The cannabis industry is quickly gaining legal status across the United States.  At the time of this article, 39 states deem recreational cannabis, medical cannabis or both legal. Additionally, seven more states authorize the use of CBD with THC. This profitable industry has witnessed dispensaries sprouting nationwide. However, cannabis business owners find the lack of federal recognition, evolving state laws, and outdated tax codes challenging for business. Nevertheless, many have jumped on the opportunity to open dispensaries across the country.

Navigating HR Challenges

Cannabis business owners require the same level of support as any other enterprise, encompassing crucial human resources (HR) assistance. Unfortunately, many Professional Employer Organizations (PEOs) hesitate to provide HR administration to the cannabis industry due to its complexities and lack of federal acceptance. Tandem HR, however, tackles these challenges head on.

Marcus Wilbers, Chief Client Officer at Tandem HR, notes that “Cannabis business owners face identical obligations, such as employee compensation, benefits provision, and compliance with employment regulations, as other small and mid-sized business owners. Except they face these challenges in an industry that’s growing from scratch very rapidly; the support structures are still being developed. And that’s where we can help.”

Relieving Code 280E Challenges

Cannabis business owners struggle with the complexities of IRS Code 280E.  Enacted by the Internal Revenue Service (IRS) in 1982, Code 280E attempted to stop drug dealers from claiming tax deductions for their operations. This code stipulates that any businesses that sell Schedule I or II controlled substances under the Controlled Substance Act cannot claim any tax deductions or credits beyond the cost of goods sold. Without proper categorization of operational expenses, tax liabilities can prove financially devastating. PEOs can ensure payroll and benefits are accurately classified to minimize the impact of 280E on their business.

Addressing Workers’ Compensation Challenges 

Another challenge faced by cannabis business owners lies in securing workers’ compensation coverage and risk services. Tandem HR’s carriers provide specialized support for the cannabis industry’s unique needs.

The Advantages of a PEO Relationship

By partnering with Tandem HR, cannabis companies gain access to a full team of seasoned HR experts. Economies of scale extend to products like medical, dental, and vision insurance as well as cutting-edge HR technologies. Both of these advantages help control costs. It also allows smaller companies to compete for top talent. The robust benefits packages and professional HR infrastructure offer a big advantage. This is especially true during times of staffing shortages.

Above all, the most substantial benefit is the precious time it returns to business owners. Executives are freed from burdensome, albeit necessary, employee relations tasks such as processing payroll, benefits administration, and employment law compliance. They redirect their efforts toward revenue-generating activities while Tandem HR expertly handles the HR administration.

For more information on how Tandem HR can assist your small or mid-sized business, contact us today at 630.468.9286.