The human resources trends set to dominate 2024 are certain to disrupt the industry, mostly for the better. This year will be prosperous as multistate brands continue to expand into other states, but there will be challenges. One major inflection point will relate to rescheduling, with cannabis likely to shift from Schedule I to Schedule III. On the competition front, the biggest curveball will be the hemp-derived THC market, which offers a massive loophole for selling products outside dispensaries and without interstate constraints.
While rescheduling isn’t a complete win at the level of descheduling altogether, the move is a solid indicator the industry is moving in a positive direction. With the change from Schedule I to Schedule III, which may be approved as early as mid-year, we will see monumental shifts in taxes as cannabis brands finally become able to deduct business expenses like traditional companies do by accessing write-off disallowed under Internal Revenue Code Section 280E. Beyond the financial benefits, research implications are enormous: Scientists finally will be able to lean into research at all levels. What remains to be seen is the impact on banking relationships and investment.
Brand-building will be enormous in 2024. Flower brands already compete with hemp-derived THC products from a substitutable-goods perspective. In other words, the average new consumer might opt for convenience and familiarity in a bodega rather than visit a dispensary for the first time. Connoisseurs, purists, and regular consumers may take issue with this—and for good reason—but nothing will contribute more to the true normalization of cannabis than hemp-derived-THC-infused beverages sitting on shelves next to Pepsi and Coca-Cola products. Savvy infused-beverage and edibles brands will continue to pivot toward the hemp-derived THC market opportunity while preserving their hard-earned market share in the dispensary market.
Will 2024 see the emergence of true household brand names in cannabis? Possibly. We’ll continue to see an increase in licensing agreements from established brands in new states. The companies with the highest growth potential in this new industry are the ones operating under the strategic assumption that federal legalization is never going to happen. These organizations are setting up their business models, teams, and dynamics accordingly. With rescheduling, we likely will see more cannabis businesses with structures that resemble traditional companies.
So what does that mean from a talent perspective?
One major talent-related trend is the rise of multistate brands, which will continue to consolidate and leverage vertical integration where possible to improve margins. And with the rescheduling of cannabis to Schedule III, we’re likely to see more visible involvement from mainstream consumer companies and pharmaceutical brands, which will accelerate talent demand across job functions.
The influx of talent from more traditional consumer sectors means compensation will have to keep pace. Talent competition has never been higher. When it comes to salaries, the industry is lucrative for employees, especially those in leadership roles. According to ForceBrands’ 2024 Cannabis Salary Report, chief executive officers at the largest companies by revenue earn annual salaries that top $416,000—almost ten times what mid-level managers in the industry make. Though not quite as highly compensated, presidents, chief revenue officers, and chief marketing officers are among the highest-paid positions.
Cannabis brands must reorient their thinking about fair market compensation at the leadership level. More junior roles have aligned with fair market compensation in recent years, but employers that catch up to mainstream compensation ranges will be the ones most likely to succeed in the next three to five years as competition continues to reach new heights.
This year will prove to be a dynamic one for the industry. Sweeping reforms like rescheduling and potential relief via 280E’s recision will bring about changes that will impact the industry and influence how companies chart their growth strategies.
Brands are hiring seasoned and elevated talent that can maximize reward and minimize risk depending on how the market unfolds. While 2024 has the potential to be prosperous, it undoubtedly will be another nail-biting year with a few added market forces at play. Companies will need to plan accordingly and hire not just seasoned external talent but also talent with the ability to pivot in real time.
All these nuances will present opportunities for particularly adaptable leaders. Building teams and hiring for multiple possible outcomes will be more important than ever as the industry enters this exciting new chapter of growth. (Full Story)