Vangst ropes in $19 million more to place employees with work in the growing cannabis industry – TechCrunch

In a narrow job market, so-called vertical job markets that focus on a single industry, such as nursing or hospitality, attract funding. Trusted Health, a healthcare recruitment platform, raised $149 million in funding in November, for example. Seasoned, a recruitment platform for restaurant workers, closed nearly $19 million around the same time.

Investors are similarly betting that there are plenty of upsides to a hiring platform that focuses entirely on the fast-growing cannabis industry, with an estimated 320,000 people already employed as of last fall, a 32% increase from the previous year.

In fact, a syndicate of investors led by Level One Fund funneled $19 million in Series B funding into Vangst, a six-year-old Denver-based company that combines short-term workers and full-time employees with employment opportunities at cannabis companies across the United States, not from Surprisingly, given the attractiveness of the outfit, along with the variety of revenue streams it has built.

According to founder and CEO Karson Humiston — who launched the company when he was an undergraduate at St. Lawrence University — Vangst currently offers 500 “carts” per week that take the platform an average of 48 hours to fill. (Vangst treats these individuals as W-2 employees, and pays them through its own payroll.) It also currently has nearly 2,000 full-time jobs representing $85 million in total salaries.

You can start adding financially. Vangst charges its clients 50% more than it pays its part-time employees, so paying $15 an hour could charge the client $22.50 for employee time. For full-time roles, in exchange for vetting the talent you associate with companies, Vangst receives a percentage of each candidate’s first year salary.

Vangst also charges employers for monthly and annual subscriptions for the privilege of posting as many slots as they need to fill, and recently started building a content business that includes modules around retail roles and other jobs in the cannabis industry. New in the industry may not understand. (Not everyone knows what a razor does.)

Not everything was a bed of roses for Humiston and her team. Although Vangst gained momentum after the first round of the round, which closed with $10 million in 2019, like many other recruiters, it was hit hard by the direct effects of the coronavirus. Humiston says that in March of 2020, Vangst had to lay off half of its 70-person team at the time, as its clients cut their salaries and started working at 50% of their previous capacity.

In fact, it was because Vangst’s dwindling revenue decided to go into the business of hiring full-time paid candidates into roles. Think accounting managers, product managers, and software engineers. “This was kind of our COVID strategy,” she says.

Gradually, as the business picked up, Fangst had built an entirely new book on the business, Humestone says.

Now the challenge is no longer demand but supply. Like almost every other employer in the US, Vangst, which has 56 employees, works hard to find people to fill roles on its platform, including by attending trade shows and spending money on SEO services.

Part of the new funding round will be used to build the small marketing team, which is not surprising.

Meanwhile, Vangst’s special clients have to improve their terms in many cases in order to secure assistance. As Humiston says, “we encourage them to pay above minimum wage” and “demonstrate their mission, values, and perks.”

The good news: Several new online jobs are expected to be available to fill, which bodes well for Vangst when the job market finds its footing again.

New York state, for example, legalized recreational cannabis use last September, and while it is still in the process of distributing retail licenses, the decision is expected to open 60,000 new jobs, according to former New York Governor Andrew Cuomo.

Last fall, New Jersey also signed three bills allowing and regulating recreational marijuana use, and companies are already beginning to open up there.

That doesn’t mean anything about Michigan, which is “growing very fast right now” as a market, says Hummuston. (Vangst also has clients in Colorado, California, Nevada, and Arizona, among other places that have already embraced recreational marijuana. There are currently 18 states in total where it is legal.)

Ultimately, says Hummuston, Fangst also hopes to go global. To that end, she has upcoming plans to spend time in Barcelona with one of her investors, Casa Verde Capital, who is investing more money in European startups these days.

He gave the team a lot to master first. “As here [in the U.S.]Since we had to learn a lot about business needs and regulatory matters, we are keen to learn about international markets. We began this exploration process in the spring.”

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