Top Payroll Companies for the Cannabis Industry

Top Payroll Companies for the Cannabis Industry

Despite the regulatory roadblocks for cannabis in the United States on a federal level, the industry continues to show impressive growth. According to some estimates, revenue in the US cannabis market is set to reach nearly $43 billion this year, nearly double the amount earned in 2020.

Cannabis businesses require the same professional support and financial solutions available for other industries to ensure efficient operations, regulatory compliance, and sustainable growth–such as payroll processing providers. Especially as the industry grows and more cannabis businesses enter the market, the need for these services will only increase.

However, the industry’s complex regulatory environment means these companies need a specialized payroll provider who can help them efficiently pay employees while navigating the varied compliance and tax requirements they face from state to state.

Below, we’ll discuss when cannabis companies might decide to upgrade their payroll processing systems, what to look for in a payroll provider, and highlight the top options with proven track records serving the industry.

Table of Contents

Top Payroll Companies for the Cannabis Industry
When to Consider Payroll Automation
PEOs vs. Outsourced Payroll Solutions
What to Look for in a Payroll Provider

When to Consider Payroll Automation

Like any other industry, cannabis companies must ensure their employees are paid accurately and on time.

This might be easy enough to manage when you have just a handful of employees at one location. However, efficiently processing payroll becomes much more complicated as you expand your business and open up new locations, hire more employees, and face a growing administrative burden from other areas like recruiting and hiring new staff, developing talent, scheduling employees, and more.

At the same time, cannabis businesses face additional complexities based on how they classify workers as either employees or independent contractors, which can impact how they structure compensation and handle payroll taxes.

Companies cannot let payroll processing slip through the cracks, no matter how complex it might become. Workers expect regular paychecks with their wages correctly calculated, and anything less could put the company at risk of noncompliance issues and costly penalties, fines, or other legal consequences.

Thus, cannabis companies of any size might consider implementing an automated payroll processing solution that calculates employee wages, sends direct deposits according to their pay period, and tracks and submits relevant tax filings on behalf of the business.

PEOs vs. Outsourced Payroll Solutions

When considering payroll solutions, cannabis companies often weigh the benefits of Professional Employer Organizations (PEOs) against outsourced payroll services. A PEO offers co-employment arrangements where the PEO becomes the employer of record, while outsourced payroll services involve contracting a third-party provider for payroll processing and management.

“PEO models are typically better suited for small companies who have less internal resources to manage HR related issues . However, as companies surpass 30 employees, PEOs may become less efficient and more expensive.The PEO cost structure, either a percentage of payroll or a per-employee fee, escalates as the business grows. This increase in costs typically outweigh the level of service and benefits provided by the PEO”

-Denise Gelfand, EVP of PostPEO, A Leavitt Group Company

Alternatively, outsourced payroll solutions offer automated processing, tax filing, and compliance support, catering to businesses of varying sizes.

What to Look for in a Payroll Provider

Cannabis companies are often subject to greater regulatory scrutiny than other types of businesses, so they have unique needs when selecting an automated payroll solution.

Here are some of the things to look for when choosing a cannabis payroll provider:

• Industry expertise: Cannabis companies should seek out a provider that has practical experience working within the industry, and a successful track record of helping these businesses meet compliance requirements
• Compliance focus: Payroll providers need to be familiar with the regulatory landscape of the cannabis industry and offer specific features to help companies meet these standards, such as 280E tax compliance, tracking employee hours by the correct classification, and payroll tax support.
• Additional services: Even if a cannabis company is only seeking out a payroll provider, it can be helpful to find a solution that offers additional business support services to streamline other HR functions as they scale, including a time-tracking system, scheduling program, benefits administration, etc.
• Cost-effectiveness: Find a provider that fits within your budget and makes sense financially, specifically looking out for any general payroll processing companies that charge cannabis companies more than other types of businesses.
• Innovation: The cannabis industry is still in its early stages, so look for a provider that constantly innovates and adapts its solution to meet the current needs of cannabis companies and the latest regulatory developments.

