Exclusive Interview with Vangst Founder and CEO Karson Humiston
Cannabis hiring platform Vangst completed a $19 million Series B at the beginning of the year, and now the company is looking to bulk up its team and move into new markets. Founder and CEO Karson Humiston spoke to New Cannabis Ventures about the company’s platform, how it works with cannabis companies and plans for continued growth. The audio of the entire conversation is available at the end of this written summary.
From 2016 to Today
Humiston’s entrepreneurship dates back to her days in college. While a student at a small liberal arts college in upstate New York, she launched the student travel company On Track Adventures. She ultimately decided that business was not her long-term goal, so she set out to find a different direction after graduating.
The cannabis industry was starting to get some buzz, but it was only legal in Colorado, Washington, Oregon and Alaska at the time. Humiston made a trip out to a trade show in Colorado and saw the opportunity to build a hiring solution in a brand new industry. Vangst was officially launched in 2016.
The company was bootstrapped for the first couple of years, before raising a seed round, Series A and Series B. At one point, the Vangst team spent the last of the capital at its disposal to purchase a booth and attend MJBizCon. They needed to book business at the event, or the company would fold. They were able to book $30,000 worth of business at the event, and Vangst has continued to thrive since. As the company grows, Humiston wants to maintain that drive that helped the company to get its start.
A total of five people attended that first MJBizCon. Since then, the Vangst team has grown significantly. It has about 60 employees today, and Humiston expects that number to double by the end of the year. She is joined on the leadership team by people like CFO Matt Karlin, Head of People Ciera Parks, Head of Recruiting Craig Leland and, most recently, VP of Sales Corey Shankman. Vangst also has a number of open leadership positions as a result of its recent funding round.
The Vangst Platform
The Vangst platform helps to pair prospective employees with cannabis companies. Candidates create a profile, and Vangst helps them to achieve the necessary credentials depending on the state. For example, the company will help candidates in Colorado receive their MED Badge. Once candidates are properly credentialed, they can apply for full-time positions and temporary gigs through the Vangst platform.
Cannabis companies can use Vangst to help find qualified candidates and maintain optimal levels of staffing, whether they need full-time employees, gig workers or a mix of both. When a company finds a gig worker through Vangst, that person is a W-2 employee who clocks in and out and receives payment through the Vangst platform. Temporary employees make up approximately 20 percent of the cannabis industry workforce, according to Humiston. Vangst helps companies to quickly find workers to fill their job needs.
Vangst also has a vetting product for cannabis employers. The company does a level of candidate vetting for cannabis companies looking to hire. The hiring platform is also launching a training offering, so candidates can learn about topics like cannabis retail and compliance so they can stand out during the application process and be more prepared for their first day on the job.
Approximately 1,200 cannabis businesses are using Vangst to help with their hiring needs. The company’s GIGS platform is currently active in seven states, and the company plans to expand to five additional markets this year, according to Humiston.
Launching the platform in a new state involves meeting compliance standards. Vangst needs to ensure the proper workers’ compensation is in place, and it needs to be prepared to manage state and federal taxes for employees. It also needs to have candidates lined up for customers in a new market. Vangst hosts career fairs and manage referral programs. It also offers training specific to the new state. The company looks for ways to attract candidates to its platform and set them up for success, according to Humiston. Vangst is considering entering markets like Florida, New Jersey and Virginia.
Vangst works with a wide array of cannabis companies, including large MSOs, single-state operators and small mom-and-pop shops. Holistic Industries is one of the company’s largest customers, according to Humiston. It works with the MSO across multiple markets. Vangst takes a different approach to working with smaller companies, like Colorado dispensary Simply Pure. The platform is able to support large cannabis operators and craft, boutique operators in different ways, according to Humiston.
The job market in cannabis is competitive, and companies need talent. Cannabis businesses that use the Vangst platform are able to build a company profile that highlights their mission, values, benefits and perks. Companies are able to use this profile as a marketing tool to attract the right candidates. Vangst is a scalable tool for cannabis companies, according to Humiston. Operators can use the platform to maintain the optimal level of team members, avoiding understaffing and overstaffing. The Vangst platform also offers customers a tool to train its employees.
The Competitive Landscape
Vangst is not operating without competition. But, Humiston is keen on taking the leading position in cannabis hiring. She wants to drive the company to at least triple its business every year. M&A and partnerships could be a part of that momentum. Vangst is currently in conversations with a couple of companies in the training space, according to Humiston. Going forward, the team will keep an open mind about the possibility of acquisitions or partnerships that could help the company achieve its mission of hiring, training and paying cannabis employees.
All of the company’s existing investors participated in its recent Series B, and the company brought in some new investors, according to Humiston. Vangst has a mix of cannabis and technology investors. The Series B was led by Level One Fund. Other investors include Casa Verde Capital, Lerer Hippeau, Colle Capital and L2 Ventures.
Humiston treats investors like partners. From her perspective, entrepreneurs need capital and investors need great founders. She regularly has transparent conversations with investors, using their insight to help build strategy.
Raising capital has never been a problem for the company, according to Humiston. If the company needs to go out and raise more, another private equity round would likely make sense at this stage, but it will depend on the company’s needs when that time arrives.
Vangst will be using the capital to double the size of its team, strengthen its existing products, launch new products and expand into new markets. The team is planning to triple its revenue this year, according to Humiston.
The number of full-time and gig positions filled are key markers of the company’s success. The Vangst team is always looking for ways to fill more positions than it did the day before. As the company goes through hypergrowth, Humiston is focused on keeping the team aligned and maintaining the company’s culture.
To learn more, visit the Vangst website. Listen to the entire interview: