Does the cannabis industry pay a living wage? Depends who you ask

Through Andrew Ward

Cannabis professionals are divided on whether the industry is paying living wages. With a number of points to consider, opinions are formed through various market metrics. From base pay to living expenses to income statements, sources made arguments for both sides of the argument. As with many other types of cannabis, the answer is far from definitive at this point.

Opinions differ on living wages

Using data and first-hand experience, cannabis staffing companies divided minds when the industry paid a living wage.

Kelsea Appelbaum, vice president of partnerships at Vangst, thinks wages are up to standard. Using company data, she said average hourly wages for positions like budtenders, warehouse workers, extractors, and growers range from $14 to about $30 an hour.

Referring to the company’s 2021 Salary Guide, Applebaum highlighted roles such as lab workers ($16-21 per hour), production technicians ($14-30 per hour), and budtenders ($14-25 per hour plus tips) as examples of the different pay scales.

Liesl Bernard, CEO of temp agency CannabizTeam, cited her company’s annual salary report to conclude that most temp workers were earning above minimum wage.

The company’s report found that salaries in the industry increased by 4% in 2021, with executive salaries up more than 10%.

“Nearly 40% of these workers are also offered a full-time job within the first six months of their job,” said Bernard. She didn’t elaborate on full-time salaries, but reported that most offers included insurance and possibly additional benefits.

Photo by Kindel Media via Pexels

Opposing viewpoints offered no data but anecdotes to help them reach their conclusions.

Danielle Schumacher, co-founder and CEO of THC Staffing Group, believes companies are not raising wages to meet the rising cost of living.

She reported that hourly and wage rates would fall in 2022 as companies replaced higher-paid employees with lower-paid ones.

“I see cannabis companies offering no or fewer benefits than they used to,” Schumacher said, saying that public and ownership-transfer companies would be the most likely to do so.

On the other hand, Appelbaum said an upcoming Vangst white paper using unreleased data from their 2021 report would indicate respondents felt the cannabis benefit packages matched or exceeded their previous non-cannabis position.

According to the report, 20% of respondents felt the benefits in the industry were better than when they were last employed, and 40% felt the benefits were consistent with their previous positions.

In any case, companies should consider whether employees can make ends meet.

Jojo Benje, VP of people and strategy at cannabis payroll and HR platform Wurk, didn’t offer data but reported that employees in production, cultivation and dispensaries aren’t being paid wages that match ongoing inflation concerns.

He warns companies that employees who don’t earn a living wage could turn the company’s progress upside down.

“You can’t run a business without happy people,” said Benje.

Photo by Olena Ruban/Getty Images

Numerous points considered

Market and industry comparisons drove many of the sources’ reasoning.

“While $14 an hour isn’t a living wage in Denver or Los Angeles, it is in other low-wage states,” Vangst’s Applebaum said.

CannabizTeam’s report addressed several factors that affect pay, including company size and candidate experience. Location was also a major factor.

RELATED: Why marijuana companies are laying off workers as the industry grows

The report covered various markets and salary changes over the past year. San Francisco, CA (+64%), Stamford, CT (46.9%) and Washington, DC (40.1%) led the list of industry pay increases.

Springfield, IL (-14.2%), Tulsa, OK (-11.6%) and St. Louis, MO (-9.6%) led to pay cuts during the period.

Nico Pento, Esq. of the company Bianchi & Brandt agreed that the regional cost of living is crucial.

“There’s a common misconception about wages in the cannabis industry that’s perpetuated by groups like the United Food and Commercial Workers International Union and other unions that are trying to exploit the industry while it’s in its infancy,” Pento said .

In September 2021, UFCW International called on federal and state lawmakers to ensure the emerging space creates “quality, better-paying jobs” for employees. The group cited a report by the Economic Policy Institute that estimated unionized cannabis workers could earn between $2,810 and $8,690 more per year than non-union workers.

Photo by Jeremy Poland/Getty Images

Pento added that operating costs are a primary concern, noting that cannabis operators face higher risks related to compliance, licensing, regulations, and taxes.

“The cost of doing business as a cannabis operator is significantly higher than any other sector of the economy,” he said.

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Kara Bradford, CEO and co-founder of Viridian Staffing, agreed, noting that brands face additional taxes and costs than other industries. While P&L accounts must remain positive, it encourages brands to think outside the box.

“It would be really nice if companies would make sure they keep the cost of living in mind when looking at labor costs,” she said.

To help companies ensure they are considering living wages in their area, Bradford directs customers to the Massachusetts Institute of Technology (MIT) Living Wage Calculator.

The free online resource breaks down viable wages by US county, household size, and up to two working adults in the household. Bradford believes the calculator will benefit brands looking to design a compensation plan or corporate rewards philosophy.

She points customers to the tool “to at least have that as a data point and hopefully as a baseline, rather than just looking at minimum wages.”

This article originally appeared on Benzinga and has been republished with permission.