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Even in states where cannabis is legal, many cannabis-related businesses still encounter payroll and banking challenges. Finding the right cannabis-friendly payroll vendor can remove a huge burden from those businesses in terms of operational efficiency and legal compliance.
Even in states where cannabis has been fully legalized, state and federal restrictions still create numerous payroll and banking roadblocks for growers, dispensaries and other cannabis-related businesses. Because of all of these headaches, many businesses have to process payroll by hand and pay employees with cash.
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Finding a cannabis-friendly payroll vendor can save businesses hundreds of hours a year and minimize their compliance risk. However, most cannabis businesses struggle to find the right provider.
Since cannabis is still federally illegal, most national payroll companies will not work with companies in the cannabis industry. However, there are a few vendors who have developed compliant banking relationships allowing them to work with cannabis companies.
Before reaching out to the vendors listed below, speak to an OutSail advisor who can guide you to the right vendors for your needs. Your OutSail advisor will also create a free vendor report comparing the leading cannabis-friendly payroll & HRIS companies. These vendor report will give you insights into each vendor's average customer size, price point and biggest flaws.
As of October 2021, these are the leading companies in the cannabis-friendly payroll space:
Kronos is the developer of Workforce Ready, an enterprise-grade HRIS platform that is especially strong in workforce management. Workforce Ready is a competitive peer with ADP Workforce Now, Ceridian Dayforce and UltiPro (now called UKG Pro). However, what makes Workforce Ready unique is that you can buy it through resellers.
There are two Colorado-based companies that are Workforce Ready resellers and have developed cannabis-friendly banking relationships to allow them to service the cannabis industry.
Evolve HCM was born out of one of the largest and most established Kronos resellers in the industry. Their team has over 10 years of experience in reselling and servicing the Workforce Ready platform, and they provide a high degree of service and knowledge when it comes to implementing the platform.
Wurk was the first major vendor in the cannabis-friendly payroll space. Due to their first-to-market advantage, they have the largest customer base within the cannabis industry.
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Both Ascentis and Zenefits make their payroll modules optional, which allows their teams to remove payroll from a project scope and substitute the payroll piece in with a cannabis-friendly payroll partner. This allows businesses to leverage their full suites of HR tools, while still working with a cannabis compliant payroll vendor.
Ascentis is a mid-sized provider of HRIS and payroll tools. They aren't as big as the ADPs of the world, but have a great niche working for companies that care about high quality support and strong time & attendance tools. Ascentis does not manage the payroll processing themselves, but can bring in a cannabis-friendly partner.
Zenefits is a sleek, intuitive HRIS platform that is designed for the modern workforce. Their HRIS covers most, but not all, HR-related functionalities with ATS and Learning being the only major gaps. Similar to Ascentis, they do not process payroll for their cannabis clients, but have a preferred partner who they can leverage in those areas.
Blog: How Long Does it Take to Buy and Implement a New HRIS
PEOs are often a great choice for businesses that have very lean HR teams and need a high degree of support when it comes to processing payroll and managing compliance. Because of all of the outsourced services that PEOs provide, they are typically much more expensive than a standalone software solution, so they aren't a fit for every business
AdaptiveHR is a spin-off division of Resourcing Edge, a large national PEO firm. Adaptive is based out of Boston and services cannabis clients across the country. Adaptive utilizes PrismHR as their HRIS technology, which is a standard offering in the PEO space and one that can provide some scalability and flexibility.
MAS is another PEO provider that is cannabis-friendly. Unlike AdaptiveHR, MAS is only available to companies headquartered in Colorado. They are also resellers of PrismHR for their HRIS technology.
Gusto is a modern leader for companies who are looking for payroll and HR but don't want to get stuck with the ADP's and Paychex' of the world. Gusto offers standard HR and payroll functionality and backs it up with high quality support. They can also provide outsourced HR services for companies that have lean HR teams. Gusto's user experience is highly modern and easy-to-use
Gusto Reviews - Pricing, Pros/Cons, User Reviews
Payroll Systems has been a reseller of PayEntry's HRIS technology for almost 20 years, and recently developed the ability to service cannabis clients using PayEntry's technology and Payroll Systems' service model.
Cannabis-friendly HRIS and payroll solutions have come a long way in the past few years, providing businesses with options to outsource their payroll-related needs or find software to do it all. The key is determining what functionality you need, what level of support you require, and how much you are willing to spend on the solution. Businesses can find a solution that works best for their specific needs by looking into a few of the above options. With the right HRIS and payroll partner, companies can have peace of mind knowing that they comply with all cannabis-related laws and regulations while still providing high-quality service to their employees.
A: Yes, most software providers offer quick implementation timelines. Your specific timeline will depend on the size of your organization, but it can typically be completed in 6-8 weeks.
A: It depends on the complexity of your organization. If you have a complex structure or multiple locations, bringing in an HR consultant for additional support may be helpful.
A: Many providers offer additional services such as employee onboarding, attendance tracking, time & attendance systems, leave management, and more. Make sure to ask your provider about any additional services they may offer.
A: Yes, all providers mentioned in this article have certified compliance with federal and state laws about the cannabis industry. Most providers also offer additional compliance support for specific states and localities. Be sure to inquire about this when selecting a provider.
A: Most software providers use secure encryption technologies and robust data security protocols to protect sensitive information. Ask about a provider's data security measures when selecting your HRIS and payroll solution.
A: Most providers offer data migration services to help you transition your information from one system to another with minimal disruption or effort. Be sure to inquire about this service when selecting a provider.
