Cannabis Accounting: What Your Clients Need to Know

Not only is it PS’s entire mission to treat your business as our own, but we also foster each partnership with the humble understanding there is no PS without you. • Cannabis Accounting Education and Training—Provides seminars, workshops, whitepapers, and templates guiding bookkeeping professionals and business owners in operating their cannabis businesses compliantly. If a financial institution does elect to bank the industry, it must have strong internal procedures to ensure compliance with relevant federal and state laws, including anti-money laundering. In certain scenarios, the financial institution may be required to file suspicious activity reports and must understand the nuances of such filings as they relate to cannabis and cannabis-related industries.

• From banking to transportation of goods; from seed to sale; from payroll to paying bills, there are challenges that most businesses do not have to deal with that hinder day-to-day operations.
• When managing tax compliance and planning for cannabis businesses, it is crucial to stay updated on the ever-changing legal landscape to ensure accurate reporting and maximize tax benefits.
• Companies that grow, manufacture, and sell their own cannabis products can fold more expenses into the “cost of goods sold,” the only allowable deduction under the current tax code.
• We’ll help you minimize your tax liability, optimize your financial performance, and keep your business running smoothly.
• Considering that just 12 years ago there were only two states with legal recreational cannabis, it is not hard to see where the trend is heading.
• In compliance with this, cannabis-related businesses follow strict limitations when reporting taxable income, with the cost of goods sold being the only deductible expense.
• The National Association of Cannabis Accounting and Tax Professionals (NACAT Pros) was founded to standardize bookkeeping, accounting, and tax practices in the Cannabis industries.

What is a dispensary chart of accounts, and why is it vital for cannabis businesses?

You’ll need to help them understand that “getting their books done” means more than reconciling every single transaction in their business — though that’s a crucial part of it to ensure the business doesn’t get shut down. And with your professional help, they won’t have to, especially when the FDA and GMP regulators start weighing in to create — and impose — strict guidelines. Federal law, on the other hand, still identifies marijuana as a Schedule I substance, contradicting the legal status of cannabis https://www.bookstime.com/articles/truckers-bookkeeping-services at the state level. Third-party bookkeepers and payroll professionals specializing in cannabis are limited. The more details you provide for each transaction, the easier it will be for your accountant to have the time to achieve the more thoughtful assignment of CoGS concerning your taxes.e more thoughtful assignment of CoGS concerning your taxes. There are differences between recreational and medical marijuana that will have a major impact on how you conduct business and do your dispensary bookkeeping.

• Since many of these principles are not required for everyday small business accounting, a generalist accountant may not be familiar with them.
• By leveraging their expertise, accountants help ensure that your advertising and marketing efforts meet regulatory requirements, mitigating potential risks and enhancing your business’s reputation within the industry.
• Join over 1 million businesses scanning & organizing receipts, creating expense reports and more—with Shoeboxed.
• We encourage you to connect with multiple different accountants on this list in order to determine the best one for you.
• Cannabis businesses aren’t able to take deductions like most businesses can, which means that they are not legally able to take advantage of tax benefits for incurring expenses like…
• With this core foundation, PS provides hands-on customized bookkeeping services to businesses across America.

GreenGrowth CPAs

Welcome to The Canna CPAs, your trusted source for comprehensive accounting and financial services tailored specifically for the cannabis industry. With expertise in cannabis accounting, cannabis bookkeeping, and cannabis tax preparation, our dedicated team of professionals understands the unique challenges and opportunities that businesses in this rapidly evolving field face. To serve them well, a bookkeeper or accountant needs to understand these industries, Cannabis, CBD/hemp, the state/federal issues, and have good work papers, systems, and tools. In assisting cannabis businesses with mergers and acquisitions within the industry, accountants play a crucial role. They provide expertise in evaluating financial aspects, ensuring compliance solutions are met, and strategizing M&A strategies for successful transactions.

