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.
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
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.
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.
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:
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.
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
Cons
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
Cons
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
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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
Cons
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
Cons
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
Cons
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
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
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.
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.
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.
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.
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.
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.
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.
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.