How to Create Your Cannabis Dispensary Employee Handbook
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How to Create Your Cannabis Dispensary Employee Handbook

Columns - HR HQ

Follow these pointers to make sure this onboarding tool is both complete and compliant.

March 18, 2019

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An employee handbook is essential for any dispensary. It is a valuable resource that can improve a dispensary’s productivity and profits, ensure employees understand performance and behavior expectations, and provide defense against employment lawsuits.

Employee handbooks are comprised of clear and consistent policies concerning dispensary culture, workplace standards, benefits and employee behavior. These policies should be developed by dispensary management with the assistance of an employment law attorney. The attorney should also review all handbook language prior to publication and distribution.

Here is a primer on the basic topics that should be included in the handbook.


This section introduces employees to the handbook’s importance and purpose. Include descriptions of the dispensary’s culture and mission, and how employees can support the company’s goals.

Acknowledgment and Receipt: The employee handbook’s first page might be a tear-out "acknowledgment" form to be signed by the employee and submitted to management. All employees should be required to acknowledge receipt of the employee handbook and the policies contained in it, which are based on federal Equal Employment Opportunity laws as well as state and local employment notices. A free acknowledgment form can be found at


The following sections describe the minimum topics that should appear in an employee handbook. Each section’s contents must adhere to federal, state and local employment laws applicable to dispensaries. For organizations that own dispensaries in multiple states, the handbook should be edited to reflect differing state and local laws.

1. Dispensary’s ‘Employment at Will’ Statement.

This section states employment is on an at-will basis, meaning that the employee or the company may terminate the employment relationship at any time for any reason without notice. Confirm this language with the employment law attorney.

2. Equal Opportunity and Handling of Complaints.

At minimum, the dispensary should state its commitment to creating and maintaining a safe workplace. Specific language related to harassment and complaint procedures defined in the Civil Rights Act of 1964 (Title VII) must be included in this section, as well as applicable state or local laws with additional requirements.

In this section of the handbook, the dispensary should state its policies and procedures for handling and investigating harassment complaints. Standard verbiage regarding various harassment types, sexual harassment and hostile workplace definitions, and retaliation is available online. Additionally, include language that addresses Americans with Disabilities Act (ADA) requirements and how the dispensary will accommodate them.

3. Conflicts of Interest and Confidentiality.

Here, the dispensary should state expectations regarding ethical conduct, personal integrity and engaging in activities outside of the dispensary that could reflect poorly on the company. Examples of inappropriate or unacceptable activities that should likely be included in this section include:

  • providing confidential information or data to another dispensary or to suppliers;
  • borrowing money from customers or suppliers;
  • accepting substantial (as determined by the employer) gifts from customers or suppliers;
  • using one’s position in the dispensary or knowledge of the dispensary’s business for personal gains; and
  • engaging in activities that violate antitrust laws, commercial bribery laws, copyright laws, discrimination laws or other laws regulating dispensary conduct.

4. Employment Relationship.

Employment Classification is based on federal laws. Each employee classification definition should be included in this section. These classifications (exempt; nonexempt; regular, full-time; regular, part-time; temporary, full-time; and temporary, part-time) are defined online in the Society for Human Resource Management’s (SHRM) “Employee Handbook Template.” Access it here:

This section also includes the dispensary’s standard work week, business hours, work schedules and permitted employee breaks (which are often governed by state or local laws and may differ from federal requirements). The law requires time records for all nonexempt employees. Use this section to describe the process for how employees will complete and submit accurate weekly time reports. If employee overtime is required, the rate of pay calculation for nonexempt employees and the dispensary’s overtime policies, such as the need to obtain prior management approval, is documented in this section.

Dispensary employees’ salaries, payroll deductions and pay practices must conform to the Fair Labor Standards Act (FLSA). The pay period (weekly, biweekly or monthly) and payday should be documented here, along with the process for a payday that falls on a federal holiday.

This section should also explain where personnel files are kept, who has access to them and how employee access is managed.

5. Employment of Relatives and Domestic Partners.

The dispensary’s policies regarding nepotism or current employees who marry each other are documented in this section.

6. Separation From Employment.

This section outlines the dispensary’s expectations regarding written notice in the case of voluntary resignation and the process for exiting the employee (collecting company property, final pay, COBRA if applicable, etc.). This dispensary process must comply with state and local requirements.

7. Workplace Guidelines.

Attendance: Many HR issues related to employee attendance can be avoided by specifying the dispensary’s expectations regarding tardiness, absenteeism and the consequences for not meeting those expectations. Also, be sure to include how and when an employee should communicate tardiness or absenteeism with management.

