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Run the Payroll Fee Auditor →Blog · Payroll Management · Cannabis
Cannabis Businesses: New Hire Payroll Onboarding (2026)
New hire payroll onboarding at a cannabis business is the W-4, the Form I-9 within three business days, new hire reporting inside the state deadline, the pay code for the role, and the cannabis business checks this page cites before the first shift. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Checks specific to hiring in cannabis businesses
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.
The federal onboarding sequence
Form W-4 (and the state equivalent) before the first check; Form I-9 section 1 on day one and section 2 within three business days; the new hire report to the state directory within its deadline, federal default 20 days and shorter in several states; the pay code, exemption status and direct deposit authorization on the employee record; and for budtenders and growers the pay basis documented so 280E tax code payroll deductions is taxed and counted for overtime correctly from the first run.
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 onboard a new employee in payroll, and the rest of the cannabis business payroll library.
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Frequently Asked Questions
Hiring at a cannabis business: California Department of Cannabis Control regulations, section 15037 (revised July 1, 2026)
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.
How fast must a cannabis business report a new hire?
Within the state's deadline, 20 days under the federal default and as short as 7 days in some states. The report goes to the state new hire directory, and a rehire after 60 days is reported again.
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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