In 2021, one of the major challenges for cannabis dispensaries is to opt for a reliable and robust payroll management solution for their employees. Although most U.S. states have recently legalized the sale of recreational cannabis products, retail dispensaries still must navigate changing market dynamics and cannabis regulations to operate legally within the state and federal mandates.
Payroll solution is one of the elements that make a cannabis dispensary thrive in a competitive landscape. Of course, continuous banking partnership allows cannabis businesses to achieve a high success rate.
But it is no secret that banks in the US are reluctant to offer their services to cannabis businesses. Often, choosing a payroll solution can determine the success or failure of a cannabis business. An ineffective payroll solution can impact the operations of cannabis businesses and even tarnish market reputation.
Like other businesses, it is vital for cannabis dispensaries to categorize their employee roles and positions in different criteria. For starters, consider the behavior, relationship, and financial parameters as your main criteria to classify your employees.
The behavior donates the performance of employees, finance hints at the required resource to complete the tasks, and relationship can involve rewards including benefits or bonuses that appreciate the ongoing commitment of employees that work long hours.
For instance, most cannabis dispensaries employ employees and independent subcontractors. In this case, you can assign subcontractors and employees in separate groups to make your payroll process highly efficient.
Flexibility to Pay Your Cannabis Dispensary Employees
If you want to make your payroll solution effective and flexible, make sure to set a proper pay structure for each week or month. And do not forget to take out relevant taxes and then organize your payroll. Since employees can be expensive, cover workers’ compensation, employment training tax, payroll-based processing fees, unemployment insurance, and Medicare expenses on top of wages and salaries.
You should also file payroll and tax reports for each quarter. As a result, it would make it easier for you to process accounting expenses in other similar reports. For the sake of simplicity, make sure not to classify your employees as contractors in 1099 form. The major consequence of misclassifying employees is that it may draw the attention of the Department of Labor.
How Cannabis Dispensaries Can Step Up Their Payroll
Before you consider a payroll solution, make sure to use a modern and advanced payment processing system for cannabis transactions. Whether you run a new or established cannabis dispensary, follow the best industry practices to choose a compact payroll solution.
Below, Paybotic will explore how cannabis dispensaries can pay their employees without banking services:
Choose a Trusted and Professional HR Partner
It is essential for cannabis businesses to do extensive research when choosing qualified HR and banking partners. You do not have to partner with the most expensive or most affordable payroll management company. Instead, seek out the expertise of an industry expert first and find a payroll solution that can work for your business model and operational standards.
Also, choose an HR partner that will not cancel the partnership in a few years, but also not lock you into long-term contracts. Follow the lead of cannabis market leaders and partner with a payroll and HR firm that understands the technical and opportunities associated with the cannabis industry.
Understand Business Taxes
Taxes are straightforward when you review them through the lens of personal expenses. However, businesses taxes can take different shapes and exist within complicate business processes. Take the time to review how different taxes may apply to your cannabis dispensary and how you can minimize the overall impact within compliance.
Learn About Federal and State Laws
There are extensive legal procedures associated with the cannabis industry. Your objective should be to contextualize state and federal laws that might impact your business operations. Limit the overwhelming information and focus on your state and city requirements. For instance, you can start with workers’ compensation and study because it is mandatory for all businesses that operate in the U.S.
Partner with a Financial Institution
It is not easy for cannabis businesses to count on a reliable credit union or a bank. The search for credit unions, banks, and other financial institutions that accept cannabis businesses as their customers remains difficult.
The good news is that financial institutions supporting cannabis business operations continue to increase each year. Many credit unions and banks have reassessed their willingness to work within volatile industries and now accept cannabis dispensaries as clients in 2021. Opt for a financial institution that offers you accurate forecasts, extensive data, and information about changing cannabis trends.
Partner with Paybotic Today to Get Help a Cannabis Bank Account
Similarly to opting for a versatile payment solution rather than a cash-based option, cannabis businesses should choose a digital payroll solution to distribute salaries and wages to their employees. Ideally, the best approach for cannabis dispensaries would be to choose a merchant account that supports payroll services. Set a high bar and choose a payroll solution with high reliability and ease of implementation among employees.
With Paybotic, you can learn more information about how dispensaries operate with banking sector’s support. Our resources will help you learn more about our solutions and how they allow clients to maintain a competitive edge.