An estimated 321,000 people are now employed full-time in the legal marijuana industry. Although the industry is growing at breakneck speed, there are still many impediments that the businesses in it are facing. One of these pitfalls is the matter of payroll management.
Due to federal regulations, most banks don’t want to take on a cannabis business, which means banking and payroll solutions are often out of their reach. So how do dispensaries and other cannabis-related businesses pay their employees while staying within legal bounds?
Luckily, there are available options that MRBs can explore in order to facilitate business growth and expedite the payroll process. Read on to discover how to handle it properly, conveniently, and securely while remaining compliant with federal and state regulations.
Since the banking options of marijuana-related businesses are seriously limited, dispensaries often feel they need to resort to paying their employees in cash. Although business owners are understandably confused and simply seeking the most convenient way to manage payroll, this isn’t the best solution to the problem. Actually, it’s a far cry from it.
Apart from being problematic in the eyes of peers from the cannabis business, this practice could also generate legal issues. It means you’re breaking tax laws and you could be facing hefty fines if it gets out. It could set you back financially, attract the wrong kind of attention to your company, and irreparably tarnish your reputation.
An alternative to paying “under-the-table” is hiring workers as independent contractors. This way, they aren’t officially employed at the company and they pay taxes on their own instead of the employer doing it for them. This practice is also known as “1099 employees”. It puts the workers at a disadvantage, so they will likely feel underappreciated and unmotivated. Not to mention that it is also frowned upon by the authorities and could lead to serious penalties.
Budtenders and other people working in the cannabis industry should be paid through proper channels, in much the same way as professionals in other sectors do. The employer is legally required to pay their portion of employment taxes, take care of payroll returns, withhold taxes from employee wages, and adhere to other legal obligations regarding taxes. This may be difficult to do if you don’t have a strong support system to assist you with your banking operations.
However, there are companies that can handle your payroll and banking needs efficiently and smoothly. These cannabis-friendly partners can take care of payroll management, federal and state payroll tax filing, quarterly reporting, workers’ comp reporting, tax deductions, and other procedures. This comprehensive support gives your employees more security while also facilitating your payroll processing and keeping your business above board.
Green Leaf Payroll & Business Solutions eliminates the obstacles usually associated with running a cannabis company. We cater to the professionals in the cannabis industry by facilitating their banking and payroll procedures. We’ll streamline your financial operations and keep them compliant with relevant regulations. In addition, our team will take your HR duties off your hands.
By partnering up with us, you will get more flexibility, versatility, and security in your banking, letting you focus on expanding your business and building your reputation. Your team will feel appreciated and motivated to pull their weight. Contact us today to do away with the common impediments plaguing this high-risk industry. We’ll help you grow your brand and establish yourself as a market leader!