Colorado’s New Retirement Savings Law and its Implications for the Cannabis Industry
The Colorado Secure Savings Program is a new retirement savings law that has significant implications for employees and employers in the state. In particular, it has raised questions about how it affects the cannabis industry, which is legal in Colorado, but still prohibited under federal law. In this CannaBlog, we discuss the key features of the Colorado Secure Savings Program and how they relate to cannabis businesses.
Overview of the Colorado Secure Savings Program
The Colorado Secure Savings Program is a state-sponsored retirement savings plan that was signed into law by Governor Jared Polis on July 2, 2021.
Under the Colorado Secure Savings Program, employers with at least five employees who do not already offer a retirement savings plan will be required to enroll their employees in the state-run program. The program will be funded through employee contributions, which will be automatically deducted from their paychecks. Employers will not be required to contribute to the program, but they will be responsible for administering it and ensuring compliance.
The program will offer employees several investment options, including target-date funds and a socially responsible investment option. Contributions will be invested in a Roth IRA, which means that contributions are made after taxes have been deducted, and withdrawals in retirement will be tax-free.
Implications for the Cannabis Industry
The Colorado Secure Savings Program has raised questions about how it will affect cannabis businesses. The program is designed to be available to all employees in Colorado regardless of their industry. Given the federal prohibition on cannabis, employers in the cannabis industry may face challenges in finding financial institutions that are willing to handle their retirement accounts. The state program expressly indicated that cannabis related companies can participate in their solution.
In light of the Colorado Secure Savings Program, businesses in the cannabis industry may need extra guidance and support to ensure compliance and mitigate any potential risks. This is where Bridge West can help. As a leading accounting and advisory firm specializing in the cannabis industry, Bridge West has a deep understanding of the unique challenges faced by cannabis businesses.
The Colorado Secure Savings Program represents an important step toward ensuring the financial security of Colorado workers, including those in the cannabis industry. Cannabis businesses and employees can contact Bridge West for assistance to confidently participate in the program and build a secure future.