Top 7 Established Cannabis Payroll Providers

Every cannabis company that decides to implement a payroll processing solution will need to research the available options to find the right provider for their unique needs.

Not every payroll provider on the market is uniquely equipped to support the cannabis industry, though the following list showcases the top solutions offering payroll processing support for these companies.

1. Paypro (Outsourced Payroll)

Paypro is a workforce management solution that offers dedicated support teams for HR, tax compliance, benefits, and outsourced payroll processing for various industries, including cannabis. The company was founded over thirty years ago by a licensed CPA, so Paypro was specifically built to support accuracy and legal compliance in complex business situations.

Paypro is known for its industry-leading customer service and knowledgeable staff, offering a level of human touch that most modern payroll processing providers lack. The team offers customized payroll solutions to fit each company’s unique needs, with regular audits to ensure accuracy and compliance, robust reporting, convenient mobile access, and timely tax filings and direct deposits.

Pros

• Industry-specific compliance support
  Paypro is knowledgeable and experienced with the intricacies of cannabis payroll processing. The team offers industry-specific compliance support and guidance regarding Section 280E of the IRS Code.
• Built-in time tracking and attendance
  Paypro offers a built-in time tracking and attendance system to support accurate and timely payroll processing.
• Accurate payroll processing that catches errors before they happenCannabis companies can streamline operations by outsourcing their payroll processing to Paypro, including the automation of all tax filings and direct deposits, and take advantage of Paypro’s proprietary AI Command Center to catch errors before they happen.“The payroll process is easy to follow step by step. Assistance is always prompt when required. Using Paypro’s services has allowed our company to complete our payroll processing in a more timely manner.”

  – Diane L., G2

Cons

• In-depth Implementation & OnboardingSetting up a well architected HR foundation for your organization takes some time to do correctly Personal account managers and subject matter specialists help clients through that process, which adds a tailored and human approach, but it also necessitates some upfront coordination for businesses who might want to get up and running swiftly. Some software vendors will hand you the keys day 1, Paypro works with you in collaboration to make sure the system is customized to work for you and your organization efficiently from day 1.“I think overall it took me a bit of time to fully understand the breadth of their solution, so simplifying parts of the implementation process (but, it’s tough since they do quite a bit).”

  – C-Level Executive, TrustRadius

2. Gusto (Outsourced Payroll)

Gusto is a comprehensive platform that helps companies at all stages of the employee life cycle, including onboarding, talent development, benefits administration, and payroll. Gusto serves several industries, though they offer a dedicated payroll solution for cannabis companies.

With Gusto’s payroll solution, users can run payroll multiple times per month, and all payroll data is synced with benefits, time tracking, workers’ comp, and attendance records for accuracy and compliance.

Pros

• Dedicated compliance support
  Gusto offers industry-specific support to help users navigate the compliance requirements cannabis companies must meet when processing payroll.
• Employee self-service portal
  Employees can access payroll data, tax forms, and other information through a mobile-friendly self-service portal.
• Automatic tax filingThe platform will automatically calculate and file local, state, and federal payroll taxes on your behalf.“Gusto provides ongoing and immediate support for all of my payroll needs. If I ever need assistance, it is seamless and easy to contact the support team and also easy to get updates.”

  – Ameena S., G2

Cons

• Only the Premium plan is availableGusto generally offers three different tiers of service, though they require all cannabis businesses to use their highest-tier Premium plan, citing the heightened regulatory scrutiny associated with the industry.
• Slow customer service responsesA number of Gusto users call out slow response times and inadequate support from the customer service team.“The customer service experience was less than ideal, as I was passed between agents and received conflicting information regarding Gusto’s capabilities…”

  – Jennifer S., G2

3. UZIO (Outsourced Payroll)

UZIO is an integrated platform that helps companies manage payroll, benefits, and HR matters. While other payroll providers on this list lean on the human expertise of their teams, UZIO leverages artificial intelligence (AI) and machine learning (ML) technologies to offer users flexible, real-time assistance and business insights.

