Würk wants to be the ADP of cannabis
Last month compliance platform Würk raised $2 million to bring its total seed round to $3 million.
CEO Keegan Peterson spoke to Blunt Network about how the company hopes to change cannabis industry make cannabis workplaces.
Blunt Network: Can you explain the problem you’re trying to solve?
Keegan: Big payroll companies are backed by big banks and so they can’t work with cannabis clients. Until we started Würk, there wasn’t a payroll service bureau out there servicing the cannabis customer base.
Blunt Network: You issue checks, employer paychecks.
Keegan: Correct. We do checks, we do direct deposit and then we also remit taxes on behalf of our clients to the IRS and federal agencies.
Blunt Network: How does it work without Würk?
Keegan: Most people have to pay their employees in cash and use a basic payroll calculator and manually calculate the amount of tax that they have. They have to manually write out a tax form and then they’ve got to go to the government building downtown and submit their taxes in cash. Some of them have CPAs that are doing a quicker job, but nothing very sophisticated.
Blunt Network: What kind of hurdles did you have to overcome to offer this service?
Keegan: We had to find multiple banking partners that work in the cannabis industry. We had to develop a technology that could service the different needs of the cannabis industry as well.
What’s unique about the cannabis industry is that each state has its own governing body, regulatory body and each one of those regulatory bodies has a completely different set of rules that those businesses have to follow. We had to have a technology that could be flexible for each state rule.
Blunt Network: What is your expertise?
Keegan: I’ve spent the last eight years consulting, selling and implementing large workforce management software applications for a company called Kronos. I worked with large retailers on how to bring software in to make their business more efficient and drive compliance.
Blunt Network: With cannabis, do you expect that a software like yours is eventually going to be mandated by states?
Keegan: Not mandated like a seed to sale. The trend that we’re seeing is that each one of these states wants to track and monitor their employees. They want to have them badged, they want to have them background checked. They want to know who’s hiring who, who’s firing who.
I think there’ll be a trend for states to keep doing that as they continue to legalize. Our software right now is the only software that can handle that. I don’t know if it’ll be mandated though.
Blunt Network: Who do you consider your competitors?
Keegan: Right now, our biggest competitor is doing nothing and paying employees in cash. That’s what we’re seeing the most across the United States. Right now we’re operating in 12 different legal cannabis states. A lot of the folks that we’re taking on are coming from a cash environment. We’re also seeing a lot of them use CPAs to calculate taxes.
We haven’t seen a real technology company outside of someone who operates within a small state that we see regularly at this point.
Blunt Network: You’re basically doing what ADP does, right?
Keegan: Yes. We’re the ADP of the cannabis industry.
Blunt Network: What do you think the Trump administration will do about the cannabis industry?
Keegan: The interesting thing that’s going on right now is the Trump administration came in and really seems like they don’t want to get rid of the cannabis industry, but they do want to make sure that it’s compliant with the laws and regulations that have been put in place. Our business handles a large portion of that compliance.