MSO Hiring Through A Year of COVID-19 – Trulieve Leads The Way
The outbreak of COVID-19 threw a wrench into the plans of many companies who were forced to shelve their growth plans and recalibrate to a new normal. While America’s cannabis operators were not spared from the consequences of the pandemic; their sector nonetheless saw considerable growth as legal U.S. cannabis sales swelled to $17.5 billion in 2020, a 46% increase over 2019. Commensurate with this increase in sales, multi-state operators (MSOs) have aggressively hired to meet demand over the past 12 months, and of America’s publicly traded operators, Trulieve Cannabis Corp. has led the way.
Before we dive into the numbers, a quick explainer on how this analysis was conducted. A long-term quirk of cannabis capital markets is that most MSOs that want to go public find that, due to the federal status of cannabis in the United States, the Canadian Securities Exchange is (currently) one of the only exchanges where they can list. Another quirk is that unlike other exchanges such as the NYSE or TSX, the CSE has a unique disclosure requirement where companies must provide monthly progress reports on their business operations – including details on hiring.
While some issuers only provide little (if any detail) on their monthly hiring, such as TerrAscend Corp., many companies provide a comprehensive breakdown of all hiring/firing activity every single month. This combination of MSOs overwhelmingly congregating on the CSE and the exchange’s unique disclosure requirement means it is possible to get comparable monthly insights on employment activities, which form the basis of this analysis. So, how did Trulieve and some of the largest publicly traded CSE-listed MSOs stack up amongst one another?
During the 12-month period spanning March 1, 2020 to February 28, 2021, Trulieve net hired 3,573 employees – an average of almost 10 net new hires every single day. To put this growth into context, as of March 31, 2020, Trulieve disclosed that they employed “approximately 3,000 people.” In the 11 months since, Trulieve net hired 3,425 employees – increasing the company’s employee count by 114% despite the pandemic! This pace of hiring only accelerated in the latter half of the past 12 months with the company net hiring an average of 153 employees per month in the first six months and 442 per month over the past six months.
Other public companies that tacked out significant employee hiring numbers despite the pandemic included Curaleaf Holdings, Inc. which net added 1,160 employees, Jushi Holdings Inc. which net added 398 employees, and Harvest Health & Recreation Inc. which net added 311 new employees. While large MSOs such as Green Thumb Industries Inc. do not provide disclosures on employee hires/terminations on their monthly progress reports (and has therefore not been included in the chart above), partial disclosures on their quarterly filings also reveal considerable hiring momentum. As of March 31, 2020, Green Thumb had approximately 1,700 employees and the company net added 300 employees as of September 30, 2020.
At the very bottom of the pack was MedMen Enterprises Inc., who, despite America’s surging cannabis consumption, net lost 512 employees over the past 12 months. In MedMen’s case, the overwhelming majority of these employee losses were accumulated between March 2020 and August 2020. While COVID-19 restrictions no doubt played a role, the majority of these employee losses can be best attributed to MedMen’s aggressive restructuring plan that was first announced on November 15, 2019 and detailed the need to layoff employees and sell off non-core assets.
Growing employment numbers are by no means the sole barometer of future success. Just look at the painful share price declines and downsizing activities of many Canadian cannabis companies that followed their own wild hiring sprees. However, when hiring data is looked at in conjunction with other critical financial information, including sales growth and margins, it can definitely provide investors and analysts with an edge.
| Company | TTM Net Hires | Mar-20 | Apr-20 | May-20 | Jun-20 | Jul-20 | Aug-20 | Sep-20 | Oct-20 | Nov-20 | Dec-20 | Jan-21 | Feb-21 |
| Trulieve Cannabis Corp. | 3,573 | 148 | 294 | 162 | 78 | (109) | 347 | 320 | 421 | 505 | 570 | 417 | 420 |
| Curaleaf Holdings, Inc. | 1,160 | 20 | 42 | (2) | 115 | 58 | 221 | 140 | 106 | 113 | 123 | 116 | 108 |
| Jushi Holdings Inc. | 398 | (9) | (3) | 9 | 20 | 27 | 71 | 36 | 72 | 39 | 36 | 70 | 30 |
| Harvest Health & Recreation Inc. | 311 | 126 | (43) | (68) | 7 | (10) | 28 | 17 | 45 | 6 | 34 | 89 | 80 |
| Vireo Health International, Inc. | 42 | 8 | (8) | (6) | 4 | 12 | (50) | 16 | 8 | 16 | 8 | 16 | 18 |
| Lowell Farms Inc. | 29 | (4) | (6) | (2) | 1 | (4) | 17 | (4) | – | 2 | (1) | – | 30 |
| TILT Holdings Inc. | 26 | 19 | (18) | (33) | – | (6) | 6 | 11 | 6 | – | 15 | 10 | 16 |
| Acreage Holdings, Inc. | (15) | 6 | (35) | (17) | (21) | (38) | 25 | 35 | 2 | 3 | 4 | 1 | 20 |
| 4Front Ventures Corp. | (60) | (14) | (3) | (30) | (8) | 1 | 4 | (7) | 2 | (47) | 35 | 3 | 4 |
| MedMen Enterprises Inc. | (512) | (79) | (170) | (190) | (42) | (23) | 4 | (30) | 12 | 17 | (2) | 3 | (12) |
Information for this commentary was found via Sedar, Forbes and the companies mentioned. The author has no securities or affiliations related to this organization or any organization mentioned. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
