“Is This Really a Partnership—or Are You Just Paying the Cannabis Tax in Disguise?”

Let’s Be Blunt: Some of You Are in Vendor Relationships That Are Quietly Draining Your Business

We’ve seen the cycle again and again. A cannabis business signs on with a “compliance-friendly” payroll company, an LMS provider, or an HR platform. Everything looks good on the surface—the demo is slick, the reps say the right buzzwords, and the system seems functional enough. But six months in, reality sets in. You're spending hours each week trying to customize templates that weren’t designed for cannabis. You're explaining to your own support rep what 280E is. Your staff still doesn’t know how to safely handle post-harvest materials or properly check an ID. And when you get your bill, you realize you're being charged more simply because you exist in cannabis.

If that story feels familiar, this article is for you. Because too many operators are trapped in relationships that aren't just unhelpful—they’re actively harmful. They cost you money, time, legal risk, employee trust, and operational peace of mind. And the worst part? These vendors often talk a good game about “supporting the industry,” while building nothing that actually reflects its complexity.

1. Are You Paying a Premium for a Generic Product?

Let’s talk about the cannabis tax—not the IRS kind, but the quiet premium that gets baked into every SaaS contract, payroll service, or banking product the moment you disclose your NAICS code. Many companies, especially those operating in highly regulated verticals like fintech or healthcare, charge more for risk-adjusted services. That’s understandable when the risk is real. But in cannabis, this has become a lazy and opportunistic pricing model. You’re paying 10–40% more than a non-cannabis business for the same service—without receiving any additional protections, tools, or training.

A recent cannabis payroll audit we conducted showed that a client had been paying $7,000/year more than their non-cannabis counterpart for the same HRIS system, even though that system had zero cannabis-specific workflows. No ID-check protocols. No 280E tracking. No labor-hour compliance features for variable harvesting seasons. Just a higher fee for existing in a gray zone.

Ask yourself: What am I actually getting in exchange for that extra cost? If the answer is "nothing that materially protects or strengthens my business," you're not in a partnership. You're being taxed.

2. If the System Isn’t Built for Cannabis, You’re the One Who’s Going to Pay the Penalty

Here’s the operational reality: most HR and training platforms were built for traditional industries with straightforward compliance rules. Restaurants. Retail chains. Office environments. When those platforms try to "expand" into cannabis, they often repurpose their existing content and workflows with minimal customization. That’s how you end up with onboarding modules that teach your budtenders how to upsell soda—but say nothing about terpenes, responsible sales, or your state’s ID scanning requirements.

We’ve reviewed training systems that don’t even mention cannabis until page 4 of the employee handbook. Others suggest that cannabis employees should follow OSHA protocols designed for construction sites, rather than GMP and ISO-based safety practices for cultivation and manufacturing.

This isn’t a branding issue—it’s a risk issue. If your team isn’t trained on the real responsibilities of their role—including state-by-state security laws, recordkeeping requirements, and retail audit protocols—they become a compliance liability the moment they clock in.

3. A True Partner Should Reduce Work, Not Add to It

Let’s talk workload. The point of hiring a vendor is to alleviate stress, automate complexity, and allow you to focus on growing your business. But if you’re constantly customizing their templates, rewriting their onboarding flows, or having to re-explain your operational structure during every support call, the ROI is upside down.

Here’s a common red flag: you sign up for a platform and immediately get handed a “DIY onboarding toolkit.” That might sound empowering—but what it usually means is that the company didn’t invest in cannabis-specific setup, so they’re asking you to retrofit the entire system to your needs. We’ve seen operators spend 20+ hours configuring training modules, translating labor laws, and recreating SOPs that their vendor should have built from day one. That’s not support. That’s unpaid labor.

And during a compliance audit or employee investigation, those gaps become painfully obvious. If your workflows don’t match your team’s reality, you’ve set them—and yourself—up for failure.

4. Are They Showing Up Outside the Product? If Not, Their “Support” Is Just Marketing

When a vendor says they’re cannabis-friendly, ask this: Where are they when policy is being shaped?
Are they:

• Testifying at state legislature hearings?

• Participating in trade organizations or equity coalitions?

• Developing resources tailored for social equity applicants, tribal operators, or legacy entrepreneurs?

• Publishing thought leadership or risk mitigation guides based on real operational experience?

If they’re not showing up there, you need to question whether they’re showing up anywhere that matters. Because real commitment to cannabis isn’t quiet. It’s visible, vocal, and productized.

Paragon, for example, publishes its Cannabis Commitment Scale publicly and updates it as legislation and client feedback evolve. We’ve built training tools based on conversations with both MSOs and equity licensees. And we provide our CannaU courseware free of charge inside Learn PRO, not because it boosts our margins, but because we believe education is a responsibility, not a luxury.

If your vendor can’t tell you how they’re making cannabis safer, fairer, and more scalable, they’re not a partner. They’re a product rep.

5. What’s the Emotional Cost of Staying in the Wrong Relationship?

Let’s shift from numbers to feelings—because you’re human, and so is your team.

Every time you have to onboard a new hire without the right materials…
Every time you lose sleep before an audit…
Every time your team breaks a law they didn’t even know existed…
Every time your “support ticket” sits unanswered for days…

You're paying with more than money. You’re paying in mental bandwidth, legal exposure, employee burnout, and lost momentum.

A bad vendor relationship can erode morale just as quickly as it erodes your budget. But it often happens so slowly—death by a thousand small paper cuts—that you don't realize the damage until it's too late.

So What Does a Real Cannabis Partnership Feel Like?

