Retirement plan adoption is accelerating across the cannabis industry, signaling a shift toward more mature benefit strategies and long-term workforce planning. Once rare, employer-sponsored retirement plans are becoming increasingly common as operators respond to state requirements, employee demand, and the need to compete with employers in more established industries.

This article outlines key retirement trends shaping the cannabis industry, using data and benchmarks from the Cannabis Industry Retirement Report to provide context, evidence, and real-world insight.

What is the cannabis industry retirement report?

The Cannabis Industry Retirement Report is an in-depth analysis of retirement plan adoption and design across the cannabis sector.

The findings are based on data from:

• 140 cannabis-related 401(k) plans
• More than 420 employer entities
• Over 17,000 plan participants
• More than $71 million in plan assets

The report examines plan design trends, contribution behavior, and participation outcomes, while also addressing the regulatory and compliance pressures influencing employer decisions.

How quickly is retirement plan adoption growing in the cannabis industry?

Retirement plan adoption in the cannabis sector is accelerating at a pace rarely seen in other emerging industries. Between 2021 and 2025, the number of cannabis retirement plans increased by approximately 800 percent.

This growth reflects increasing employer awareness, rising employee expectations, and expanding regulatory requirements at the state level, particularly as state-mandated retirement programs continue to roll out.

What features do cannabis retirement plans typically include?

Many cannabis retirement plans now closely resemble those offered in long-established industries.

Common features include:

• Default investment options designed to simplify employee decision-making
• In-service distributions
• Roth contribution options
• Participant loan provisions
• Automatic enrollment and automatic contribution increases

A growing number of employers also provide matching contributions to support long-term employee savings and improve participation outcomes.

Where are cannabis employers still falling behind?

Two areas consistently present challenges:

Employee education: Many employers have not implemented structured education or guidance programs to help employees understand the value of retirement saving or how plan features work.

Payroll integration: Limited or manual payroll integration continues to create administrative friction, increase error risk, and reduce the effectiveness of automatic features.

Both areas represent relatively straightforward opportunities for improvement and can have an outsized impact on participation and plan success.

How much are employees saving?

Among participating employees:

• Average pre-tax contributions are approximately 3.4 percent of pay
• Average Roth contributions are approximately 5 percent of pay
• Employers contribute an average of 4 percent

With an average participant age of 33, these early contributions have significant long-term growth potential, reinforcing the importance of early engagement.

How strong is employee participation?

Participation remains one of the most persistent challenges. Fewer than four in ten eligible employees currently enroll in their employer’s retirement plan. Even in plans with automatic enrollment, opt-out rates remain elevated.

Strengthening automatic features, simplifying choices, and delivering clear, relevant education can materially improve participation over time.

Do employees frequently borrow from their retirement accounts?

Loan usage is minimal. Fewer than one percent of participants currently have an outstanding loan balance.

This suggests that while loan features are available, they are not being heavily utilized, helping preserve long-term retirement savings.

What external trends are influencing retirement plan adoption?

Several external factors are shaping adoption:

• Continued expansion of the cannabis industry despite regulatory complexity
• Anticipated federal policy shifts, including potential changes to tax treatment
• Expansion of state-mandated retirement programs

Together, these forces are making private retirement plans both more accessible and more strategically important for cannabis employers.

How do state-mandated retirement requirements affect cannabis businesses?

Cannabis employers are subject to the same state-mandated retirement requirements as other businesses. In many states, employers above certain size thresholds must either:

• Sponsor a qualifying private retirement plan, or
• Automatically enroll employees in a state-run program

Non-compliance can affect financial operations, administrative workload, and in some cases licensing. Understanding state-specific rules and timelines is essential.

What are industry partners saying about the report?

Specialized expertise still matters in a complex sector.

As retirement planning in cannabis becomes more regulated and nuanced, industry partners are increasingly selective about who they trust. Jordan Cross of CrossPlans explains that while his firm previously worked heavily in the cannabis space, they now refer all cannabis retirement plan activity to Kirsten Curry, J.D., AIF and Leading Retirement Solutions, describing them as “truly the experts on the cannabis and green industry” and noting that for qualified retirement plans in this space, “Kirsten is the only person you need to work with.”

Growing recognition of cannabis-specific data.

Recruiting and HR leaders are also recognizing the value of retirement insights created specifically for cannabis employers. David Belsky of FlowerHire points out that he has “never seen a report like this for the cannabis industry,” highlighting how uncommon it still is to see benefits analysis built exclusively around the realities of this workforce.

Practical insight for payroll and compliance teams.

From a compliance and payroll perspective, clarity around retirement trends is becoming increasingly important. Clarke Lyons of Paragon Payroll emphasizes that the report delivers “meaningful, data-driven insight into retirement trends across the cannabis sector,” calling this visibility “invaluable” for supporting compliant, forward-thinking 401(k) strategies.

Lyons also notes that many operators, particularly new license holders, remain unaware of “how quickly requirements are evolving” and where mandates apply. Having access to cannabis-specific benchmarks and trends allows payroll teams to guide conversations earlier and more confidently, helping employers avoid being caught off guard as regulations change.

Key takeaway

Retirement plans are becoming essential infrastructure for cannabis employers. Strong plan design, clear employee education, and awareness of state and federal requirements can help businesses remain compliant, attract and retain talent, and support long-term financial security for employees.

As the industry continues to mature, employers that invest early in well-structured retirement programs will be better positioned to compete and grow.

Download the full report

For a deeper review of all findings, trends, and benchmarks, access the full Cannabis Industry Retirement Report.