Understanding the difference between CBD & THC, Hemp & Cannabis is vital if you’re entering into the realm of cannabis accounting.

In our recent podcast, we talked with Summer Wilkinson, co-founder of Leap Books, about the differences and how she got into the industry.

For Full Episode Notes, Visit: http://bit.ly/2oAHzYH

We’re accountants not marketers, right? So, how do we get ourselves out there and get more cannabis accounting clients? In this podcast we outline the 5 Do’s and 5 Don’ts to marketing your cannabis accounting services. For more information, visit DOPECFO.com

Accounting for dispensaries is unique for a number of reasons. If done incorrectly, cannabis CEOs and investors may be putting themselves in a situation where they can be fined, or even lose their licensing.

Some of the key issues we will discuss:

If you are an accountant or a bookkeeper, we highly recommend you to take a look at the opportunities opening every day for this profession in the Cannabis Industry. You indeed need specific training to serve this niche, but we assure you that getting Cannabis accounting expertise will allow you to have a successful career. 

 These are some of the major missteps that cannabis CEOs and accounting professionals make in their business design and operations:

1. Treating investors and employees badly.

Everyone must follow the rules in order for a cannabis business to be compliant. From safety to how cash is handled, if everyone isn’t on the same page, it creates a recipe for disaster.

And while it’s a newly legalized industry and it is growing astronomically, a cannabis business is still a business. Poor accounting practices, lack of executive direction and leadership, an ineffective HR system, and a team that is improperly- or under-trained are all still going to sink the ship, just as with any other business. This can result in potential disputes, legal action, or even the demise of the company.

2. Lack of Compliance function within their business unit(s).

The lack of a Compliance Plan, Chief Compliance Officer, or regular compliance audits can lead to compliance issues, amongst all sorts of other problems. Seemingly countless Federal, state, and local government agencies all have regulations affecting legal cannabis operations. Compliance with these regulations is what is going to keep you out of hot water, so make sure systems are in place to keep up with legislation that applies to your geographical region. Not adhering to these laws and regulations can lead to potential fines, penalties, or even the loss of your license.

Proper cannabis accounting tools make all of this much easier, as well. Cannabis-specific charts of accounts for various cannabis entities, a flower calendar for growers to properly calculate COGS at the various parts of the grow cycle and to maximize the deductions on those costs, and cost accounting workpapers and templates all will help keep the company organized and will save money and reduce tax liability in the long run. 

 If you’ve paid attention to what’s going on in the cannabis industry, you’ll have noticed a number of decisions that have been handed down from the US Tax Court regarding how cannabis companies are improperly managing their tax strategies. Due to 280E, cannabis companies are extremely limited in terms of what they can deduct from their taxes. Because of these limitations, taxes are a much heavier burden on cannabis companies than most typical businesses and start to eat away at profit margins. There are legal ways to properly minimize tax liabilities for cannabis companies, but most unspecialized or untrained accounting professionals aren’t aware of them and can potentially get their clients into tax trouble. Every entity is different and must apply the rules in different ways, using different strategies.  Here are a few strategies that we use to support our clients and share with our community of cannabis accounting professionals. 

 We have all these systems, we have all these complications and things but there are actual tools to make Cannabis Accounting Software work! 

In this episode, we show you step by step the depth of the work that needs to be done and how to get it done with these tools. 

Enjoy and share if it's valuable for you. 

In this "Making It Work" piece, we keep going further into the Cannabis Accounting Software Solutions based on a Sample Transaction of a typical retailer recently made by Andrew to explain what we're trying to do weekly and monthly to make sure we are following the rules for IRS, the investor and the bank. Also, to highlight the system needed to get things done efficiently. 

We hope this example quickly shows you how complex it is and adds a better understanding of the system. 

Enjoy and share if it's valuable for you!

So, following what we’ve been talking about on the Cannabis Accounting Software Issues this week’s episode “Software Accounting Solutions” we tell you all the different software, why some work, why some don’t work and the ones you just have to deal with. 

Be up to date with us because next week we are going to bring you deep insights on how to make it all work for you and your clients.