Plant the entire paper pot with the seedling, they are designed to break down and let the roots through.........although in my experience, this does not happen as easily as the makers of the pots leads you to believe...........due to this I will never use them again as it takes far too long for the roots to get through, which can slow growth, and they need to be constantly wet for it to happen, something that is not a good idea when it comes to growing cannabis.
You are far better to use plastic pots and transplant carefully in the future.