The provider offers a dedicated cannabis payroll processing solution to help businesses meet compliance requirements and automate state and federal tax payments.

Pros

• AI assistant to support payroll tasks
  The UZIO AI Copilot feature offers personalized support and helps users streamline payroll processing for better accuracy and efficiency.
• Cannabis industry experience
  UZIO has hands-on experience processing payroll for cannabis companies, offering specific insights and guidance that these companies require.
• Affordable pricingPrices for UZIO’s payroll solution are transparent and affordable, which includes unlimited payroll processing, two-day direct deposits, benefits sync, and automated tax filings.“I recommend anyone who is in need of a great payroll and benefits provider seeking an affordable rate but effective service to sign up and use Uzio.”

  – Alander P., G2

Cons

• Short time on the marketUZIO is a newer provider in the industry, so they don’t have the long tenure and established reputation that many other providers on this list have.
• Mobile version needs improvingSeveral UZIO users expressed that the mobile version of the site could be improved to be more intuitive and easy to use.“I wish the app was more user-friendly and allowed for more features. I would like to see the company connected more through profiles, graphs, mission statements, etc…”

  – Anna D., Capterra

4. PeopleGuru (Outsourced Payroll)

PeopleGuru is an HR and payroll software that has dedicated solutions for the cannabis industry. They also offered managed services for payroll and benefits, allowing growers, dispensaries, and processors to outsource these time-intensive workflows to experts.

Their payroll software solution allows companies to set up autopay, run dozens of payroll reports, and ensure wages are calculated accurately to ensure compliance with federal and state laws. Their comprehensive HCM solution includes many other features that cannabis companies can take advantage of, such as performance management, team scheduling, job board integration, applicant tracking, and more.

Pros

• Automated payroll processing
  The platform’s automated payroll solution helps cannabis companies save time on manual calculations, deductions, remittances, and tax filings.
• Cannabis industry experience
  The team has worked with a number of cannabis companies over the years, with the knowledge and expertise to offer tailored solutions for the unique needs of the industry.
• Dedicated point of contactPeopleGuru assigns each company a dedicated HR expert to offer personalized support and guidance when needed.“PeopleGuru has streamlined a lot of my payroll processes, and it is nice that the timekeeping registers automatically for employees.”

  – Sierra M., G2

Cons

• Reporting troublesSome users explain the reporting feature can be glitchy and hard to navigate properly.
• Interface improvements neededA number of users explain that the interface could be made more intuitive and easy to use, and there’s a learning curve to get started on the platform.“The system could be more robust. I would like more variety of reports. Their platform is pretty new compared to others, so I’m looking forward to them building out more features.”

  – Kathleen P., TrustRadius

5. Inova (Outsourced Payroll)

Inova offers a comprehensive HR, payroll, and benefits solution for a number of industries, including cannabis. Specifically, their payroll system helps cannabis businesses automate employee payments, reporting, and tax filings for reliable and accurate payroll processing.

They provide industry-specific payroll support for cannabis companies, including 280E labor deduction management, flexible pay rules, and more. In addition, they offer compatibility with various POS systems and timeclock options for seamless integration with the cannabis company’s existing tech stack.

Pros

• Tailored to the cannabis industry
  Inova has built custom solutions around the unique compliance and tax requirements cannabis businesses face when processing payroll and handling other HR matters.
• Integrated platform
  The Inova platform is comprehensive and supports the management of several critical HR functions, not just payroll.
• Multi-location supportCannabis companies with multiple locations can use Inova as an integrated solution for managing payroll from one centralized account.“We previously processed payroll in-house. The peace of mind knowing that our payroll taxes, W-2’s, and employee records were being managed by the professionals at Inova has been invaluable.”

  – Danielle M., G2

Cons

• Pricing is not transparentInova does not offer pricing for its solution publicly on its website, which can make it more difficult to determine if it fits within your budget.
• Complicated customizationSome users report the robust customization capabilities of the platform can make it cumbersome to navigate.“Sometimes the overly customizable factors make it complicated to operate. Since customizations can be overly complicated, updating the system can become a hassle.”

