A Landmark Day for Cannabis: Federal Rescheduling Is Here — What It Means for Your Business
What cannabis operators actually need to do now — not just what changed.
If you’ve been watching the news this week, you already know: Acting Attorney General Todd Blanche has signed an order moving FDA-approved and state-licensed medical marijuana from Schedule I to Schedule III of the Controlled Substances Act. The industry is celebrating. And honestly, there’s a reason to.
But here’s what we’re hearing from operators on the ground: the news creates as many questions as it answers. What applies to you today? What’s still uncertain? And what do you actually need to do inside your business right now?
That’s what this article is about.
What changed — and what didn’t
Rescheduling to Schedule III applies immediately to state-licensed medical operators. This is real, meaningful change — not a headline. For medical operators, the 280E tax burden that has punished cannabis businesses for decades begins to lift.
What hasn’t changed: Recreational cannabis in adult-use states still requires further federal rulemaking. A hearing is scheduled for June 29. If you operate in both medical and adult-use, you’re in a transitional period where the two sides of your business may be treated differently — for tax purposes, for payroll, and for federal compliance.
That complexity is real. And it’s exactly where operators are most exposed right now.
The 280E opportunity — and the catch
For covered medical operators, the most immediate impact is the removal of 280E restrictions. For years, 280E has blocked cannabis businesses from deducting ordinary operating expenses — payroll, rent, benefits, professional fees — leaving effective tax rates well above 50% for many operators.
With rescheduling, those deductions open up. That’s meaningful cash — cash that can go back into your workforce, your compensation structure, and your ability to compete for talent in a market that still struggles to retain good people.
The catch: your payroll records, benefits data, and expense tracking need to be clean and audit-ready to actually capture these deductions. Retroactive relief for prior years is being encouraged by the DOJ but is not guaranteed. The operators who will benefit most are those whose books are in order today — not scrambling after the fact.
What smart operators are doing right now
The operators we’re talking to aren’t waiting for certainty. They’re using this moment to clean up the operational gaps that have accumulated under years of compliance pressure and cash flow strain. Specifically:
- Auditing payroll records to ensure expense categorization is airtight for 280E transition
- Reviewing compensation and benefits structures now that reinvestment becomes more viable
- Separating medical and adult-use operational records for hybrid businesses ahead of the June 29 hearing
- Engaging tax advisors now — not after IRS guidance drops
Where UZIO fits in
UZIO was built for exactly this kind of moment — when the rules shift and operators need their HR and payroll infrastructure to move with them, not against them.
Our platform is purpose-built for cannabis businesses, which means your payroll data is already structured to support legitimate federal deductions. As IRS guidance on the 280E transition is released, we’re updating our platform in step — so you’re not manually translating regulatory change into operational process.
More importantly: rescheduling means the business case for investing in your workforce just got stronger. Better margins mean room to build competitive compensation, real benefits, and the HR programs that help you keep the people you’ve worked hard to develop. UZIO helps you do all of that — in one place, without the compliance risk.
The window to get ahead of this is now.
If you’re not sure whether your payroll and HR infrastructure is ready for the 280E transition — or if you’re running a hybrid operation and need clarity on what rescheduling means for your specific situation — let’s talk. Our team works exclusively with cannabis operators and can walk you through exactly where you stand.
→ Request a conversation with a UZIO cannabis specialist at uzio.com
UZIO is a leading HR, payroll, and benefits platform purpose-built for the cannabis industry. This article is for informational purposes only and does not constitute legal or tax advice. Please consult a qualified tax professional regarding your specific circumstances.
Recommended Reading: Biggest pain point with Payroll and HR software
Get in touch with us for an expert-led demo to know more about UZIO all-in-one payroll software.
UZIO’s February 2026 Product Release – Exciting New Features Now Live!
Great Falls, VA.
February brings one of our most comprehensive releases yet — strengthening compliance, increasing payroll flexibility, and expanding mobile-first workflows across the platform.
