There are now more than 211,000 full-time, legal cannabis jobs in America. That is more cannabis professionals than dental hygienists! Just like every other industry, those workers have to be paid and business owners have to file federal and state taxes. The Colorado cannabis industry comes with unique challenges and payroll solutions cannot be grafted onto the industry and be successful. Colorado dispensaries need a trusted payroll partner to remain competitive. A payroll company that understands the industry and has a track record of serving cannabis businesses. Below, we explore four payroll challenges that our customers experience and compare two payroll companies that offer different solutions.
Challenge One: Running payroll for a cannabis business with salaried and hourly employees
Like everybody, cannabis employees depend on the consistent arrival of their paycheck. Dispensary payroll may be challenging for Colorado HR departments because there can be many types of workers to track and pay. Smaller businesses might only have salaried managers and hourly employees. Larger integrated operations may need to pay these employees as well as contractors, such as trimmers being paid by the pound and strain they are cutting.
If either of these scenarios sounds familiar, it is important to choose a payroll that is automated and reliable no matter what. Most payroll software will automatically calculate pay, and file your federal, state and local payroll taxes, as well as W-2s, 1099s and new hire forms.
Best Colorado dispensary payroll software for 1-100 employees
Gusto is ideal for smaller businesses that plan to operate in only one state. Gusto’s payroll has all the functionality to pay both W-2 and 1009 employees, as well as run unlimited payrolls for clear pricing. Additionally, Gusto makes it easy to remain compliant with a Flowhub integration.
Best Colorado dispensary payroll for 100+ employees
PeopleGuru is ideal for more complex payroll situations, for example across multiple states with both contract and salaried employees. They also offer an applicant tracking system feature. PeopleGuru also offers long-term payroll banking solutions so cannabis businesses can get secure ACH files for direct deposit and check printing and distribution services.
Challenge Two: Multiple Employee Identification Numbers
A further consideration about the structure of the company is how many Employee Identification Numbers (EINs) it needs. Most Colorado dispensary owners will need to file for an EIN because this is like a social security number for all applications and legal documents. If you already have a license or the business is in full swing, likely you are familiar with EINs.
If the Colorado business also operates in multiple states, or if you are planning to open a location in another state, consider the implications for running payroll. Multi-state operations may mean having multiple EINs. With payroll designed for smaller operations, like Gusto, the only way to create a new business and run payroll within their systems are if each new company has its own unique EIN. This can be a headache for the HR department because it means going into each EIN to run payroll separately. Therefore, Gusto is ideal for Colorado businesses with only one EIN. PeopleGuru, because they are designed for larger, multi-state operations, has a workaround for this challenge.
Challenge Three: Providing benefits through a new or existing provider.
During the lawless days of the market marijuana, cannabis in Colorado was not like an everyday job. But with business access to banking, and cannabis-friendly insurance brokers and financial advisors, business owners are now able to offer benefits. Not only is this a reality, but it is fast becoming part of what improves employee retention in this industry. Insurance and 401(k) brokers that are transparently serving the industry are becoming prevalent.
If you are looking for HR software for the first time, it is important to consider what types of benefits package you can offer through the provider. Both Gusto and PeopleGuru offer excellent benefit options. With Gusto as the broker, they manage ACA reporting, all open enrollment, benefit changes, and Cobra.
If your company is switching HR and payroll software, consider if you want to keep your current broker. With Gusto, they will manage the employee payroll deductions for health insurance, but not the open enrollment and benefits changes. PeopleGuru has the option to allow companies to keep their current benefit providers, if they so choose.
Challenge Four: Keeping pace with plans for growth
Growth can look many different ways for each business, some plan to expand within one location and others plan to expand across multiple locations. Whatever growth looks like, payroll software should support the expansion of Colorado dispensaries and not act as a stumbling block. For many Colorado dispensaries, managing rapid growth is the biggest challenge of 2020. If your payroll software is not going to keep pace, we would recommend the following:
- If the business will grow in-state and remain under 50 employees, consider Gusto
- If the business is headed for rapid growth, including out of state consider PeopleGuru
Other Great things about Gusto for Colorado Payroll
Gusto is intuitive for both employers and employees, but if you do have questions their customer service is friendly. 60,000 small businesses across the country are currently using Gusto, some of which are cannabis businesses.
A few things that make Gusto great HR software for small cannabis businesses (100 employees or under) include:
- All the HR and payroll functionality you’ll need like pay, file your federal, state and local payroll taxes, W-2s, 1099s, and new hire forms
- 45-minute onboarding and setup, no set-up fees, plus the first 30 days are free
- Stellar customer support by phone, email, or chat as well as having a CUE Cannabis account manager
- Recently added a feature to map by job codes, for businesses with multiple people in the same role or when an employee works across several different roles.
Other great things about PeopleGuru Gusto for Colorado Payroll
PeopleGuru develops and supports cloud-based Human Capital Management software ideal for mid-market organizations. Their system is highly configurable, affordable, and a single solution, all in one database. The Gurus behind the software are passionate about helping clients meet their goals and have direct experience with the challenges in the cannabis industry.
- The core HR system has client-defined, configurable workflows and comprehensive self-service functionality
- Payroll is intuitive and includes the comprehensive audit and verification tools.
- Payroll specifically crafted for mid-market organizations and handles complex tax and corporate structures with ease
- Benefit management comes with carrier connections and carrier reconciliation tools. Available via web or mobile app, employees can compare and contract their plan options