in it, but just observing it. There’s to your point Danine, the retail side, and then there’s this whole other technical aspect of cultivating the plants. And then there’s also some traditional. And I don’t know exactly how these folks’ interface with the companies, but there’s farm worker type people that actually pick and do work on the plants. Not the cultivators, not the people who are doing the breeding of the plants, but they’re actually prepping and collecting the product and getting it ready. And that’s a lot of different varieties of employees to deal with in your ecosystem. So, where does that like, where does that cause stress and that sort of thing?

Danine Clay: [00:11:44]

Amber, do you want to take that one?

Amber Glesener: [00:11:46]

Sure. I think one thing that was interesting for Danine and me initially once we started learning the lay of the difference between retail and cultivation, within cultivation, there’s an agriculture piece as well as a production piece. And a lot of times those two teams don’t need to talk. They’re two completely different workplaces. And they like it that way. They like that they’re set in their routine and their specialty. Whereas in retail, we’ve found that they crave more of a whole experience.

[00:12:25]

So, the complaints or the issues that come up are completely different on either side between retail and cultivation, just given the dynamics of how that facility needs to run. And even so, with that, the qualification level on cultivation is completely different leadership-wise than qualification on retail. Because retail grew so rapidly, rapidly there, with that comes understaffing, and people get thrown into leadership positions. And as a company grows, they don’t have plans in place on how to train these leaders. There’s not time, right? We’re playing catch-up most of the time.

[00:13:04]

Whereas on cultivation, there’s so much red tape, the place won’t open until those lines are drawn and the system’s ready to run. So, that’s another really interesting part of the two worlds is that they’re so very different.

Michael Vandervort: [00:13:20]

Yeah. And I guess also to your point, Amber, you have the retail dispensaries, the retail stores. Dispensaries or stores, depending on which jurisdiction and whether it’s medicinal or completely legal. It varies all over. And then you have like the grow facilities. And then, I don’t know. I don’t know if they do all that cultivation work there in the grow facilities. Do they have a research lab somewhere or something, or is that not anything you’ve seen?

Danine Clay: [00:13:53]

It depends. Honestly, it varies from state to state. Okay. Because different states have different regulations. Some have specific parameters as far as how far or geographically a grow facility can be from a retail facility, other states do not. And so, it just depends. But even if they’re located physically in the same location, the culture as Amber mentioned, it’s very different between those considered more in an agricultural type of role and those in the production role.

Michael Vandervort: [00:14:29]

Interesting. So, as it comes to, I guess, consulting with these companies, like you said, you introduced some new ideas. We saw someone speak from the industry at a conference that we were at recently. So, it’s like one of the things is almost everything is new and a lot of it is unwritten. And these are not Fortune 50 companies or Fortune 100 companies. But these are not small enterprises either, right? It’s rather complex. So, how are they growing themselves out of that hole? It sounds like they’re building a plane while they’re trying to catch the flight.

Danine Clay: [00:15:14]

They are.

Amber Glesener: [00:15:15]

That’s spot on. I think for Danine and I, (and she can probably elaborate on this more from the position she’s in), we have tried to shift where we can be helpful into that operational piece because at the end of the day, we can go to a million sites and tell you all the issues that you have but until you have the resource and time to implement what we’re telling you, you’re just going to keep hearing the same thing over and over. So, trying to go back to the drawing board and let them know this is what we’re seeing but now let’s move towards solutions as opposed to just again, keeping beating a dead horse about all the operational issues that they already know. So, helping at maybe a higher level.

Danine Clay: [00:16:04]

And another important piece is communication. Because of the diversity that exists from state to state, whether it’s legal or not, legal or from if you’re looking at the actual employees, the diversity that exists there, communication usually is the key, honestly. And it’s usually honestly not sufficient. And that is the foundation of many of their problems.

Michael Vandervort: [00:16:33]

In the beginning of some of these things, it felt like smaller people, like it was individuals trying to start a weed shop, if you will maybe, or grow their own and expand so they could sell it in. And I don’t know if that ever was really a thing or if it was just one of the quirky startup stories as this industry started to grow a few years ago. Now, it seems to me that the companies that are in it are a lot bigger. They’re operating across multiple states and that kind of thing.

[00:17:10]

These aren’t people that are working out of their garage or their backyard. They have corporate offices and money behind them and all that kind of stuff. But they still have to build the plane before it can take off. Where are their challenges? I may be asking the same question over again. I don’t know. Where are their challenges as they try to bring all these complicated pieces together? For example, here’s an external problem. In some states, there have been requirements sort of like a neutrality agreement. In certain jurisdictions, they’ve said you can get a store or you can open your business. But if any union comes along and your employees want to work with the union, you have to maintain a neutrality stance.

[00:18:00]

Or in some other jurisdictions, similar, but with a little bit different spin, almost like project labor agreements in the construction industry where if you open this store, you have to agree to recognize a union almost simultaneously. So, those are kinds of labor relations, very specific organizing issues that can affect employers, but they don’t deal with that in every state. If they run in Massachusetts and California and Michigan and Oklahoma, they’re dealing with all these regulations differently in each state, right?