Job Performance: This section addresses communication between employees and management. Information about performance evaluations should be documented. (The dispensary’s process for addressing poor job performance should be in the handbook’s disciplinary section, below.)

Dress Code: Expectations for employees’ clothing and grooming should be specified in this section. Employees need to support a professional work environment consistent with good hygiene and safety. For customer-facing positions, management may require lab coats or company-branded clothing.

Social Media: This section documents the dispensary’s policy regarding employee participation on social media platforms, such as Twitter, Facebook, LinkedIn, YouTube, Snapchat, Instagram and others. This should cover social media use during work hours, social media use during personal time and what constitutes an appropriate post.

Other topics to consider including in Workplace Guidelines are:

  • staff communication, updates and notices
  • solicitation by employees and non-industry parties
  • handling confidential information on company computers
  • policies regarding internet use, email and company resources
Employee handbooks are comprised of clear and consistent policies concerning dispensary culture, workplace standards, benefits and employee behavior.

8. Disciplinary Procedure.

Every dispensary needs a documented policy outlining employee standards for behavior and performance, as well as a clear description of consequences when these standards are not met.

Dispensaries should ideally utilize a policy of progressive discipline, which informs individual employees when they fail to meet behavior and performance standards and allows them the opportunity to improve over time. The steps dispensary management will take to administer discipline if an employee fails to improve should be documented in this section.

9. Paid and Unpaid Time Off and Leaves of Absence.

This section documents the dispensary’s holiday schedule and its policies for taking leave prior to or after an official holiday. The dispensary’s policy regarding religious holidays is documented here, too.

How vacation hours are accrued, how they are to be used, who is eligible for paid vacation, how vacation is scheduled, whether employees are permitted to carry over accrued vacation, and how payout for unused vacation time will be handled should all be in this section. Review state and local laws with an attorney, if possible, when creating your dispensary’s policy.

Medical leaves of absence are extremely challenging because many states have multiple leave laws which interact with federal laws. The interaction between state laws and the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and Workers Compensation needs to be well understood, and both state and federal applicable policies need to be documented.

Employers with 50 or more employees (either part-time or full-time) must comply with FMLA regulations, and all employers, regardless of size, must notify workers of their rights under the FMLA, usually by displaying labor law posters and including the notification in the employee handbook. Dispensaries should consult with an employment attorney experienced in both state and federal leave laws when defining policy and administering medical leaves of absence.

Other topics that should be included in this section include:

  • sick leave
  • maternity and paternity leave
  • military leave
  • bereavement leave
  • jury/court duty
  • time off for voting
The dispensary’s policy for when, where and how much testing of product is performed during business hours and on-site, if any, should be documented.

10. Workplace Safety.

Drug-Free and Alcohol-Free Workplace: At the federal level, most private employers are not required to have a drug-free workplace policy. The federal Drug-Free Workplace Act (DFWA) does not require employers to either conduct drug testing or fire employees who test positive for drugs. The applicable employment law and employers' responsibilities regarding medical and recreational cannabis vary greatly.

Many dispensaries encourage employees to test, try and recommend cannabis products to customers. The dispensary’s policy for when, where and how much testing of product is performed during business hours and on-site, if any, should be documented here.

Some dispensaries may state that “any employees using drugs and alcohol must meet the same standards of performance and behavior as other employees,” and that “all applicable federal and state laws and regulations concerning drug and alcohol use will be followed.”

Other dispensaries may decide to have a more formal zero-tolerance policy to:

  • reduce drug-related accidents
  • avoid liability issues
  • protect the dispensary’s image
  • increase productivity and profits

Additional topics to be included in this section might include:

  • smoke-free workplace
  • workplace violence prevention
  • safety commitment
  • emergency closings

11. Employee Benefits.

Dispensary size, culture and market position usually determine the extent of benefits offered to employees. If your dispensary offers any of the following benefits, then each should be described in the handbook, along with information as to who is eligible, what portion is paid by your dispensary and which are mandatory:

  • Medical, Dental and Vision Insurance
  • Group Life Insurance
  • Short- and Long-Term Disability
  • 401(k) Plan
  • Workers’ Compensation
  • Employee Assistance Program

Remember: Building a suitable employee handbook will streamline your onboarding process and ensure that all employees understand their roles and rights.

Note: This column is not to be considered as legal or financial advice nor does it address all HR regulatory actions that may impact your business.