Next Level CFO

According to one estimate, US cannabis businesses could bring in a yearly profit of $130 billion by 2024, which means both you and your client have a lot of earning potential. No longer will cannabusinesses have to jump through hoops and hurdles and pay crazy expensive fees to secure their money at a reliable financial institution. You should also be aware of the cannabis tax code system and potential upcoming alterations. The stringent Section 280E remains imposed on larger-scale cannabis commerce to financially deter businesses from entering expansive trafficking operations. Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is  intended to be  a referral service for attorneys and/or other professionals.

• To manage cash flow effectively, accountants can recommend setting up detailed budgets, closely monitoring expenses, and analyzing revenue streams regularly.
• Cannabis Gross Sales are material in the cannabis industry, but at the end of the day, how much profit and cash are you able to generate?
• To begin reaching out to awesome accountants in cannabis, see Ganjapreneur’s verified list of accountants and bookkeepers above!
• After a recent announcement of support by President Biden, federal officials have moved to reclassify marijuana as a less-dangerous drug, a historic shift for the United States.
• Given the ongoing federal illegality of marijuana-related transactions, financial institutions must develop a deep understanding of marijuana laws and regulations to service these businesses.

Are you a CPA who works in the industry, or do you represent a cannabis accounting firm? A profile in the Ganjapreneur Business Index also comes with additional features and marketing tools. With the complexities of running a legal cannabis business, you have enough to look after without worrying about your costing and financial reporting. We’re here to streamline your back office and dispensary accounting needs. As a cannabis accountant, I talk with many new cannabis business owners who have worked extremely hard to get their license but then need lots of help with the actual running of their business. The Safe and Fair Enforcement Act of 2021, known as the SAFE Banking Act, looks to change that.

Unlock the secrets to triumph in the dynamic realm of cannabis entrepreneurship with “How to Run a Profitable Cannabis Business” by Sandy Suchoff. Immerse yourself in an enlightening journey that delves deep into the distinctive financial challenges that confront visionaries in this flourishing industry, setting them apart from their counterparts in traditional business landscapes. Armed with invaluable expertise, this guide equips ambitious entrepreneurs with indispensable strategies, unveiling the pathway to conquering these obstacles with finesse.

What To Look For In A Cannabis Accounting Firm

Ganjapreneur hasn’t worked with each service provider directly, but all of these businesses are active, cannabis-friendly providers in the industry. We encourage you to connect with multiple different accountants on this list in order to determine the best one for you. These factors create an enormous need for CPAs who are excited about entering a fast-growing and intricate niche, which consists of farming, chemical manufacturing, food production, and retail.

The Canna Accountants & Tax Professionals, LLC

By working closely with an accountant familiar with the nuances of the cannabis industry, you can optimize your tax strategies and navigate complex tax laws effectively. TreeStar Solutions is a leading accounting firm specializing in providing comprehensive financial services to all types of businesses, including cannabis dispensaries, growers, manufacturers, producers, transportation services, and more. Our tailored approach incorporates a robust medical marijuana accounting 4-part system, offering expert guidance, cutting-edge tools, efficient work papers, streamlined processes, and top-notch accounting and tax solutions. With a track record of supporting over 800+ professionals, we empower businesses to rapidly establish world-class accounting practices and accelerate their growth within a short timeframe. With legalization spreading rapidly across the nation, the cannabis industry is only just beginning to thrive.

What to look for in a cannabis accountant:

Shoeboxed is an expense & receipt tracking app that helps you get reimbursed quickly, maximize tax deductions, and reduce the hassle of doing accounting. NACAT Pros founders have been nationally featured in dozens of major accounting and Cannabis publications including Forbes, Accounting Today, MJ Biz Daily, the Wall Street Journal, and many more. The National Association of Cannabis Accounting and Tax Professionals (NACAT Pros) was founded to standardize bookkeeping, accounting, and tax practices in the Cannabis industries. Dext Prepare – allows you to collect client paperwork, accurately extract data and automate processing into any general ledger, streamlining your workflows so team members can work more closely with clients. Pursuant to the Cannabis Law, the Cannabis Control Board is charged with the creation and implementation of a social and economic equity plan in consultation with the Chief Equity Officer and Executive Director, and after receiving public input.