  – Ka’iulani T., G2

6. AllianceHCM (Outsourced Payroll)

Alliance HCM is a US-based human capital management (HCM) system serving businesses in the cannabis industry and several others. As part of their comprehensive HR system, AllianceHCM helps users pay employees accurately and on time, and calculate and submit federal and state tax filings.

They are a compliance-minded payroll provider and even offer an accuracy guarantee, meaning they will pay any penalties or interest incurred as a result of their errors.

Pros

• Access to dedicated experts
  AllianceHCM users have access to dedicated support specialists to help with payroll and compliance matters.
• Additional support services
  The payroll system easily integrates with AllianceHCM’s other services to help cannabis companies streamline operations, including talent acquisition, benefits administration, employee performance tracking, and more.
• Built to scaleThe AllianceHCM platform is designed to grow with your business as you scale so they can support the payroll needs of cannabis companies at any stage.“This is a product I use daily. I have used other products for payroll and the ease of use of Alliance HCM is a huge reason I am still using the product.”

  – Erin, Software Advice

Cons

• Lack of support resourcesSome users express the need for more help guides and resources for users to reference when they need basic support or troubleshooting.
• No price transparencyYou cannot find pricing for the Alliance HCM platform available on their website, so you will likely need to meet with a sales rep to get a custom quote.“I wish Alliance had a more robust user guide in the system. Some items are covered in the help section, some are not. I think a better guide with more detail could help cut down on customer support calls/emails.”

  – Heather, Software Advice

7. Greenleaf HR (PEO)

Greenleaf HR is offering regulation-focused HR and payroll solutions. By placing an emphasis on payroll management, tax services, and regulatory adherence, Greenleaf HR endeavors to support dispensaries in navigating the complexities of the ever-changing regulations in the cannabis landscape with practicality and reliability.

Pros

• Regulation Compliance Support:
  Greenleaf HR specializes in the cannabis industry, ensuring that dispensaries remain compliant with both state and federal regulations, which is crucial in this heavily regulated sector.
• Payroll and Tax Services at the Touch of a Button
  The software simplifies the complex processes of payroll and tax services, allowing dispensaries to focus more on their core business activities without the hassle of administrative burdens.
• Time and Attendance Tracker Integration
  Integration with a time and attendance tracker streamlines workforce management, saving dispensaries time and costs associated with manual tracking and management.
• Dedicated HR Support

Greenleaf HR offers unlimited and dedicated HR support, providing expert advice and guidance on HR-related matters, which is invaluable for businesses navigating the complexities of the cannabis industry.

Cons

• No POS Integration
  The lack of integration with Point of Sale (POS) systems may limit dispensaries’ ability to efficiently measure sales versus labor, potentially impacting their ability to optimize operations and profitability.
• Limited Health and Retirement Benefits
  Compared to some other payroll solutions, Greenleaf HR may offer fewer health and retirement benefits for employees, which could be a drawback for dispensaries aiming to attract and retain top talent.
• White-label platform

The use of a white-labeled platform from another vendor may result in delays in addressing customer requests for changes and enhancements, potentially impacting the software’s agility and responsiveness to clients’ evolving needs.

Top 5 Up-and-Coming Cannabis Payroll Providers

Newer cannabis payroll companies are always coming to market. The following options are amongst the most distinguished in that crowd. As companies earlier in their evolution, customer feedback and online reviews for their services are limited, but these options make top contenders for dispensary payroll providers.

1. Paragon (Outsourced Payroll)

Paragon Payroll is a specialized platform designed specifically for the cannabis industry, offering comprehensive HR, payroll, and compliance solutions. It integrates with POS and seed-to-sale systems, ensuring businesses stay compliant with ever-changing regulations. Paragon provides a seamless, user-friendly experience for managing payroll, timekeeping, and HR tasks, backed by a network of partners offering additional benefits like group health and 401(k) programs.

