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Run the Payroll Fee Auditor →Blog · Payroll Management · Cannabis
Cannabis Businesses: How to Switch Payroll Providers (2026)
Switching payroll providers at a cannabis business means moving year-to-date wages and taxes per employee, every pay code for 280E tax code payroll deductions, cash payroll documentation and state cannabis board reporting, the exemption records for budtenders and growers, and the retained records the law requires. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
What has to migrate from a cannabis business
Year-to-date gross, taxes and deductions per employee so the W-2 is one form at year end; every pay code, 280E tax code payroll deductions, cash payroll documentation, state cannabis board reporting and banking restrictions, rebuilt with the same taxability; each state's withholding and unemployment account numbers and rates; garnishment orders with balances; direct deposit authorizations; and the exemption documentation for budtenders and growers.
California cannabis licensees must keep personnel records showing each employee's full name, Social Security number or ITIN, date employment began and date of termination, plus training records listing the content and the employees trained, for at least seven years from the date of creation, in a form that can be produced to the Department of Cannabis Control on request.
Timing the cutover
A quarter boundary is the cleanest cutover because the old provider files a final 941 for its quarter and the new one starts fresh, with no Schedule D reconciliation. Mid-quarter switches work but require the outgoing provider's tax filings to be reconciled before the first new run. Live payroll on BEG is 3 to 5 business days from signing; the migration of cannabis business pay codes is done before that first run, not after.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- California cannabis licensees must keep personnel records showing each employee's full name, Social Security number or ITIN, date employment began and date of termination, plus training records listing the content and the employees trained, for at least seven years from the date of creation, in a form that can be produced to the Department of Cannabis Control on request. [California Department of Cannabis Control regulations, section 15037 (revised July 1, 2026)]
Read the full guide to how to switch payroll providers, and the rest of the cannabis business payroll library.
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Frequently Asked Questions
When is the best time for a cannabis business to switch payroll providers?
At a quarter boundary, ideally January 1 so the W-2 year is clean. Mid-quarter is workable with a reconciliation of the outgoing provider's deposits and filings first.
What cannabis business data is most often lost in a switch?
The pay code configuration for 280E tax code payroll deductions and cash payroll documentation and the exemption records for budtenders and growers. Year-to-date figures usually move; the industry-specific setup is what gets rebuilt wrong.
What does managed payroll cost for a cannabis business?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. 280E tax code payroll deductions, cash payroll documentation and state cannabis board reporting are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Cannabis Businesses. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
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