Nelson Staffing is buying Higher Growth Search, a cannabis-staffing firm formerly known as Oakland-based People Need People.
Joe Madigan, Nelson CEO, will serve as CEO of both organizations. The name change and restructuring announcement was made April 20.
Higher Growth Search will continue to be based out of Oakland, but now has a broader reach as it enters the North Bay marketplace.
“This was a 2-year-long research project to figure out how we can support (cannabis) organizations within our communities,” Madigan said. “Really, the best way was to create a standalone organization that can supply temporary and direct-hire employment, as well as payroll, risk consulting and HR, to the cannabis industry.”
Higher Growth works with cultivators throughout California, as well as leading manufacturers and distributors of cannabis products, Madigan said.
“We service everything from seed to sale,” Madigan said, adding the cannabis industry is becoming more mainstream. “In general, I think it’s becoming more acceptable, although at the same time, I still feel there is a lot of hesitation.”
Madigan said the biggest challenge is that cannabis is listed federally as a Schedule 1 drug, which creates funding issues for banks and other financial institutions. Schedule 1 drugs are classified as having potential for being abused and creating safety concerns.
“In terms of California, there’s still a struggle to get licensing approved, which is hindering the overall growth” of the cannabis industry, Madigan said.
Higher Growth Search has established its own banking relationship with North Bay Credit Union in Santa Rosa which has gone public in its relationships with the cannabis industry.
Stacy Bryant, Higher Growth’s managing director, said,“Legalization has created new challenges for business owners, who now cannot rely solely on their expertise with cannabis, but must also quickly come to understand employment law and implement new policies to remain in compliance. It’s clear that not only does the cannabis industry ‘Need People,’ but it also needs to properly hire, manage, and retain them so that their businesses can grow.”
Among other areas staffing firms working in the expanding industry is The HR Matrix LLC, a human resources consulting firm in Santa Rosa. It began working with cannabis businesses about two years ago.
“One operational gap we found was related to payroll companies refusing to support payroll for cannabis businesses,” said Brenda Gilchrist, HR Matrix co-founder. “A majority don’t want to take the risk.”
One of the cannabis businesses HR Matrix has consulted with is San Francisco-based Apothecarium, which in February was sold to a Canadian wellness firm.
Apothecarium had multiple store fronts, which “provided us an opportunity to learn and understand the unique nuances and complexities of the industry,” Gilchrist said.
The firm also has come up against the stigma that still surrounds cannabis as a legitimate industry.
“While on-site for over a year at a Bay Area-based cannabis dispensary, we found that there was a smaller pool of candidates when we conducted a search for a new HR director,” said Lindsey Brown, HR Matrix associate. “Some candidates declined the job opportunity once they learned we were recruiting for a cannabis company.”
That recruiting experience is another demonstration of a burgeoning industry that still has complexities to be ironed out.
“We are interested in continuing to work with the industry as long as the cannabis company is a legitimate organization,” Gilchrist said, “and one that cares about its employees and is growing with sound business principles in mind.”