Let’s get something straight: cannabis payroll isn’t impossible. You’ve just been lied to enough times that it started to feel that way.
We’ve spoken with cannabis businesses across the country—dispensaries, cultivators, labs, transporters—and almost every conversation starts the same way: with exhaustion. Exhaustion from being dropped by vendors. Exhaustion from hearing that payroll “just isn’t built for cannabis.” Exhaustion from getting charged triple, treated like a liability, or told “we don’t support that license type.”
But here’s the truth: cannabis payroll works—when it’s done by people who actually understand cannabis. The real issue isn’t your license or your banking setup. The issue is your payroll provider.
You’re Not Too Risky. They’re Just Too Lazy.
Let’s stop pretending this is about you. It’s not.
You didn’t break the system. You’ve been trying to follow it. Trying to run payroll on time. Trying to stay compliant under 280E. Trying to pay your team fairly. Trying to grow without breaking something.
The problem is, most payroll providers were never built for this industry. And instead of learning, adapting, or investing in real cannabis support, they just walk away. They’d rather blame “compliance concerns” or “banking conflicts” than do the actual work of showing up for your business. They want safe, simple clients. And when your model doesn’t fit their template, they decide you’re the problem.
At Paragon, we don’t think it’s brave to say you support cannabis. We think it’s basic. The real bravery is in doing the work day after day—through audits, expansions, cash-based setups, and licensing shifts. We built our systems for that kind of real-world chaos.
What Happens When the Wrong Provider Drops You
Maybe this sounds familiar.
You signed on with a provider who claimed to support cannabis. Everything seemed fine—until you opened a new location, or changed banks, or added a new license. Suddenly, your account is flagged. Your rep stops returning your calls. And before you know it, you’re getting a formal email giving you 30 days to find a new solution.
You’re scrambling. Your team is stressed. And worst of all, you’re not sure what you did wrong.
Here’s the thing: you didn’t. You just worked with a vendor who said yes at the start but never planned to stay when things got real.
That’s not partnership. That’s abandonment.
What Makes Cannabis Payroll Actually Difficult (and How to Handle It)
Cannabis payroll isn’t inherently complex—it’s situational. It’s only difficult when your provider doesn’t understand the realities of this industry. Here’s what makes it hard for them, and manageable for us:
Cash-heavy realities: Some cannabis businesses still operate partially or fully in cash, especially without consistent banking. Providers that only offer ACH or direct deposit aren’t built for your reality. At Paragon, we offer hybrid systems including paycards and checks that reduce exposure and increase flexibility.
280E confusion: If your provider can’t explain how 280E affects payroll tax treatment, that’s a red flag. Cannabis operators can’t deduct ordinary business expenses. That means your payroll tax setup must be strategic, precise, and aligned with how your business is structured. We build that into your system from day one.
Worker classification landmines: Misclassifying a budtender as a contractor could cost you your business. Yet most providers never ask about classification. At Paragon, we coach our clients through proper employee classification, wage compliance, and onboarding strategies that reduce risk.
Multi-state and licensing complexity: Dispensaries in California aren’t operating under the same rules as a grow in New Mexico. You need a provider who can keep track of tax codes, labor laws, and compliance shifts across all your locations and licenses. We do that in real time, not retroactively.
Why Saying “No” to Cannabis Is Just Lazy Business
When a vendor tells you “we can’t support your business anymore,” it’s not about legality. It’s about convenience.
They’re not protecting themselves—they’re avoiding you. They’re too undertrained, under-equipped, or undercommitted to deal with the complexities of regulated cannabis. And so they label you “too high risk” when what they really mean is “too much work.”
Let’s be clear: there are thousands of compliant, high-functioning cannabis businesses out there. This industry is responsible for billions in tax revenue and hundreds of thousands of jobs. If a vendor can’t serve that market, that’s not your red flag—it’s theirs.
We didn’t build Paragon to “test the waters” of cannabis. We jumped in and built a new system from the ground up because it didn’t exist. And we’re still here because we believe this industry deserves more than dropouts and excuses.
A Word for the HR Leaders and Office Managers Doing Everything
We see you.
You’re the one triple-checking timecards, trying to set up payroll while onboarding new hires, Googling tax codes after hours, and keeping a paper trail long enough to survive an audit—just in case. You’re also probably the one who gets blamed when payroll goes wrong, even though you were set up to fail.
This industry runs on the backs of people like you—resourceful, adaptable, often under-supported. You shouldn’t have to fight your payroll provider just to stay compliant. And you shouldn’t be stuck duct-taping together systems your vendor should’ve built correctly in the first place.
You deserve a partner that knows your pain points and designs workflows that actually relieve them. That’s the standard we hold ourselves to every single day.
Frequently Asked Questions
Can you support my payroll even if I’ve been dropped by someone else?
Yes. We specialize in emergency onboarding, “clean-up” support, and fast stabilization for cannabis businesses left stranded by other providers.
I’m still operating in cash—can you work with me?
Absolutely. We offer cash-alternative systems including paycards and paper checks. We’ll help reduce exposure while protecting compliance.
How much do you charge?
No “cannabis tax.” No compliance surcharges. Just transparent pricing based on your real needs—not your stigma.
What if I’m in multiple states?
We support multi-state operators with complex license mixes and varying compliance requirements. You get one system that’s built to flex with your business.
Can you help us prep for an audit?
Yes. And we don’t wait for an audit notice to start. We build audit-readiness into your everyday setup.
Audit Your Current Provider Before They Burn You
If you’re not sure whether your provider is helping or hurting, these questions will help you find out.
Compliance & Classification
– Are they proactively guiding you through 280E and labor compliance?
– Do they help classify employees and contractors correctly?
– Are they tracking state and local tax requirements on your behalf?
Cannabis-Specific Knowledge
– Do they understand cannabis licensing structures (e.g. vertically integrated vs. retail only)?
– Do they know your state’s cannabis regulations—or are you the one educating them?
– Have they worked with other cannabis clients, or are you the guinea pig?
System Functionality
– Do they support hybrid pay systems (ACH, paycard, cash-handling workflows)?
– Are there onboarding tools, training, and clear workflows—or are you on your own?
– Does their system accommodate your license and business model—or do you have to adjust?
Customer Service & Transparency
– Do you get quick, informed responses—or vague guidance and ghosting?
– Do you have a dedicated cannabis-savvy rep?
– Are there hidden fees tied to your license type?
If you’re unsure about even one of these, it might be time to explore a partner who actually knows this world—and is willing to walk through it with you.
Here’s What to Do Next
Audit your provider. Ask the questions most won’t. And if you’re realizing they’re not built for you, it’s time to shift.
Start by talking to someone who gets it. No pressure. No upsell. Just honest guidance from a team that lives and breathes cannabis payroll every day.
You’re Not the Problem. They Are.
This industry was never going to be easy. You knew that. But it shouldn’t be this hard to pay your people and grow your business.
Payroll should feel like relief—not risk.
If you’ve been burned before, we’ll help you rebuild. If you’ve been overcharged, we’ll get you back on track. And if you’ve never had a provider that actually showed up for you? Now you do.
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