The cannabis industry has been witnessing unprecedented growth over the past few years, driven by legalization efforts in various parts of the world and an increasing acceptance of cannabis for both medicinal and recreational use. In 2023, the legal cannabis industry in America experienced a significant increase of almost 23,000 new jobs, resulting from double-digit sales growth nationwide.
According to a recent report, by early 2024, the legal cannabis sector sustained around 440,445 full-time equivalent roles, a 5% increase from 2023. This industry, however, is not without its challenges, particularly in the area of employee benefits and retirement savings opportunities widely available to employees in traditional industries. As cannabis businesses continue to mature, the need for comprehensive company-offered retirement plans has become more pronounced, underscoring the importance of financial security for employees in this rapidly evolving sector.
Retirement Plan Barriers to the Cannabis Industry
One of the primary hurdles in establishing retirement plans, like a 401(k) Plan, for the cannabis industry is its legal status at the federal level in the United States. Despite legalization in numerous states, cannabis remains classified as a Schedule I drug under federal law, complicating banking, taxation, and insurance matters. This classification has historically deterred many financial service providers from offering their services to cannabis-related businesses. This includes retirement plan investment advising, recordkeeping, third-party administration, and custodial service providers. Cannabis companies most commonly hear from these providers, “We do not knowingly accept business from customers or other entities engaged in the business of cultivating, possessing, selling, or offering to sell Marijuana….” Service providers most often expand on this to include companies that appear to work closely with the industry or derive revenue from the industry. However, recent developments, coming in part from better information, education and greater understanding of important additional requirements when supporting the cannabis industry are beginning to pave the way for greater access to retirement plans for the cannabis industry.
To address these challenges and ensure access to important employee benefits for their workforce, cannabis businesses are increasingly seeking innovative and legal solutions for retirement planning. This includes exploring partnerships with retirement plan institutions such as Leading Retirement Solutions that openly advocate for the cannabis sector while leveraging new technologies to facilitate secure and efficient plan administration.
Paving the Way
Since 2017, Leading Retirement Solutions has been dedicated to providing the cannabis industry with retirement savings plans, amassing nearly a decade of experience. Our services extend to a diverse range of businesses, from small enterprises with 3-5 employees to some of the largest cannabis companies operating across the United States. We provide retirement benefits to thousands of cannabis employees, helping those employees to amass tens of millions in retirement savings.
We have provided access to hundreds of cannabis companies wanting to offer their employees a 401(k) or other retirement savings plan. In the last 2 years alone, we’ve supported an 89% increase in cannabis companies offering a retirement plan and an overall 305% increase in total plan participation. These figures underscore our success in fostering financial security and growth for our clients in the cannabis industry, making us a trusted partner in their journey towards sustainable business practices and employee financial savings fitness.
Solutions Designed to Provide Access to Retirement Savings
Leading Retirement Solutions developed fully legal retirement plans designed specifically for cannabis. Enter The Leading Cannabis 401(k)® our cannabis-friendly retirement plan solutions, tailored to meet the unique needs of individuals working in the cannabis industry.
From our CEO, Kirsten Curry, “LRS has worked tirelessly to help the hundreds of thousands of employees in the cannabis industry to get access to retirement savings benefits with their employer. It’s not justifiable that the employees of the cannabis industry have been largely denied access to employer-sponsored retirement savings plans. We are pretty passionate about it and have an unwavering desire to continue to support this growing professional workforce.”
We understand the challenges and opportunities that come with working in this evolving and heavily regulated field. Our goal is to provide a comprehensive solution that helps cannabis professionals plan for a secure and comfortable retirement. With our specialized retirement plan, individuals in the cannabis industry can effectively save for their future while navigating the regulatory landscape.
Look Forward
By working with Leading Retirement Solutions, companies and their employees gain access to expert guidance and support in securing their financial future. As the industry expands and transforms, offering comprehensive retirement plans can not only enhance the attraction and retention of top talent but also support the normalization and professional development of the cannabis sector. Securing employees' financial futures in this dynamic field is crucial for fostering the industry's continuous advancement and societal integration. Moreover, there is increasing support for legislative reforms to provide clearer directives and assistance to cannabis enterprises in providing retirement and other perks.
For more tips and information regarding retirement plans, contact us.
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About Leading Retirement Solutions: Leading Retirement Solutions is an industry leader in innovative retirement plan solutions for businesses. LRS focuses on improving retirement strategies by offering custom-fit solutions and nontraditional investment opportunities. Our services include plan design, plan administration, recordkeeping, consulting, and more. Leading Retirement Solutions prides itself on helping fellow women-owned businesses, not-for-profit organizations, and small businesses through tax sheltering and employee benefits.
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