One lawyer’s passion for ERISA led her to help cannabis companies with retirement benefits
Jewell Lim Esposito enjoys the complexity of ERISA tax law. As a partner at FisherBroyles and head of the law firm’s ERISA/tax practice, she is drawn to advising employers who are looking to bring retirement benefits like 401(k) plans to their workforce.
But Esposito’s job as an ERISA tax lawyer led her in a new direction when in 2017 she was approached by several cannabis companies who were looking for guidance when implementing their own retirement benefits. Questions over legality of cannabis on a state and federal level presented what some would consider a difficult task — but Esposito was up for the challenge.
“There were a number of cannabis companies asking me for solutions, how to have the ordinary perks that non cannabis employees have,” she says.
The U.S. cannabis market was valued at $11.3 billion in 2018, according to data from Grandview Research, a U.S. market research and consulting firm. That number is expected to grow at a compound annual growth rate of 14.5% until 2025, the research finds.
More than 30 states have legalized cannabis, but it is still considered a controlled substance at the federal level. This complicates financial transactions and creates issues surrounding compliance, banking and taxes for cannabis companies. Because of these issues, some businesses are hesitant to offer financial wellness benefits like 401(k) plans to employees.
“Where they get stopped and stumped is when they talk to their financial advisers or third party administrators or other financial institutions that are hesitant to take their money,” Esposito says.
Kristen Curry, CEO and founder of third party administrator Leading Retirement Solutions has worked with Esposito in the past and describes her as a solution seeker. Curry, who is also a licensed attorney, says when she had a question about some clients in the cannabis space several years ago, she immediately called Esposito for assistance.
“It was so natural for me to go to her because of what she’s done for clients in the past,” Curry says.
Esposito goes above and beyond for clients by putting herself in the shoes of the entrepreneur or business owner. She also helps them find solutions that are the most tax advantageous for them, which is helpful for newer entrepreneurs, Curry adds.
“She’s really a solution seeker. She takes on a lot of sticky and challenging issues,” Curry says.
Although Esposito has only been working with cannabis companies for two years, she describes that experience as feeling like “dog years,” meaning she learned a lot about the space over a very short period of time. This work eventually led her to become head of the firm’s cannabis, hemp and CBD practice where she advises companies on how to best bring these benefits to their employees.
“Cannabis companies can have 401k plans. There are 300,000 employees in the cannabis industry. Why should those in the cannabis industry not have the same perks?” she asks.
Esposito also writes for the firm’s blog, AllThingsERISA, which covers the complexity of ERISA plans for employers and occasionally cannabis companies. In the blog, Esposito explains the complexities of ERISA in a way that is easy for employers to digest. She also covers cannabis, and explains that it is a misconception that cannabis companies cannot provide retirement offerings like 401(k)s to their employees. It is this passion for helping employers figure out the best way to bring these benefits to workers that has landed her as this year’s Employee Benefit Adviser Retirement Adviser of the Year.
Not offering benefits like 401(k)s could be putting cannabis companies at a disadvantage. For example, some medical cannabis employers are looking for expert scientists to develop new pharmaceuticals. Providing benefits such as retirement savings could help attract more of these highly-skilled workers to the booming industry, she says.
“What is the whole point of having an employee benefit perk — it’s to be able to recruit, retain and be competitive,” she says.
Cannabis employees are asking for these benefits, Esposito says. Employees want the opportunity to save money for retirement and these plans can provide an easy way for them to do so.
“It gives a mechanism for an employee to save,” she says.
Esposito says she has received some pushback on her work because of the stigma that still surrounds cannabis. But she hopes this will change. Moving forward, she hopes more advisers and employers work to educate themselves on the intricacies of these plans and the benefits for workers.
“I think they do need education on it,” she says. “There’s always this period with certain industries where it’s taboo and I think we’re in this taboo period.”