Payroll Providers and Cannabis
Some national payroll providers still decline cannabis clients or terminate them without notice, leaving an employer mid-quarter without a processor and with filings due. We help operators select and implement providers that serve the industry reliably and can support departmental cost allocation.
Where a transition is required, we manage it so that year-to-date wage and tax data carries over correctly and quarterly filings remain intact.
Labor Cost Allocation for Inventory
For a cultivator or manufacturer, labor allocation determines how much payroll reaches inventory rather than being lost to disallowance. That requires time tracking by activity, not just by shift: propagation, cultivation, harvest, trim, processing, packaging, quality assurance, and non-production functions such as sales and administration.
We configure departments and job codes in the payroll system to match the accounting structure, so the allocation is a data extract rather than an estimate at year end.
- Job-code time tracking mapped to production activities
- Payroll burden allocated with wages, not separately estimated
- Supervisory and quality assurance time analyzed by function
- Documentation retained to support the allocation on examination
California Wage and Hour Compliance
California employment law is demanding regardless of industry: daily overtime, meal and rest period premiums, itemized wage statements, final pay timing, sick leave accrual and local minimum wage ordinances. Cannabis employers also frequently operate under labor peace agreement obligations tied to licensing.
We coordinate payroll configuration with those requirements and flag exposure areas, working alongside employment counsel where the question is legal rather than accounting.
Worker Classification
Treating cultivation or trim workers as independent contractors is a persistent industry practice and a significant liability under California's classification standard. Reclassification assessments carry back taxes, penalties, interest and wage claims.
We review classification against the applicable test, quantify exposure where the current treatment is unsupportable, and design a corrected structure.
Multi-Entity and Common Paymaster Structures
Operators with several entities often centralize employment in one company and charge time out to the others. Done properly with agreements, documented time and consistent charges, this is workable; done informally, it undermines both the intercompany position and the inventory allocation.
We structure the arrangement, set the charge methodology and keep the supporting records aligned across entities.