Paragon’s cannabis-focused approach makes it ideal for dispensaries and related businesses, though its availability may be region-specific. The company prides itself on extensive industry experience, robust compliance features, and a commitment to personalized customer support, although feedback shows some variability in support quality.

1. Evolve HCM (Outsourced Payroll)

With a dedicated team of cannabis payroll and HR professionals, Evolve HCM ensures that businesses have the expertise and support they need to thrive. From payroll processing to compliance management, Evolve HCM streamlines operations, simplifying workforce management for single and multi-state operators alike.

Their comprehensive suite of solutions includes cannabis recruitment, onboarding, benefits administration, time and labor management, scheduling, talent management, analytics, and more. By leveraging Evolve HCM’s software, cannabis businesses can optimize their operations and stay ahead in the competitive landscape of the industry.

1. WURK (Outsourced Payroll)

Wurk offers seamless integration with workforce management systems, automated payroll calculations to minimize errors and save time, and stays updated with the evolving cannabis regulations to ensure compliance with local and federal laws. Additionally, Wurk Payroll provides an employee self-service portal for convenient access to payroll information and other HR-related data.

While Wurk Payroll’s specialized solutions offer significant benefits for cannabis businesses, some limitations include potential availability restrictions in specific states or regions and reported issues with customer support response times. Additionally, the platform’s use of a white-labeled platform from another vendor may lead to delays in addressing customer requests for changes and enhancements.

1. Green Leaf Business Solutions (Outsourced Payroll)

Green Leaf Payroll & Business Solutions specializes in providing outsourced cannabis HR consulting, payroll compliance services, timekeeping, applicant tracking, and benefit administration solutions. While focusing primarily on the cannabis industry, Green Leaf serves a diverse range of industries, ensuring compliance with local, state, and federal laws. Their comprehensive suite of services includes marijuana HR consulting, payroll compliance, tax reporting, and efficient banking solutions designed to enhance businesses’ operations.

Green Leaf differentiates itself by offering fully customizable business solutions tailored to meet the unique needs of each client. With a client retention rate of 99%, they prioritize attention, care, and professional commitment to ensure client success. Their team boasts a minimum of 10 years of experience in providing cannabis HR consulting services and payroll management, positioning them as a proactive resource with a highly directive process for clients across various industries.

1. Adaptive HR (PEO)

AdaptiveHR offers a range of services including payroll and tax administration, benefits management, and risk compliance. The platform is designed to ensure that cannabis companies remain in compliance with state and federal regulations, particularly in the areas of payroll processing and benefits administration. With a team of experts guiding businesses through complex compliance issues, AdaptiveHR acts as a reliable partner in navigating the regulatory landscape of the cannabis industry.

In addition to payroll and compliance support, AdaptiveHR offers access to enabling partners, providing businesses with a network of industry supporters and advocates to help them stay compliant and competitive in the market.

Selecting the Best Cannabis Payroll Processing Partner

All businesses need to process payroll in an accurate and timely manner. In the cannabis industry, this is even more critical since it is so heavily regulated.

For these reasons, cannabis companies of any size can benefit from partnering with a payroll provider to help them meet compliance standards, accurately calculate wages, and pay workers on time.

Each business needs to consider their needs, budget, and preferences before they start looking for a provider, though many turn to Paypro as a trusted and reliable payroll partner.

We handle all payroll tasks and responsibilities for cannabis companies, ensuring prompt tax filings and direct deposits to help clients streamline their operations and have more time to focus on growing their business.

Going one step further, we offer additional solutions to support hiring and onboarding, employee benefits management, time and attendance tracking, and more to streamline key HR processes.

Request a demo of Paypro today to see how our platform can simplify your payroll and compliance processes.

About the Author

Kayla is the Marketing Manager at Paypro Corporation overseeing all inbound and outbound marketing and sales efforts. She has 7+ years of experience working within the B2B and SaaS based solutions space and thrives on creating messaging and campaigns that introduce products and services to those who need them most.

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