What’s New in February
Time Tracking Enhancements
• Advanced break eligibility rules (including CA compliance and CBA support)
• Greater control over early clock-ins and kiosk break restrictions
• Granular mobile and web time clock permissions
• Custom weekly scheduler start day
• Quick resend of kiosk PINs
Time Off Improvements
• Employee-level work schedules (5×8, 4×10, custom) for accurate PTO and holiday pay
• Clear distinction between manual balance adjustments and earned accruals
Payroll Enhancements
• Bulk upload of third-party deductions into active payroll runs
• NY MCTMT PrompTax per-payroll support
• New consolidated Census and Payroll report
Integrations
• ZayZoon and Payactiv Earned Wage Access integrations with automated deduction handling for EWA programs
Mobile and HR Upgrades
• Employer resources accessible on mobile
• Full login and two-step authentication management on mobile
• I-9 Section 1 signing on mobile
• Smarter E-Verify routing and I-9 alerts
• New “Seasonal” employment type
This release reflects our continued focus on compliance automation, mobile accessibility, and operational flexibility — especially for growing, hourly-based workforces.
For more details about any of these features, please click here. For any other query, please email info@uzio.com or give us a call at (866) 404-0284.
A word from the CEO:
“Right from the beginning, we have instituted a company culture where our team members make an extra effort to listen to the feedback from our customers and are always on the lookout for ways to improve the end user experience.” said Sanjay Singh, CEO of UZIO Technology, Inc. “A number of enhancements in this release are the direct result of a collaborative working relationship we have with our customers where their feedback is listened to and given high priority as we make investment in our product roadmap.“
About UZIO Technology Inc.:
With over 150+ broker partners, 1700+ Employers relying on UZIO and 70+ carriers serving plans, UZIO offers an Integrated HR, Benefits Administration, and Payroll technology platform for brokers, employers, and employees in the SMB space. UZIO enables SMBs to manage HR and compliance with its user-friendly platform and advanced features.
UZIO’s May 2025 Product Release Continues- Exciting New Features!
Great Falls, VA.
We’re excited to share several important updates to the UZIO platform—each designed in response to your feedback to enhance your experience with Scheduling, Time Off balance report, and Payroll process automation. These enhancements will streamline daily operations, improve reporting accuracy, and reduce manual work across your teams.
Key Highlights
UZIO – Paycor Integration
Managing benefits in UZIO and payroll in Paycor? Say goodbye to double entry. This integration automatically syncs employee benefit deductions from UZIO to Paycor, and keeps employee data updated from Paycor to UZIO, minimizing errors and saving time every payroll cycle.
Persistent Scheduling View
Your scheduling workflow just got more efficient. UZIO now retains your selected date range, view mode (day/week/month), applied filters, helping you stay focused and avoid repetitive setup.
Enhanced Time Off Balance Report
We’ve added new fields and improved formatting to support better internal reporting and easier Excel analysis.
For more details about any of these features, please click here. For any other query, please email info@uzio.com or give us a call at (866) 404-0284.
A word from the CEO:
“Right from the beginning, we have instituted a company culture where our team members make an extra effort to listen to the feedback from our customers and are always on the lookout for ways to improve the end user experience.” said Sanjay Singh, CEO of UZIO Technology, Inc. “A number of enhancements in this release are the direct result of a collaborative working relationship we have with our customers where their feedback is listened to and given high priority as we make investment in our product roadmap.“
About UZIO Technology Inc.:
With over 150+ broker partners, 1700+ Employers relying on UZIO and 70+ carriers serving plans, UZIO offers an Integrated HR, Benefits Administration, and Payroll technology platform for brokers, employers, and employees in the SMB space. UZIO enables SMBs to manage HR and compliance with its user-friendly platform and advanced features.
The 401(k) Shake-Up in Cannabis: What SMBs Need to Know and Do Now
1. What’s Going On with 401(k) Plans in the Cannabis Industry?
In 2024, a wave of 401(k) plan terminations hit the cannabis industry as several major custodial providers abruptly pulled out due to ongoing regulatory uncertainty. This move left many cannabis employers scrambling to find replacement providers and safeguard their employees’ retirement savings.
Despite growing compliance efforts and a workforce of over 440,000, cannabis companies continue to face exclusion from basic financial services—401(k) plans included. With only about 7% of cannabis employees currently enrolled in retirement plans (compared to 52% in other industries), this gap highlights a critical challenge—and opportunity—for cannabis businesses in 2025.
This blog unpacks what’s changing, why it matters, and what proactive cannabis employers can do right now to stay ahead.
2. Why It Matters to Cannabis SMBs
For small and mid-sized cannabis businesses, offering a 401(k) isn’t just about compliance—it’s about credibility.
1. Attracting and Retaining Talent
With mainstream industries offering competitive retirement benefits, cannabis businesses without a 401(k) risk losing top talent to better-equipped employers. In a tight labor market, benefits like retirement plans make a real difference in offer acceptance and long-term employee loyalty.