Let’s paint the other picture.
You onboard a new cultivation tech. They complete CannaU Cannabis 102 before ever stepping into the greenhouse. They understand GMP safety protocols. They know why post-harvest contamination is a real risk.
You’re preparing for a state inspection. You click two buttons and print the last 60 days of timecards, OSHA trainings, and chain-of-custody logs—customized by job type, location, and compliance rule.
Your budtenders know how to talk terpenes, escalate safety concerns, and ID-check a customer’s vertical license with confidence—not fear.

That’s what it looks like when your partner respects your time, protects your people, and builds for your reality.

Here’s the Checklist That Tells You the Truth

Ask your current vendor these five questions. And don’t accept vague answers:

1. What cannabis-specific features or content do you offer?

2. How do you price your services for cannabis vs. non-cannabis businesses?

3. Who builds your training content—and what’s their cannabis background?

4. Where do you show up in public to support cannabis operators?

5. How do you protect my business and people—not just your platform?

And here’s the part no one else tells you: what should a strong answer actually sound like? What does real evidence even look like?

Let’s break it down.

If they say they offer cannabis-specific features—ask to see them. Ask for screenshots. Ask for the curriculum. If they’re naming a "compliance module," make sure it doesn’t read like it was copy-pasted from a liquor store manual.

When it comes to pricing: you should see consistency, clarity, and fairness. If cannabis clients are charged more, the vendor should be able to point to added protections, custom features, or legal infrastructure that justify it. If not? That’s not risk-adjusted pricing—that’s a penalty for your existence.

If they mention their training content was built by “industry experts,” push further. Who? From where? When? We’ve seen content created by writers who’ve never worked a day in cannabis. The people who design your training should understand OSHA for indoor grows, state-by-state METRC practices, post-harvest workflows, and frontline dispensary life.

And if they say they “support the industry,” they better have receipts. Here’s what that can look like:

• Showing up for Cannabis Lobby Days (like we did this past year in Washington, DC) to fight for banking and labor rights

• Participating in White House equity roundtables

• Speaking on panels at industry events where the goal is to protect—not poach—legacy operators

• Publishing resources free of charge, like our downloadable 280E Risk Guide, or offering LMS courseware at no extra cost

This isn’t about glorifying what we do. It’s about raising the bar for what you should expect—because if your vendor isn’t willing to get their hands dirty to build equity and efficiency alongside you, then what are you really paying for?

We’re here to give you the language. The filters. The tools to discern whether your vendor is aligned with your values. If it’s us, great. If it’s not, that’s fine too. What matters is that you’re equipped to build something sustainable with people who are willing to stand in the fire with you.

If they can’t give you straight answers—or if their answers are all pitch and no proof—you already know.

The Dangers You Don’t See Until It’s Too Late

There are risks in cannabis that go beyond bad tech or overpriced service. These are the quiet, dangerous blind spots that vendors rarely warn you about—because it would mean admitting their product can’t prevent them.

Take licensing loss. One misstep—a missed payroll tax filing, a budtender who wasn’t trained on ID verification, a payroll run that didn't report labor properly—and you could lose your ability to operate in the state. Not tomorrow. Not after an appeal. Instantly. States like Colorado and Michigan have issued shutdowns or heavy fines for companies failing to meet basic labor and compliance requirements.

Now layer in the risk of legal action. An improperly classified employee or an injury due to a lack of proper safety training isn’t just a HR problem—it’s a lawsuit waiting to happen. If your training platform didn’t cover cannabis-specific safety protocols, and your employee gets hurt in the extraction room? You’re going to court without a defense.

Then there’s data privacy. Your HRIS platform stores sensitive payroll data—SSNs, banking info, licensing credentials. But many “cannabis-friendly” vendors aren’t built for federal-grade data protection. We’ve seen clients stuck in vendor systems with no multi-factor authentication, no SOC2 compliance, and limited support—yet still charged $20+/employee/month for the privilege.

These aren’t hypotheticals. These are headlines. They’re enforcement actions. They’re real stories from operators who learned too late that not every vendor understands the weight of a cannabis license, a dispensary, a legacy brand. You deserve more than a shiny dashboard. You deserve infrastructure that holds up under pressure.

If You’re Exhausted, We Get It

Let’s not pretend switching vendors is easy. If you’ve been burned before, if your team is tired of starting over, if your inbox is full of unanswered support tickets and “just checking in” emails—you’re not alone.

We’ve been there too. In fact, we wrote about it in "We Fumbled Too: Cannabis Payroll Vulnerability Made Us Stronger" and followed it up by launching CannaU — our free, purpose-built cannabis LMS courseware. Because education shouldn’t be paywalled, especially in a high-risk industry like this. We’ve felt the sting of letting people down and the resolve to never let it happen again. That’s why we’re not here to shame anyone into moving. We’re here to show you what to look for—because we had to learn it the hard way.

If you choose to stay with your current vendor, let it be because they’re showing up—not just selling. Let it be because their systems, their training, their people—actually make your business safer, stronger, and more sustainable.

If you’re tired, protect your peace. But don’t protect your vendor’s feelings. Vet harder. Demand better. And take the next step only when it feels right, not just when it looks polished.

Choosing a vendor isn’t just a business decision. It’s a trust fall.

And if you fall, you deserve to know someone will actually catch you—not step over you on their way to the next sale.

We’re not here to scare you into switching. We’re here to help you think critically before you keep paying for a relationship that’s costing you more than it’s giving.

When you’re ready to partner with people who’ve walked through the fire and came back with a blueprint—Paragon will be here.

👉 Want to see what cannabis-specific partnership really feels like? Let’s Talk.