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Cannabis Accounting 101: How to Stay Compliant, Reduce Risk, and Maximize Profits
Cannabis operators are challenged at every turn. Regulatory and tax compliance are essential to business continuity, but stringent requirements often come at a cost. Considering the limitations placed upon the industry by IRC 280E, which prevents cannabis businesses from deducting even the most basic business expenses at the federal level, margins are tight (a gross understatement). To ensure success in this challenging environment, operators must apply diligence with their accounting to stay compliant, minimize risk, and maximize profits.
A Local Guide to Southern California Cannabis Taxes: What LA, San Diego, and Riverside Dispensaries Need to Know
Cannabis dispensaries in Southern California have unique tax concerns. In addition to federal taxes and the onerous burdens of IRC 280E, they must maintain separate accounting for state taxes to maximize deductions, while adhering to local cannabis tax legislation that varies significantly from jurisdiction to jurisdiction. Today, we’ll discuss California cannabis taxes, with a particular focus on Los Angeles, San Diego, and Riverside dispensaries, and how local retail taxes can impact their accounting.
Choosing the Right Business Structure: A New York CPA’s Guide for Cannabis Entrepreneurs
The cannabis industry in New York is both challenging and rewarding. Startup costs can be high, but choosing the proper business structure strategically can be the key to maximizing profitability, reducing your tax burden, and streamlining operations. In this guide, we’ll explore what cannabis entrepreneurs and their financial teams need to know about structuring a business for success in New York State.
What Investors Want to See in Your Cannabis Financials
Raising capital in the cannabis industry isn’t just about a good pitch deck and solid vibes. Investors are digging into your financials, and they’re bringing sharp pencils. Whether you're prepping for a seed round, Series A, or strategic partnership, your financial readiness is what builds trust and opens wallets.
How to Prepare for a CDTFA Audit: Tips for SoCal Cannabis Retailers
The California Department of Tax and Fee Administration (CDTFA) oversees state-level taxation, licensing, reporting, and compliance for California cannabis businesses. Since cannabis companies are under extreme scrutiny at the best of times, it pays to keep your books in order, file and pay your taxes on time, and ensure your business licenses are up to date to avoid issues if and when an audit comes your way.
Cannabis Bookkeeping for SoCal Dispensaries: Avoid Common Mistakes That Trigger Audits
Cannabis dispensaries in Southern California face numerous challenges. Although running a business can be profitable, state, local, and federal regulations create an incredibly complex landscape. Adding to that, you’re operating in a saturated and highly competitive market, where banking options are limited and costly, and just about every aspect of the business is high risk. The last thing you need is an IRS audit.
The Budget Process: A Step-by-Step Guide for Marijuana Businesses
Budgeting is critical to business success – perhaps even more so in the cannabis industry as operators grapple with tight margins, regulation, and stringent taxation. Budgeting enables better decision-making and helps business owners establish and track progress toward financial goals. Suffice it to say that with a firm grip on your budget, you’ll be on the road to financial stability in no time.
Budgeting vs. Forecasting: What is the Difference?
Budgets and forecasts are integral to efficient business financial planning. Each process supports decision-making, helping you plan for the future and align strategy to business goals.
The Essentials of Cannabis Inventory Accounting, Procedures, and Controls
Understanding inventory is essential for cannabis operators as it is intrinsically related to regulatory compliance and taxation. The complexities can be monumental as state reporting requirements are stringent and largely dictate how inventory must be reported. Companies can find some relief by capitalizing some assets under 471(c), but this approach can be risky.
Understanding Debt Financing in the Cannabis Industry: The Ultimate Guide
Cannabis businesses are inordinately challenged to obtain financing. Traditional lenders are unwilling to take the risk, and stigma remains due to federal restrictions in this highly regulated field. That said, some lenders understand the unique dynamics of the industry, opening doors to growth through debt financing and allowing cannabis operators to obtain the capital they need without sacrificing business equity.
How to Raise Capital for Your Cannabusiness
Access to capital is the lifeblood of any cannabis operation. Finding investors is the first step. Accurate financials, a compelling brand story, and concrete plan for the future are just a few of the elements you need to win investors over. We walk through the essential steps and opportunities you need to consider for raising cannabis capital.
High Profits, Low Cash? Welcome to the Cannabis Biz Paradox
Cannabis accounting is complicated! But if you’re perplexed about the lack of cash on hand—despite running a profitable business—it’s a conundrum you need to solve.
Today, we’ll dive into the differences between cash flow and profits, deconstruct the paradox, and provide actionable tips to help you manage both like a pro.
Keep the Green Flowing: Top Cash Flow Tips for Cannabis Businesses
If your cannabis business struggles with cash flow, it’s only a matter of time before it will all catch up to you. But take heart—many cannabis operators are similarly afflicted, so you’re not alone. And let’s face it: running any kind of business is hard. But the cannabis industry is particularly challenging for reasons that are no fault of yours. Regulation, compliance, and 280E taxation are just a few reasons why profits are scarce. Adding to the challenges, competition is fierce, suppliers are scarce, and inflation is affecting every aspect of day-to-day operations.
Manufacturing KPIs to Track for Financial Success
Efficiency is the bedrock of cannabis manufacturing success. Costs are rising, regulatory frameworks are evolving, and supply chains are becoming more fragmented. Overcoming these challenges requires meticulous planning, tracking, and analysis of key performance indicators (KPIs).
Navigating New Mexico’s Cannabis Tax Landscape: A Dispensary Owner’s Guide
The Cannabis Excise Tax and GRT can be a compliance headache for dispensaries in New Mexico—but avoiding penalties and protecting your profits starts with staying ahead of the rules. We broke down the must-know facts and links in our new article.
Surviving the Squeeze: What Oklahoma Dispensaries Can Do About Price Compression
Oklahoma’s cannabis industry is in a crunch. With one of the most open licensing systems in the country, the state saw a flood of dispensaries open in record time. But now, many operators are facing a harsh reality: prices are plummeting, margins are razor-thin, and competition is more intense than ever. Here are five strategies Oklahoma dispensaries can implement today to survive price compression—and even thrive in it.
Understanding Your Cannabis Business Cash Flow
Understanding your cash flow is essential to satisfying financial commitments—and it’s the first thing investors and lenders want to see before getting involved. For these reasons, reviewing your cash flow statements and performing cash flow forecasts regularly is vital. Read our guide to cash flow best practices for cannabis businesses.
Top 5 Financial Mistakes NY Dispensaries Make (and How to Fix Them)
Running a NY dispensary? Don’t let these 5 common financial mistakes kill your profits or trigger an audit. From 280E missteps to messy inventory, we break it all down—and show you how to fix it.
What’s the Difference Between a P&L and a Balance Sheet?
Balance Sheets and P&L statements are two of the most common business financial statements. But what’s the difference between balance sheets and P&L? We’ll dive into the details and show you how to use them.
Four Cash Flow KPIs Dispensaries Must Track
Cash flow is the lifeblood of dispensaries. Tracking cash flow and cash flow KPIs can help you stay on top of your shop’s performance. Here are the four KPIs every dispensary must track.