MJBiz - September 2023 - 39

Download the 2023 Cannabis Compensation Survey Report featuring
pay for more than 100 positions at content.futuresense.com/2023ccs
PTS had been with Paychex since
early 2022.
" We had some fear and panic among
our employees because they were
concerned about receiving their pay.
We had to reassure them that everyone
was going to get paid. Even if we had
to do it manually, everybody was going
to get paid, " PTS Human Resources
Director Misti Robinson said.
Robinson started looking for a
new payroll-services company and
eventually signed up with Green Leaf
Business Services, a cannabis-specific
payroll company in San Diego founded
by former Paychex employees.
Robinson went with Green Leaf
" because it specifically stated that they
were cannabis-driven. They're really
servicing cannabis. And after what
happened with Paychex, I was not
willing to go with a company that didn't
highlight cannabis on their website, "
Robinson said.
Why are " mainstream " payroll
providers reluctant to service cannabis
companies? The reasons come down
to banking and complexity-as well as
the fact that marijuana remains illegal
under federal law.
PAYROLL'S COMPLICATED
BANKING PROBLEM
Paying employer and employee taxes
to federal and state governments is
" highly complex, " said Marc Rodriguez,
CEO and co-founder of Green Leaf.
" There's a lot of technology and
automation involved. ... But when
you deal with cash, like many
cannabis companies (do), you can't
use automation. You have to do
these one-off processes for all of the
cannabis companies. So, it represents
a significant operational undertaking
to own and operate a payroll company
that's geared toward the cannabis
industry, " Rodriguez said.
Not having a physical bank also
means not being able to use the
Automated Clearing House (ACH)-an
electronic U.S. financial network used
Marc
Rodriguez
Photo by
Calvin's
Studio
for processing money transfers and
payments such as taxes and payroll.
" If there is no automation, then
payments must be collected in cash, "
Rodriguez said. But banks are resistant
to handling cash from plant-touching
marijuana companies. " I, as the payroll
company, have to figure out a solution.
... That's why a lot of payroll companies
stay away from cannabis, because it's
an entirely different challenge. When
you have to circumvent automation
and use people instead, that's an
additional expense. "
Another problem is that noncannabis
payroll companies are
reluctant to serve marijuana businesses
because they worry about putting their
non-marijuana clients' money at risk,
Upshaw said.
" That's the benefit of being with a
payroll company. They have access to
your accounts, and they do all this stuff
on your behalf. From an efficiency
standpoint, they're experts at it.
They're fast, and you can have slimmer
teams, " Upshaw said.
Cannabis-specific payroll
companies don't have to worry about
mixing money from marijuana and
mainstream businesses.
CANNABIS EXPERIENCE
AND DOCUMENTATION
Another important factor is experience
with cannabis regulations and
documentation. The marijuana
industry is under heavier scrutiny
than most other sectors, with
regulators and financial institutions
asking for lots of documentation.
" For banking, they need to have all
of the documents in place to show that
we're licensed, that we've done our
due diligence (and) they have done
their due diligence. I'm not sure that
other payroll companies that aren't
familiar with cannabis understand
the ins and outs of receiving the
license, " Robinson said. " It's a very
complicated industry, and if you're
not familiar with that world, it makes
it difficult for a non-cannabis payroll
provider to make sure that they're
doing what they need to do. "
After deciding to switch to Green
Leaf, PTS had four weeks to make the
transition.
" It was a lot of auditing. It was a
lot of time. It took a lot of teamwork.
We had four weeks to get Green Leaf
up and get everyone trained-and
notify employees and make sure they
have the ability to clock in and out, "
Robinson said.
" Every little nuance of payroll was
affected. And it not only affected payroll,
but it also affected HR platforms.
It affected our learning modules, it
affected anything that has to do with
HR. It affected our whole world. "
A successful transition from one
payroll company to another requires
comprehensive auditing of documents
and records, said Savannah
Dougherty, human resources manager
at Joyology, a Michigan-based
marijuana retailer that was a Paychex
client.
" We had to transition everything-not
just payroll but all of our personal
history records. And then, every
employee had to get logged into the
site, get new passwords. You had to
audit to make sure everybody was in
it, " Dougherty said. " Moving all of your
data from one system into a different
system, there were also a lot of hours
spent on just auditing that data. "
mjbizdaily.com | September 2023 39
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MJBiz - September 2023

Table of Contents for the Digital Edition of MJBiz - September 2023

MJBiz - September 2023 - CT1
MJBiz - September 2023 - CT2
MJBiz - September 2023 - Cover1
MJBiz - September 2023 - Cover2
MJBiz - September 2023 - 3
MJBiz - September 2023 - 4
MJBiz - September 2023 - 5
MJBiz - September 2023 - 6
MJBiz - September 2023 - 7
MJBiz - September 2023 - 8
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MJBiz - September 2023 - Cover3
MJBiz - September 2023 - Cover4
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