This Booming California Cannabis Brand Is Growing Fast by Offering Gig Workers Good Jobs
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Lots of Californians get their cannabis by ordering online and having it delivered, but delivery got a lot more expensive for cannabis companies last January when regulators decreed delivery drivers must be employees who are paid at least minimum wage, with the usual minimum benefits, and not contractors.
Some small dispensaries ceased deliveries rather than pay drivers more and give them benefits, but Caliva, one of the largest vertically integrated cannabis brands in California, went the other way entirely. “It’s a regulatory requirement but we've really leaned into it,” said Dennis O’Malley, CEO and president of Caliva. “We asked ourselves, given the regulation, how can we make this the best environment for drivers?’’
The company is making about 2,000 deliveries per day but has to recruit drivers in the labor-starved San Francisco Bay Area (the unemployment rate is a scant 2 percent), so Caliva embraced enlightened self interest in a big way. Drivers now start at between $15 and $17.50 per hour depending upon experience. Full time drivers receive health insurance, vacation time, a 401K and stock options, plus the option of purchasing stock during the investment round. The 401K is available to part time employees, who can also earn stock options after a set time with the company. Part time employees were also allowed to purchase shares during the investment round.
"When we provided stock options to all of our full time employees, including our drivers, I think that was a really big welcome surprise to a lot of them," O'Malley said. "And then we also offered both full time and part time employees the opportunity to actually purchase stock at our last investment round, which is something pretty unusual to do as well."
The fast growing company has 203 drivers, of which 125 have been hired since the beginning of the year. Most were lured from gig work with Uber, Lyft and DoorDash. “We rely on the people who are delivering our product to be the face of Caliva. That's a very powerful role,” O’Malley said. “We are very proud to have 200-plus great, great drivers on staff to deliver empowerment and health and wellness and happiness, working for a company that offers full time employment, full benefits and stock options in a really great environment. That is an amazing opportunity for a lot of people.”
In January, Caliva closed its first round of funding at an over-subscribed amount of $75M. Notable among the early investors are Carol Bartz, former CEO of Yahoo and Autodesk and legendary 49er quarterback Joe Montana. Bartz is now chair of Caliva's board of directors.
Caliva is a market leader in cannabis consumer products in California, which constitutes at least 35 percent of the legal cannabis market in the US. The company currently employs 569 workers, ranging from drivers and growers to bud trimmers and scientists, in the Bay Area. Of those, 246 have been hired just since January. Caliva has at least 50 open positions currently.
Revenues are increasing faster than hiring, with an increase of 350 percent from 2017 to 2018 and a 400 percent increase in the first quarter of 2019 compared with the first quarter of 2018. Caliva grows its own cannabis, makes its own products and sells them through its own stores and online with the delivery service. O’Malley stressed that having happy, fully engaged employees dealing directly with customers is of fundamental importance to the company."People really flock to the mission of delivering a plant-based solution for health and wellness needs," he said. "They really get behind the notion of something that is truly improving people's lives in many different ways. Our drivers meet a lot of people who always love to see them at their door.”