U.S. cannabis retailers face a staggering 54.6% budtender turnover rate, with nearly one in four new hires leaving within their first month. A new approach could give Michigan and Ohio cannabis companies a powerful tool to keep good employees longer — while potentially increasing workers’ take-home pay and reducing employer payroll costs.
ANN ARBOR – Employee turnover isn’t just an HR headache for cannabis companies. It can become a significant operating expense.
Research from cannabis analytics company Headset found that 54.6% of U.S. budtenders who worked during a 12-month period had left their stores by the end of that period.
Even more striking: 23% of newly hired U.S. budtenders didn’t complete their first full month on the job.
The Headset analysis examined cannabis retail employees from June 2021 through May 2022 across nine U.S. markets — including Michigan.
While the research does not provide a separate Michigan turnover percentage, it suggests cannabis retailers face an employee-retention challenge considerably greater than that experienced by many employers generally.
Michigan’s Hourly Worker Turnover Rate: 25.1%
A separate 2026 survey from the American Society of Employers provides a useful Michigan benchmark.
ASE surveyed 204 Michigan organizations covering the 2025 calendar year and found that hourly employees had a 25.1% voluntary turnover rate, the highest of the employee categories measured.
Better salary and compensation was cited by 57% of participating employers as one of the leading reasons hourly employees voluntarily left their jobs.
And employers are responding.
Some 63% of surveyed Michigan organizations said they had conducted compensation and/or benefits reviews during the previous year as part of their efforts to reduce turnover.
Put the two studies next to each other and the challenge facing cannabis retailers becomes easier to understand:
U.S. budtender turnover: 54.6%.
Michigan hourly-worker voluntary turnover: 25.1%.
The methodologies aren’t identical, so the percentages shouldn’t be treated as a direct apples-to-apples comparison. But the difference illustrates why employee retention deserves the attention of cannabis operators.
Budtender Turnover By The Numbers
54.6% — U.S. budtenders who left their dispensary during the 12-month period studied by Headset.
23% — Newly hired budtenders who didn’t complete their first full month on the job.
30%+ — Share of dispensaries studied that experienced budtender turnover rates above 60%.
25.1% — Voluntary turnover rate among Michigan hourly workers in 2025, according to the American Society of Employers.
57% — Michigan employers citing better salary or compensation as a leading reason hourly employees voluntarily leave.
63% — Michigan employers that reviewed compensation and/or benefits as part of their efforts to reduce turnover.
Why It Matters
The Headset and Michigan ASE studies use different methodologies and shouldn’t be treated as a direct apples-to-apples comparison. But together they underscore the business challenge facing cannabis employers: dispensaries operate in an industry with exceptionally high frontline employee turnover while competing for workers who increasingly consider compensation and benefits when deciding whether to stay or leave.
A dispensary that constantly replaces budtenders isn’t simply replacing bodies behind a counter.
It’s repeatedly recruiting, interviewing, onboarding and training employees — while potentially losing experienced workers who know the products, understand state compliance requirements and have relationships with regular customers.
That’s the business problem William “Bill” Shaw believes the WOW supplemental wellness program could help Michigan and Ohio cannabis companies address.
In a recent MITechNews video interview, Shaw explained how WOW is designed to provide employees with additional healthcare and wellness benefits while potentially reducing employer payroll costs.
Here’s how the program works.
1. WOW Adds A Supplemental Employee Wellness Benefit
WOW is designed as a supplemental wellness and preventive healthcare benefit for employees.
It isn’t simply another wage increase.
Instead, employers can use the program to add healthcare and wellness services to an employee’s overall compensation package.
For cannabis operators facing tight margins, that distinction could be important.
2. Employees Gain Access To Healthcare And Wellness Services
Participating employees can receive access to preventive and routine healthcare and wellness services available through the program.
That potentially gives an employer something beyond hourly wages to offer prospective and existing employees.
For a budtender comparing two similar jobs, benefits could become part of the decision about which employer to choose — or whether to leave an existing job.
3. The Program Can Affect Employee Take-Home Pay
WOW uses provisions of the federal tax code governing qualified employee benefits.
When properly structured through payroll, eligible benefits may reduce an employee’s taxable wages.
That can potentially increase an employee’s take-home pay without requiring the employer to provide an equivalent wage increase.
The precise impact depends upon the employee’s compensation, payroll structure and program configuration.
4. Employers Can Potentially Reduce Payroll Taxes
There is also an employer-side benefit.
Because eligible benefits can be structured on a pre-tax basis, employers may reduce wages subject to FICA payroll taxes.
That creates the possibility of providing additional employee benefits while offsetting some of the employer’s cost through payroll-tax savings.
Cannabis companies considering the program should have their payroll, accounting and tax professionals review how the program would apply to their specific businesses.
5. WOW Gives Cannabis Employers Another Way To Compete For Workers
Michigan cannabis operators already face extraordinary price competition.
That makes simply raising wages every time another dispensary offers employees more money difficult to sustain.
WOW presents a different proposition.
Instead of competing exclusively on hourly wages, an employer can potentially offer a combination of healthcare benefits and improved take-home pay.
That could make the overall compensation package more competitive without relying entirely on wage increases.
6. Benefits Could Become A Retention Tool
This is where the turnover statistics become particularly important.
If roughly half of U.S. budtenders leave their stores within a year, even a modest improvement in retention could have financial value.
An employee receiving healthcare and wellness benefits through an employer has another factor to consider before jumping to another dispensary for a slightly higher hourly wage.
The objective isn’t simply recruiting employees.
It’s giving good employees more reasons to stay.
7. Lower Turnover Can Produce Savings Beyond Payroll Taxes
Replacing an employee costs more than the wage paid to the replacement.
Companies must recruit candidates, interview them, process new hires, train them and devote management time to getting them productive.
Cannabis businesses have additional considerations because employees must understand state regulations, product requirements, security procedures and compliance rules.
Experienced budtenders also develop product knowledge and relationships with repeat customers.
Losing those employees can therefore mean losing knowledge and sales experience along with the worker.
Shaw Also Offers Cannabis Business Financing
In addition to the WOW employee wellness program, Shaw works with well-qualified cannabis companies and investors seeking access to private capital.
Because cannabis businesses can still face difficulty obtaining conventional bank financing, Shaw works with private-capital sources on several types of business funding:
- Equipment financing — Capital for equipment purchases and expansion.
- Working capital — Funding to support operations and business growth.
- Acquisition financing — Capital for qualified purchases of cannabis businesses or assets.
- Bridge loans — Short-term financing for companies needing capital while arranging longer-term funding.
- Private capital funding — Financing from private funding sources rather than traditional banks.
Financing is subject to underwriting and qualification. Availability, rates and terms depend on the borrower and transaction.
8. Why Michigan And Ohio Cannabis Operators Should Pay Attention
Cannabis companies have spent years competing aggressively for customers.
Increasingly, they also need to think about how they’re competing for employees.
The Headset numbers make the scale of that challenge clear: 54.6% turnover, nearly one-quarter of new budtenders gone within their first month and more than 30% of dispensaries experiencing turnover above 60%.
For owners and HR executives, that changes the question.
Instead of asking only:
What would an employee benefits program cost us?
They should also ask:
What is employee turnover already costing us?
If a benefits program can help employees access healthcare, improve the attractiveness of their compensation package and potentially reduce employer payroll costs, then employee benefits become more than an HR expense.
They become a potential employee-retention strategy.