2. Supporting Financial Wellness
Financial stress is a silent productivity killer. When employees feel secure about their future, they’re more focused and engaged at work. A 401(k) plan is a simple yet powerful way to boost financial well-being across your workforce.
3. Building Trust and Legitimacy
Offering retirement benefits signals maturity and professionalism. It tells employees—and the broader market—that your cannabis business is here to stay, not operating on the fringe.
In short, a 401(k) plan can be the bridge between being seen as just another startup and becoming a respected employer in a competitive space.
3. Common Challenges for Cannabis Employers Offering 401(k) Plans
Despite the clear benefits, cannabis businesses face a unique set of hurdles when it comes to offering 401(k) plans. These aren’t just technical issues—they’re systemic roadblocks that require tailored solutions.
1. Provider Pullouts
In mid-2024, several 401(k) custodians exited the cannabis space with little warning. This sudden withdrawal left many businesses scrambling to protect employee accounts and avoid compliance risks.
2. Regulatory Grey Zones
Federal illegality continues to scare off many national financial service providers, especially those bound by cross-state or federal regulations. Even those who want to help often lack the compliance infrastructure to do so.
3. Limited Banking Relationships
Secure, long-term banking partnerships are already tough in cannabis. Layering retirement plan administration on top adds complexity most small teams aren’t equipped to handle.
4. Low Participation Rates
Many cannabis employees, especially younger or hourly workers, may not see the value of long-term savings—or may prioritize more immediate financial needs. This contributes to industry-wide underutilization of benefits like 401(k)s.
Despite these headwinds, the story doesn’t have to end here. Next up: what you can do.
4. What Cannabis Employers Should Do?
The challenges are real—but so are the solutions. Forward-thinking cannabis SMBs can still offer meaningful retirement benefits by taking a few strategic steps.
1. Work with Cannabis-Friendly Providers
Seek out financial partners who specialize in serving cannabis businesses. These providers understand the regulatory nuances and offer compliant, tailored 401(k) solutions. If you’re unsure where to start, work with a benefits broker experienced in the cannabis sector—they often have vetted connections.
2. Communicate Early and Often
If your 401(k) provider is exiting the space, don’t wait. Proactively communicate with employees about the change, outline next steps, and reassure them their savings are secure. Transparency builds trust during uncertain transitions.
3. Educate Employees
Don’t assume employees will “get it.” Host short info sessions, share simple guides, or bring in an advisor to explain how 401(k)s work and why they matter. Education is key to increasing participation and appreciation.
4. Advocate as an Industry
Join forces with cannabis trade associations or HR coalitions to push for better access to financial services. Support legislation like the SAFER Banking Act, which could unlock more retirement plan options if passed.
5. Stay Compliant
If switching providers, ensure proper rollover procedures are followed and that all plan documents meet IRS and DOL requirements. Non-compliance can trigger audits and penalties.
5. How UZIO Can Help?
At UZIO, we understand the challenges cannabis businesses face in offering compliant, competitive 401(k) plans—and we’re here to help simplify the process.
1. Integrated Platform
UZIO (The 1st Payroll & HR System with AI at the Core) brings payroll, HR, benefits, and retirement plans under one roof. This means fewer vendors, easier compliance, and seamless data sync across systems.
2. Cannabis-Friendly Solutions
We work with providers who support the cannabis industry, helping you avoid last-minute terminations and giving your business a stable, scalable benefits infrastructure.
3. Hands-On Support
From provider transitions to employee education, our team helps you every step of the way to ensure your 401(k) offering is successful—for both your business and your people.
6. Final Thoughts
The shifting 401(k) landscape is a wake-up call—but it’s also an opportunity. Cannabis employers who act now can position themselves as responsible, future-ready businesses that truly invest in their teams.
Don’t let regulatory roadblocks slow you down. Let UZIO help you build a benefits package that attracts talent, builds trust, and secures your team’s future.
👉 Talk to our team today to see how easy it can be to bring a retirement plan back to your cannabis business—without the headaches.
Recommended Reading: Biggest pain point with Payroll and HR software
Get in touch with us for an expert-led demo to know more about UZIO all-in-one payroll software.
UZIO’s May 2025 Product Release – Exciting New Features!
Great Falls, VA.
We’re excited to announce the release of the UZIO platform, which brings several important improvements based on your feedback, designed to enhance accuracy, visibility, and efficiency across Payroll and Time Tracking workflows.
