The cannabis industry has grown tremendously since 2012 when Colorado and Washington first broke the barrier of legalized recreational cannabis.
When that barrier first broke, it created a whole new industry and a wide array of new business opportunities in cannabis. This also brought with it a whole new set of challenges and responsibilities in operating a cannabis business.
This resulted in vendors sprouting up left and right to handle these operational challenges and opportunities for this new type of clientele. Payroll and HR was one of these areas, but as a result of banking issues, cannabis business owners had limited choices in choosing a provider in this area.
Cannabis Payroll Landscape Today
However, today there are many cannabis payroll software options out there, and many payroll and HR providers who have broken into the cannabis space. There are also many providers who have left the space, again, due to the complexities and challenges of serving the industry.
For that same reason, it's important for cannabis businesses to realize that just any provider isn't going to cut it. Employers need to understand how to choose the right cannabis payroll company, and when it's time to find a new one.
This article will discuss some of the most common reasons to change payroll and HR providers in the cannabis industry.
Reasons to Switch Cannabis Payroll Companies
Cannabis companies shouldn't have to sacrifice anything when it comes to their payroll and HR software and / or the level of service they receive. Businesses should generally never feel stuck with their current cannabis payroll company or like there is nowhere else to go.
Some common reasons cannabis businesses look for a new payroll provider include challenges with accessing certain reports and exporting payroll and HR data and analytics, as well as outgrowing their current system or provider.
However, there are five core reasons to look for a new payroll provider that every cannabis business should always be evaluating:
- Poor User Experience
- Lack of Features, Capabilities, or Updates
- Lack of Integration Capabilities
- Inadequate Service or Lack of Payroll / HR Expertise
- Inaccurate Payroll or Payroll Tax Filing
Here are some of the top reasons to find a new cannabis payroll company:
Poor User Experience
Like many other types of businesses, cannabis organizations have a variety of different roles each with their own daily tasks, responsibilities, and needs when it comes to payroll and HR.
The Problem: Many cannabis payroll providers lack the skills and expertise to be able to tailor a thoughtful user experience based on roles for each level of your organization. This causes headaches for all levels of your organization. Employees may feel helpless and unable to find what they are looking for and end up bogging down management and administrators with questions that would otherwise be unnecessary with the right solution and provider. While managers and administrators take that much longer to get even the simplest tasks done or are stuck looking for information or reports that should be easily accessible.
What to Look For: Businesses should find a cannabis payroll company that can tailor their human capital management (HCM) solution so that each role within your organization can find everything they need right from one central location, allowing them to find what they are looking for and complete tasks quickly and efficiently.
Lack of Features, Capabilities, or Updates
Not just specific to the cannabis industry, many companies, especially those with big-box providers, end up being stuck with the exact same solution they had when it was first implemented by their provider.
The Problem: Does your system still look the same as it did 2 years ago? It shouldn’t. Technology is continuously evolving, and that goes double when it comes to cannabis HCM software. New features and tools are always being released. If your cannabis payroll company isn't keeping you and your solution up-to-date, then not only are you not using your system to its full potential, but your provider isn't doing their job.
What to Look For: It shouldn't be left up to you to go to your provider to stay up-to-date with new features, user experience updates, solutions, and more. Businesses should find a cannabis payroll company that proactively keeps their solution up-to-date and tailored to the evolving needs of your business, so you can continue to grow.
Lack of Integration Capabilities
Every company is different, and each requires unique tools to solve their organizational challenges. That goes for any industry. However, with cannabis being as unique as it is, the list of unique needs when it comes to payroll, HR, and workforce management is extra long. That's when integrations come in to play.
The Problem: Many providers out there have limited software capabilities, especially when it comes to integrations. Add in unique integration needs, such as integrations with cannabis POS systems (point of sale), and suddenly many providers are unable to provide you with everything you need. But just because one company tells you it's not possible, or that they can't do it, doesn't mean you should have to settle for not having that need satisfied.
What to Look For: Cannabis businesses should find a provider with excellent service and a commitment to getting your system set up exactly how you need it. Even if the system can’t do it natively, your provider should be willing and able to find a way to accomplish what you are asking for. Customization of your solution should be a priority given your unique industry,
Inadequate Service or Lack of Payroll / HR Expertise
Another challenge that extends to all types of businesses when it comes to payroll and HR, is a lack of support, service, and expertise from your provider.
The Problem: It shouldn't be an issue, but it is. Many cannabis payroll companies don't offer the support system that cannabis businesses need. And many of those that do, don't have customer support teams or representatives that are experienced enough to provide you the help you need. Whether it's smaller providers who aren't experienced enough in the cannabis space or big-box providers with reps who have less payroll and HR experience than your own team, neither should be acceptable.
What to Look For: Cannabis organizations should try and find a provider who specializes in and has specialized in cannabis payroll and HR for quite some time. They should find a cannabis payroll company with a support team in place that not only has been working in the payroll and HR industry for years, but has extensive background in cannabis business requirements, such as understanding things like 280E compliance and cannabis banking relationships.
Inaccurate Payroll or Payroll Tax Filing
When outsourcing payroll, one thing should always be present - accuracy. Accurate payroll and payroll tax filing is the top requirement from your provider.
The Problem: With newer payroll companies that started in the cannabis industry, in a lot of cases they don't have the proper checks and balances in place to ensure accurate tax filing. And with existing payroll companies that expanded into the cannabis industry, oftentimes they're putting a new banking relationship in place. Doing so requires an additional / new set of checks and balances in place for this subset of clients. In either scenario, it opens up cannabis companies to issues or inaccuracies with payroll tax filing.
What to Look For: In an ideal world, you would be able to find a payroll company that has existed prior to the cannabis industry coming to fruition and has been servicing cannabis clients for at least 5 years. This would help ensure that they had both sets of checks and balances in place for quite some time. It would also be helpful to check references or reviews online to ensure you're not seeing customers posting about tax filing or other issues.
Finding the Right Cannabis Payroll Company
It's important to evaluate your current payroll and HR vendor if you are experiencing any of the above challenges. You're in a cutting-edge industry, and you deserve the best possible HCM solution and partner available to you.
It's time to stop making sacrifices.
Contact us today to learn more about how Evolve HCM can help solve your business challenges and more.
Going Beyond Cannabis Payroll Solutions
Looking to learn more about cannabis payroll and the cannabis industry? Businesses can check out these cannabis industry statistics as well as common cannabis payroll questions, and more, by checking out our blog.
In addition to payroll, human resources is just as important and can be just as complicated for the cannabis industry. Businesses should also make sure they understand how to choose the best cannabis HR software.
