Cannabis Payroll & 1099 Processing
Where a given employee's wages land determines whether they are deductible.
Cannabis payroll carries complications ordinary payroll does not: providers who drop cannabis clients without warning, worker classification questions the industry routinely gets wrong, and a labor cost allocation that directly determines how much of your payroll is deductible.
What's Included
Why This Differs In Cannabis
Where a given employee's wages land determines whether they are deductible. Direct production labor at a cultivation site can generally be capitalized into inventory and recovered through COGS. A budtender's wages generally cannot. The same person splitting time between functions requires a documented allocation.
Most cannabis businesses never make this distinction in their payroll records, which means the allocation has to be reconstructed later — a far weaker position than having recorded it contemporaneously.
Contemporaneous beats reconstructed, every time.
Why MCA
We have served licensed cannabis operators since 2015 — one of the first firms in the country to build a practice around it — and we have worked with more than 100 operators across 30+ states. Cannabis is all we do, and all we have ever done.
Frequently Asked
Our payroll provider dropped us. Can you help?
Yes. It is a common story and we know which providers work reliably in this industry.
Can you allocate labor between COGS and opex?
That is a core part of the engagement and one of the highest-value pieces of it.
Do you handle multi-state payroll?
Yes, including registration in new states.