Why Cannabis Workers, Employees Should Think 401(k) Plans

If you’re a cannabis industry worker or employer, you might not be thinking much about retirement plans, but that could and perhaps should change.

We sat down with Tyler Priest, chief revenue officer at Green Leaf Business Solutions, to explore the relevance of 401(k) plans for the cannabis industry.

Why? Because Green Leaf just launched GreenPath 401(k), which is a significant development for the legal cannabis industry and may help reshape the conversation around retirement planning.

What Is A 401(k) And Why Should You Care?

As many US workers lucky enough to have one may already know, a 401(k) is a retirement savings plan offered by employers that allows workers to invest a portion of their paycheck to fund their retirements, often with tax advantages and a matching contribution from their employer. For workers, it’s a tool for building long-term financial security.

Priest explained how such a retirement plan can be made available to cannabis industry workers.

“We solved a series of challenges, starting with a legal structure that allowed institutional-grade 401(k) partners to be comfortable that cannabis businesses were operating within the federal and state guidelines set forth for them,” he told Benzinga.

Such plans were for the most part unavailable to cannabis employees due to regulatory difficulties, related to the way cannabis is regulated in the US.

“Retirement planning is important for everyone,” Priest said. “The cannabis industry shouldn’t be an exception. Our mission with GreenPath 401(k) is to provide employees in this sector with a stable, reliable solution to prepare for their futures.”

Read Also: Survey Finds 46% Of Middle-Class Workers Are Halting Or Cutting Their Retirement Contributions Due To Relentless Rise In Cost Of Living

Overcoming Misplaced Barriers

Designing a 401(k) plan for the cannabis industry was not without challenges. Regulatory concerns, such as compliance with federal guidelines like Financial Crimes Enforcement Network (FinCen), Anti-Money Laundering and the Office of Foreign Assets Control were significant hurdles.

Green Leaf Business Solutions addressed these issues by creating a robust legal and compliance framework, ensuring their plan meets federal and state requirements.

“We needed a structure that reassured institutional-grade 401(k) providers that cannabis businesses could operate within the rules,” said Priest. “This meant a meticulous compliance process and transparency at every step.”

Why This Matter For Employees

GreenPath 401(k) is designed with cannabis employees in mind, offering the following features

Fiduciary-guided investment advice to make informed financial decisions.
Financial wellness classes on topics such as budgeting and debt consolidation.
Programs for car and home buying as well as credit repair resources.

These benefits are part of a broader effort to empower workers to take control of their financial futures. “It’s not just about saving for retirement, it’s about providing tools and knowledge to help workers manage their finances effectively,” Priest said.

Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. If you’re serious about the business, you can’t afford to miss out.

What About Employers?

Employers also stand to gain. Offering a competitive 401(k) plan can help attract and retain talent in an increasingly competitive industry. The plans offer options for employer matching contributions that can make their workplaces more appealing.

Approximately 30,000 cannabis employees are enrolled in retirement plans like GreenPath 401(k), but there’s room for growth in the nearly half-a-million-workers industry.

“Attracting national institutional partners with extensive expertise has lowered financial barriers,” Priest said. “This has made it easier for both small operators and multi-state enterprises to provide these essential benefits.”

He gives credit to industry leaders, including some of the largest multi-state operators that have already adopted the program.

A Step Toward Stability And Legitimacy

Every 401(k) for the cannabis industry is a step toward normalizing and legitimizing the cannabis workforce, giving employees access to benefits that are standard in other industries.

“Most businesses don’t realize that if they use a smaller provider with manual processes, the potential for plan failures can be high, and the cost to a business can be hundreds of thousands, if not millions, of dollars in corrections,” noted Priest.

“We want to help employees and businesses in the cannabis industry thrive. This plan is one way we can contribute to that vision, ensuring workers have the tools they need to build a secure future.”

COVER: AI generated image