Wurk Helps Marijuana Companies Comply With the IRS and Other Agencies
Thirty percent of marijuana businesses are audited each year by the IRS; adding to that pressure is the threat of new regulations the industry may have to adopt. To ease the load, Keegan Peterson founded Wurk, which helps marijuana companies keep track of all their business records — from payroll to scheduling — so that when the IRS or other agencies comes knocking, everything is in one convenient place.
Peterson started the company last year after a friend who owns a dispensary in town was talking with him about the problems that business owners face in the cannabis industry. "They want to be compliant; they just don't have the tools to do so," Peterson says. "We do our best to help facilitate that. The government gives you a Rubik's Cube and says, 'Hey, figure it out.' Then they change it, and you have to figure it out again."
According to Peterson, whose background is in labor strategies, the biggest problem cannabis companies face is 280e management. Back in the ’60s, a cocaine trafficker was writing off business expenses, but trafficking is illegal to write off on your taxes: 280e was established in response, and now every cannabis business is precluded from filing business expenses because marijuana is illegal federally.
Peterson's goals are to reduce issues with 280e, offer an HR payroll platform built for the regulated cannabis industry, and help marijuana companies understand state-by-state compliance. About 50 percent of its business is here in Colorado, but Wurk also has an office in Portland, Oregon.
Peterson says many businesses he encounters pay their employees with cash and keep track of expenses on an Excel spreadsheet.
"The more I've gotten involved in cannabis, the more I've fallen in love with the industry," he says. "I need to learn about how they're processing payroll, tracking employees' time, and figure out if there are opportunities to improve their process. If there are, we dive in and start recommending things to make their lives easier and businesses more streamlined."
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