Article – Pensions & Investments: Cannabis companies look for legal protection to offer 401(k)s

Here;’s the introduction to the piece

Dafna Revah, co-founder and co-owner of cannabis dispensary CBD Kratom, had a lot of explaining to do when her bank referred her to a record keeper willing to provide her company with a 401(k) plan.

Ms. Revah emphasized that all company products — the tinctures, pain balms, extracts and cannabis-infused chocolate, caramels, gummies and other edibles — were all “federally legal.” None, she repeatedly explained, had Delta-9 THC, the cannabinoid that is illegal under federal law.

“There were a lot of questions,” she said of the record keeper, EPIC Retirement Plan Services. “They wanted clarification on what it is we sell and what it is we do.”

In November 2019, roughly five months after initiating conversations with EPIC, CBD Kratom introduced a 401(k) plan for the company’s 450 employees, a “time-intensive process” that involved multiple meetings with different executives in different departments, rounds of questions and even site visits to the company’s stores, Ms. Revah said.

Each time she’d talk to a new person, she recalled, “they would come down with just more questions. What exactly,” they’d ask yet again, “do you sell?”

Ms. Revah’s company had it relatively easy. Unlike CBD Kratom, many cannabis companies sell products that while legal under state law are illegal under federal law, making it impossible to find a 401(k) plan provider willing to work with them.