Amber Glesener: [00:18:36]

Correct. They’re called labor peace agreements.

Michael Vandervort: [00:18:40]

Labor peace agreements. Yeah.

Amber Glesener: [00:18:42]

And even out of the 25 states where it’s legal recreationally, only 6 or 8 require labor peace agreements, and that doesn’t include the states that incentivize them. Illinois is an example. They incentivize having a labor peace agreement. [unintelligible 00:19:00] a mandate. But what they say is, if you implement it, we’ll expedite your licensing process, for example, as some type of incentive. We’ve dealt with that in some capacity. But again, it just creates this added red tape of how do you get around that? How do you get around that has been the biggest challenge without potentially forfeiting your license if you’re found to have violated it.

Danine Clay: [00:19:37]

And then also making sure that one activity in one state isn’t going to impact your labor peace agreement in another state. So, even though it is state-specific, you have to think about it globally if you’re involved in multiple states. And so, it does present challenges for how these young companies are looking at labor unions or organizing and how they’re addressing it.

Michael Vandervort: [00:20:05]

And just to make it clear, and I probably should have teed off with this at the beginning of the show, but the cannabis industry right now, depending on whose data you read, second or third, in terms of the level of activity around labor unions and activism and that kind of thing, besides retail. It’s a very hot industry from a labor relations perspective right now. And unions have a lot of interest. And it’s not just one union either. There’s a whole bunch of different unions that want to get their hands in the in the pie, right? Which is, I guess, not unexpected, but it’s a little different than the olden days when there was a turf, and if it was retail, it belonged to the UFCW. That’s not the case around the country, right?

Danine Clay: [00:20:52]

No, it is not. Often you will actually find multiple unions going after the same facility. So yes, it is a very hot market right now.

Michael Vandervort: [00:21:02]

And another kind of trend is in the last week or two, there have been at least two [unintelligible 00:21:12] decisions that I’ve seen where organizing has taken place. Elections have been decided, I believe in one. The employees voted to not unionize, and yet the NLRB said that there were unfair labor practices committed. I don’t remember the name of this case. And they basically said we’re going to recognize the Union and force you to bargain anyway.

[00:21:37]

So, employees who said, no thanks, we don’t want one, which is the basic reason for the National Labor Relations Act. One of the primary things it governs is whether employees want to choose to be represented or not. They said, no, thanks. But the board said, well, too bad. We feel your employer violated some laws and so you get a union anyway.

Danine Clay: [00:21:56]

And then add to that, you’re in an industry where it’s very easy to move around. So, if that employee is not happy with the fact that now they have to recognize the union, it’s very easy for them to go down the street to the other dispensary or retail location and apply and get a job there.

Michael Vandervort: [00:22:13]

Yeah. This is also true in the traditional retail world as well. Although. What are some of the misconceptions about the weed industry that I guess maybe … Like you said, there’s high diversity and a lot of different kinds of identities and politics and reasons for being in the industry. But what surprised you as you started talking to folks at all levels of the company?

Danine Clay: [00:22:42]

One of the biggest surprises for me was on the medical side. I didn’t realize how in some locations trained from a psychological standpoint as well as a medical standpoint, individuals have to be in order to address the needs of their clients. And so, I had a very different perspective of the weed industry than the reality of the weed industry. In certain settings, you have to be very educated in order to succeed within this industry. And I didn’t expect that going in.

Michael Vandervort: [00:23:26]

Yeah. What about you Amber? Did you have something there to add?

Amber Glesener: [00:23:31]

No. I probably would echo the education piece. When you tour an actual cultivation location, there are so many steps and so much to know. It’s a profession. And that’s something I didn’t know. I had no clue. So, that was probably my biggest.

Michael Vandervort: [00:23:51]

I think there are a ton of industries where what goes on behind the scenes, unless you get a chance to see it, you don’t appreciate how much complexity there is to bring a loaf of bread to your dinner table, right? A lot of people touch that bread before you ever put butter on it or whatever.

Danine Clay: [00:24:11]

And I think that’s one of the things that the industry has to overcome as well, because a lot of people just think, oh, everybody’s high when they come to work. And that’s not the case. And so, we have to change. And when I say we, I’m talking about people in general have to change the way we look at it because it is medicinal for many people. And I don’t think that society as a whole has embraced that totally yet.

Michael Vandervort: [00:24:37]

Yeah. I think there are a lot of, especially in states where it’s not legal or where it’s only medical, but you don’t participate as a medical marijuana user, it’s still easy to have those common misconceptions. I wanted to switch over and talk about the positive. At LRI what we try to do, our mantra is creating extraordinary workplaces. I’ve talked to enough people in this industry to kind of know there’s all sorts of clever. They provide samples of their products on a regular basis if you want it as a perk. Right. That’s really valuable to some people and not valuable at all to others, I suppose, whether you work in the industry or not.

[00:25:24]

What are they doing to make themselves employers of choice and attract these unique skills and stuff? What are some of the companies that you’ve seen set themselves up to be an extraordinary workplace?

