Managed Payroll · Cannabis & Dispensaries
Cannabis payroll has rules no generic payroll provider understands. IRC 280E, state licensing employment requirements, banking limitations, and multi-state operational complexity make cannabis and dispensary payroll unlike anything else. We manage all of it at $25-$45 per employee per month -- so you focus on your operation, not on payroll compliance that can unravel a license.
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Why Cannabis Payroll Is Different
What We Manage
We classify payroll costs between COGS-eligible (production, cultivation, processing) and non-COGS (dispensary sales, administration) roles to support your federal tax position. Proper classification is the single most important payroll decision a cannabis company makes.
Each state has different cannabis employment regulations, licensing requirements, and payroll tax rules. If you operate dispensaries in multiple states, we handle registrations, filings, and compliance in each jurisdiction as part of the managed service.
We maintain records of agent card, handler badge, and key employee license status alongside payroll records -- so you have documentation ready for state audits and license renewals.
We work with your cannabis-friendly banking relationship to process payroll compliantly, with the audit trail your bank and state regulators require.
How It Works
We map your employee roster by role, your 280E COGS allocation structure, your banking relationship, and your state licensing requirements. You get a fixed monthly cost before we start.
We configure your payroll cost allocation between COGS and non-COGS roles, set up state registrations, and document the process trail your regulators expect. No system migration required.
Every pay cycle, every state filing, every 280E allocation record, and every year-end W-2 -- fully managed by BEG. Your team approves, we execute.
What You Get
Common objection: "Most payroll platforms will not serve cannabis companies, so we are already on a limited system."
We do not require you to switch platforms. BEG operates as your managed payroll team within your existing system. If you want to move to isolved for a more capable HCM platform that serves the cannabis industry, we can manage that transition -- but it is never a prerequisite.
Common objection: "Cannabis-specific payroll services charge premium rates and tack on compliance surcharges."
The $25-$45 PEPM rate covers everything: payroll processing, 280E allocation documentation, state filings, multi-state registrations, year-end W-2s, and BEG support.
Common objection: "Generic payroll support does not understand 280E or state cannabis licensing requirements."
Your BEG payroll specialist is your ongoing point of contact -- not a call center rep who has never seen a cannabis operation. When you add a location, hire for a new license tier, or need to reallocate payroll costs for a tax filing, one message handles it.
Getting Started
15 minutes. We map your employee roster by role, 280E allocation structure, banking relationship, and state licensing requirements -- and give you a fixed monthly price.
Agreement signed, system access granted, employee roster and 280E cost allocation structure reviewed.
280E payroll cost allocation, state registrations, and regulatory compliance documentation configured in your existing system.
Your first fully managed cannabis pay run -- BEG executes, your team approves. No migration required.
The Math on Waiting
The IRS audits cannabis companies at significantly higher rates than other industries. An audit that finds improper 280E payroll cost allocation -- moving non-COGS labor into COGS positions -- can result in back taxes, penalties, and interest that threaten the viability of the business. Properly managed payroll with documented 280E allocation is your first line of defense.
Your Next Transition Window
State cannabis regulators increasingly review payroll records during license renewals and compliance checks. Getting your payroll documentation in order before your next renewal window means the difference between a clean audit and a license condition. Start now -- transitions take 30-60 days.
15 minutes. We scope your 280E allocation structure, employee roster, and state licensing requirements -- and give you a fixed monthly cost.
FAQ
We classify your employees by role into COGS-eligible (production, cultivation, processing) and non-COGS (retail sales, administration, management) categories. This classification determines which payroll costs your tax team can include in COGS for federal tax purposes. We maintain the allocation records and can provide documentation for your CPA or tax attorney.
Yes. We work within your existing banking relationship and ensure payroll processing complies with the documentation requirements your bank imposes. We do not require you to change banks.
Multi-state cannabis operations are managed as a single engagement. We handle state-specific employment regulations, licensing employment requirements, and payroll tax registrations and filings in each jurisdiction you operate in.
No. BEG operates as your managed payroll team inside your existing system. Migration is an option if you want to upgrade, never a requirement to get started.
Everything: payroll processing, 280E cost allocation documentation, state tax filings, multi-state registrations, year-end W-2s, and BEG support.
Yes. Cannabis businesses pay state payroll taxes -- state income tax withholding, unemployment insurance, and applicable local taxes -- the same as any other employer. The federal complexity comes from IRC 280E limiting federal income tax deductions, not from payroll taxes themselves. State payroll tax compliance for cannabis is fully managed as part of our service.
Banking limitations affect how cannabis companies fund payroll, not the payroll mechanics themselves. We work within your existing banking relationship and payroll funding process. If you use a cannabis-friendly bank or a dedicated payroll account, we process through that account with the documentation trail your bank and state regulators require.
From signed agreement to compliant, managed payroll: 3-5 business days. We map your employee roster by role, 280E allocation structure, and state licensing requirements during the scope call, then configure payroll and documentation in your existing system. Most cannabis operators are running properly documented managed payroll within a week of the first call.
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