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Work Comp Exemptions for Marijuana Businesses

Work Comp Exemptions for Marijuana Businesses

As the marijuana business landscape continues to change in California, so do the insurance rules. In many cases, what you don’t know could actually save you money. Nonprofit vs. For Profit With the implementation of the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) in January 2018, adult-use cannabis businesses now have a choice. These businesses may now be organized as non-profit or for-profit. There are advantages and disadvantages to both types of business formats. If you are still deciding which is right or your business, a great article on the pros and cons of each can be found here. Whether you are just starting out or thinking about converting your business from non-profit to for-profit status, you should know that status affects your workers’ compensation insurance. What Does Work Comp Have To Do With It? As you are aware, workers’ compensation insurance is based on the number of employees and their payroll. The more employees you have, the higher your payroll and the higher your insurance premium will be. Non-profit businesses must report all payroll, even for owners and officers. This is an added expense when for-profit businesses can exclude owners and officers from coverage. There are caps for payroll for the following: Executive Officers, Partners, Individual Employers and Members of a Limited Liability Company. The minimum reported payroll for included officers is $52,900 and the maximum is $133,900. However, even those amounts can have a significant impact on the Workers Compensation premium. Have You Made the Change? If your cannabis business has converted from non-profit status to for-profit status, you should be aware that the status...