Key Updates Include:
- Improved Holiday Hours Distribution Logic
Accurately tracks hours when employees work on holidays, especially when no premium pay is applied. - One-Time Deduction Override in Payroll Grid
Deductions can be overridden in special payroll runs, even if they are not scheduled, without needing to modify deduction settings for each employee. - New Work Location & Department Fields
Easily identify and manage employees in the Payroll Grid and Import Template using new fields.
For more details about any of these features, please click here. For any other query, please email info@uzio.com or give us a call at (866) 404-0284.
A word from the CEO:
“Right from the beginning, we have instituted a company culture where our team members make an extra effort to listen to the feedback from our customers and are always on the lookout for ways to improve the end user experience.” said Sanjay Singh, CEO of UZIO Technology, Inc. “A number of enhancements in this release are the direct result of a collaborative working relationship we have with our customers where their feedback is listened to and given high priority as we make investment in our product roadmap.“
About UZIO Technology Inc.:
With over 150+ broker partners, 1700+ Employers relying on UZIO and 70+ carriers serving plans, UZIO offers an Integrated HR, Benefits Administration, and Payroll technology platform for brokers, employers, and employees in the SMB space. UZIO enables SMBs to manage HR and compliance with its user-friendly platform and advanced features.
UZIO’s March Product Release Continues – New Enhancements Are Now Live!
Great Falls, VA.
We’ve made a few updates to improve transparency and keep everyone better informed about profile changes:
Profile Change Confirmation Emails to Employees
Employees will now receive an automatic email confirmation whenever any changes are made to their profile, whether by themselves or by a company admin. This ensures they’re always in the loop.
Improved Employer Notifications for Employee Changes
As you know, UZIO notifies employers when an employee updates their own profile. We’ve now enhanced this experience to reduce email overload:
- Multiple changes are grouped into a single summary email
- Emails are sent at 30-minute intervals if multiple updates occur
These enhancements are designed to increase visibility while keeping communication efficient and less disruptive.
For more details about any of these features, please click here. For any other query, please email info@uzio.com or give us a call at (866) 404-0284.
A word from the CEO:
“Right from the beginning, we have instituted a company culture where our team members make an extra effort to listen to the feedback from our customers and are always on the lookout for ways to improve the end user experience.” said Sanjay Singh, CEO of UZIO Technology, Inc. “A number of enhancements in this release are the direct result of a collaborative working relationship we have with our customers where their feedback is listened to and given high priority as we make investment in our product roadmap.“
About UZIO Technology Inc.:
With over 150+ broker partners, 1700+ Employers relying on UZIO and 70+ carriers serving plans, UZIO offers an Integrated HR, Benefits Administration, and Payroll technology platform for brokers, employers, and employees in the SMB space. UZIO enables SMBs to manage HR and compliance with its user-friendly platform and advanced features.
UZIO’s March 2025 Product Release – Exciting New Features!
Great Falls, VA.
We’re excited to introduce the latest UZIO Product Updates for March 2025! This release focuses on greater payroll flexibility, and enhanced security to make your experience smoother and more efficient.
Key Highlights:
- Pay Group Functionality – Create and manage multiple pay schedules within the same pay frequency, organizing them by location, department, or pay cycle for enhanced payroll flexibility and efficiency.
- Payment Method Override During Payroll Processing – Need to change an employee’s payment method for a single payroll run? Easily override from direct deposit to checks without altering default settings.
- Mandatory 2-Step Verification / Two Factor Authentication (2FA) Coming Soon – Strengthen account security with an extra layer of protection.
For more details about any of these features, please click here. For any other query, please email info@uzio.com or give us a call at (866) 404-0284.
A word from the CEO:
“Right from the beginning, we have instituted a company culture where our team members make an extra effort to listen to the feedback from our customers and are always on the lookout for ways to improve the end user experience.” said Sanjay Singh, CEO of UZIO Technology, Inc. “A number of enhancements in this release are the direct result of a collaborative working relationship we have with our customers where their feedback is listened to and given high priority as we make investment in our product roadmap.“
About UZIO Technology Inc.:
With over 150+ broker partners, 1700+ Employers relying on UZIO and 70+ carriers serving plans, UZIO offers an Integrated HR, Benefits Administration, and Payroll technology platform for brokers, employers, and employees in the SMB space. UZIO enables SMBs to manage HR and compliance with its user-friendly platform and advanced features.