Amber Glesener: [00:25:41]

I think aside from the obvious free product, what I’ve taken away is they put a big onus on mental health. Some companies offer actual legitimate mental health assistance resources for employees. There’s space for them to say, “Hey, I need a day. I’m a little overwhelmed.” And that’s not something that I’ve seen that’s been transferrable to a lot of other industries. So, I thought that was great. Especially an industry that advocates mental health based on the products that they provide medically. To actually practice that was something that I would think would be attractive to most people.

Michael Vandervort: [00:26:26]

Well, yeah. I just don’t know what you do with your monthly weed allotment.

Danine Clay: [00:26:36]

Use it.

Michael Vandervort: [00:26:37]

Yeah. Use it. Give it to friends. It’s just one of those things when you hear it. I spent 35 years as a practitioner in HR, and we did drug tests. And if you failed a pot test, we couldn’t employ you. Now, it’s a whole different world. It’s really funny to me.

Danine Clay: [00:26:58]

And another thing they do is test the product. They see whether or not it is something that their employees like before they transfer it to the client.

Michael Vandervort: [00:27:06]

Yeah. That’s no different than other things. Try this. Here’s how it makes you feel. Here’s an education on what this experience was like so that you can tell your customers who ask questions. So, what else do they do? What are they doing right now or is it emphasis on leadership and leadership and development? Is it on policy implementation? Is it everything all at once?

Danine Clay: [00:27:35]

Unfortunately, more focus on just trying to survive and thrive. I think until regulation is actually passed to make it a little bit easier to exist as a business, many of them are literally just struggling to do the day-to-day, and most of the extra funds that they do have are going into hiring additional staff for the retail or the cultivation side, and not necessarily for the benefit of the employee. I hate to say it like that, but that’s the reality.

Michael Vandervort: [00:28:10]

Yeah. In a growing essentially somewhat of a startup industry, even though it’s been around for a decade. I don’t remember when Denver went legal. Colorado went legal. It’s been a decade or so, I guess. And I remember hearing a guy when that first legislation first passed at a [unintelligible 00:28:31] large labor firm conferences that they run. The guy that was from whatever firm it was, I’m pretty sure it was [unintelligible 00:28:38], was from Colorado and he was working heavily in the industry.

[00:28:42]

And he said the most astonishing statistic that he had heard in that year was that there were more dispensaries in Colorado than there were Starbucks. And I was like, oh, come on. I don’t know what the number of facilities is on average or whatever. But that just blew my mind although that’s like a decade-old story. Well, let’s lean into wrapping this up. We just wanted to kind of have some high-level discussions. We’ve talked a bit about challenges, we’ve talked a bit about labor peace agreements, some of these unique things. What else is there right now that are particular concerns in the industry that you think we should touch on to wrap things up? Out of out of ideas?

Danine Clay: [00:29:36]

No. Supply and demand. The industry is going to continue to grow. And what is going to happen when some of these regulations are lowered and we have more and more facilities? Are we going to have too many facilities? What’s going to happen basically? On top of that, how can we ensure that the wages that are provided to our retail employees are sufficient to accommodate their living basically? And so, that’s another challenge. And then also as we continue to see more and more union activity, how are these companies going to survive? I don’t think anyone has that answer right now.

Michael Vandervort: [00:30:33]

Yeah. So, it seems to me there are a couple of others. If this reclassification takes place, to your point Danine, from a minute ago, it’s going to create some stability for them that they haven’t had. And it’s going to create a new economic … Not necessarily generating new money or whatever, but it’s going to give them access to banking, which they’ve struggled at. I don’t even know what that would be like. It has to be hugely complicated. I don’t know how they do payroll. And I’m not asking you to answer that question. That’s a rhetorical one.

[00:31:07]

How do you do payroll when you can’t go to a bank? There has to be a way. Anyway, there’s that. And then I think, too, once the stability comes in (and I know there’s been a ton of like, venture capital money poured in where people wanted to get in), but I think you’ll see even more money come in behind, because once this business is stable, then more traditional businesses will move into it, instead of just the VC people and the edgy entrepreneurs that’ll probably offer some combination of more money, more efficiency being looked for, which to your point might mean less stores or whatever.

[00:31:47]

That’s going to continue to drive these underlying employee unrest issues though. So, probably at least, you know, from my 50,000-foot view, not a lot of hope that they’re going to see any relaxation in terms of interest from labor unions and that sort of thing. Do you do you see anything different in that perspective?

Amber Glesener: [00:32:11]

No, not at all.

Danine Clay: [00:32:13]

Thanks for having us, Michael.

Michael Vandervort: [00:32:14]

Yeah. Thanks for coming on. It’s the first time we’ve had internal guests on one of our shows outside of Phil and me, so That’s fun. It’s nice to hear voices that are familiar and talk to people that we work with on the regular. So, thanks for doing this. And we will go ahead and say goodbye. And I hope everybody who listens, if you have any questions or want any more information, you can always reach out to LRI, and Danine or Amber will be happy to share any expertise they may have.