For budtenders, tips earned in a dispensary can add up to hundreds of dollars per week. However, how that money is pooled and divided is critical for a dispensary operator to understand. Managers and supervisors, be wary.
1. What Is a Tip Pool?
Tip pooling in a dispensary is the practice of taking gratuities received from patrons and customers and pooling either all or part of them to be distributed among employees. It is a routine practice in restaurants and other places where an employee is serving a patron or customer. Because cannabis remains illegal at the federal level, major credit card networks—including Visa, Mastercard, and American Express—do not process transactions for cannabis retailers. As a result, these businesses operate predominantly on a cash basis, which often leads to substantial cash tips for budtenders. Tip pools in a dispensary are generally limited to employees in occupations in which they customarily and regularly receive tips, such as budtenders who provide service directly to a patron or customer and who do not have managerial responsibilities. Failure to carefully implement a legal tip pooling policy can have disastrous results because all of the dispensary’s tipped employees may have a claim if the tip pool is improperly administered.