Vangst just raised $10 million to plug more people into the fast-growing cannabis industry

TC: So you dropped the travel startup idea and pursued this. Where did you start?

KH: First, I rushed back to St. Lawrence and made an inexpensive site on Wix and started connecting people in my database with summer internships. I’d told the companies I’d met with that I could find them employees for $500 and I called this new company Graduana, [with the tagline] green jobs for grads. My thought was, I’ll go to Colorado and do Graduana for six months and see where the industry really is.

By the spring of 2016, I realized that demand far exceeded interns and recent grads and that we needed to find recruiters who know what they’re doing. We brought on recruiters who were just focused on cultivation, for example, and who know the difference between someone who can grow cannabis in the garage and someone who has done large-scale agricultural growing. They they started pulling in people from the tomato and tulip and big commercial ag who’ve grown [plants] in big state-of-the-art greenhouses and could bring important skills to the table. We also brought in recruiters to just focus on the retail side of things.

It became this profitable, 25-person, boutique staffing agency. But we also saw an opportunity for on-demand labor, because of the seasonality of the industry. Cannabis grows, then it needs to be trimmed and packaged. . .

TC: So it was time for venture capital?

KH: When you’re talking about temporary staffing, it’s really been done manually in this industry, so we wanted to build a platform that would notify candidates that a certain company needs 20 trimmers and is willing to pay $12 an hour and where, meanwhile, employers could see that someone has trimmed for 2,000 hours. And each could rate each other. So we needed to hire engineering and a customer success team and legal, and our revenue wasn’t going to cover those costs.

Thankfully, a founder friend in the space, Ryan Smith of LeafLink, introduced us to Lerer Hippeau when he heard were raising a seed round. We received a warm intro to Casa Verde, too. And both have been amazingly helpful to us.

TC: Are you still doing high-end hiring, too?

KH: We are. Revenue from that piece of our business, where we’re helping companies find maybe COOs or a director of cultivation or extraction, more than doubled last year and continues to be profitable. We get 1,000 resumes some days. We now have 200,000 job candidates on the platform.

TC: Obviously, you’re charging employers different amounts depending on the the type of role that you’re filling. Can you share some specifics?

KH: Right. On the direct hire side, we take a percentage of their first year’s salary. On the gig side, a company tells us how much they’d like to pay for gig workers, and there’s a mark-up on that that we keep.

TC: No matter how long that person works for your client?

KH: It’s usually for a matter of weeks. If it’s longer than that, we charge them a buyout fee [to step out of the relationship].

TC: I take it you’re marketing the service to college students largely.

KH: We market the service through career fairs that we throw in different states, and at trade shows in and out of the industry. We also spend time going to college campuses. But our acquisition costs have been relatively low. Everyone who gets placed with us is known as an original Vangster and we do Vangster nights, where anyone in our network can bring a friend and we can help turn them into employees, too.

TC: More states are legalizing recreational cannabis; how are you drumming up workforces in different places?

KH: We have a team now in Denver, in Santa Monica and a small team in Oakland, and as we launch additional cities for Vangst gigs, we’re hiring managers and people who can do client outreach and candidate vetting and onboarding. We just hired an early employee of Uber, Will Zinsmeister, who helped oversee the launch of cities in Texas for Uber, so we’re excited to have Will and others thinking through supply-and-demand issues as we launch more widely.

TC: Out of curiosity, how much do cannabis jobs pay, and how many people work in the industry right now — do you have any idea?

KH: I think there’s more than 160,000 employees across the cannabis industry right now, and by 2022, the industry is expected to grow to around 340,000 full-time employees.

We did survey 1,500 people to put together a salary guide and one of the questions we asked was how much of their labor needs are seasonable versus otherwise, and they said about 30 percent.

As for the salaries, the on-demand jobs are very in line with other industries. When it comes to full-time jobs, outside sales jobs pay on average a salary of $73,000, which is in line with other outside sales jobs. On the higher end, a compliance manager can make $149,000, a director of extraction makes on average $191,000, and a director of cultivation on the high end can make $250,000.

TC: I think that’s more than people might have imagined. Who is landing these higher-end jobs other than people with backgrounds in traditional large-scale farming?

KH: You’re seeing people graduating with a degree in botany who’ve maybe worked for a cannabis company for six years and are seen as having very unique experience. We’re seeing a lot of clients in Maryland and other places saying they want candidates from Colorado.