Take a previously illegal substance, one that has been vilified for decades; make it legal to produce, sell, and consume in some locations and not others; consider the substance to be illegal federally and apply tax treatments as if the substance were still illegal; and you create a level of complexity that can confuse even expert accountants
Cannabis and CBD Accountants Have Their Work Cut Out for Them
It’s true that the legality of marijuana and hemp-based products is constantly changing in our country, and this means any business that wants to profit from these emerging—and mostly unregulated—markets, needs accounting assistance of the highest quality.
Cannabis Companies Are at a Disadvantage
Perhaps a stigma is associated with selling something that was previously illegal, but the fact remains cannabis businesses will find it almost impossible to get off the ground without professional expertise to back them up. Many vendors will not service cannabis companies, and this includes banks, merchant services, point of sale vendors, lawyers, and accounting firms.
Many states require cannabis companies to use “seed to sale” tracking systems, which are difficult to use and don’t integrate well with accounting software. They must follow strict accounting guidelines for monthly, quarterly, and annual reporting. Finally, since the industry is brand new, there aren’t many resources for accounting tools, industry guides, or generally accepted accounting principles (GAAP) businesses can follow on their own.
Dope Consulting Is the Cannabis Expert Your Business Needs
This is where Dope Consulting can provide incredible value for businesses interested in producing and selling CBD oils or marijuana products. But how does it work? Many marijuana business owners have done things on their own for some time, and even the most meticulous business plan needs to be reviewed by a certified public accountant. While every client and situation is different, here is what a prospective client should expect:
- The first step is an engagement letter and initial retainer. The engagement letter defines the scope of work to be provided to the client. It includes compensation and a list prepared by the client that serves as a timeline for all deliverables during the duration of the agreement.
- We create an action plan that includes expectations of what the client is to deliver and when.
- Accounting for any business always follows legal documents, so we would need to review these and establish the legitimacy of your business before we can review any transactions.
- We review all pertinent legal requirements for you, depending on your products, to make sure you are in compliance. This includes review of any prior tax returns.
We are your trusted cannabis CPA. We firmly believe in the power of collaboration, regardless of the services you’re seeking when you start working with us. With a broad range of cutting-edge financial consulting solutions, including tax services, accounting, payroll assistance, and more, we’re your one-stop shop for all your financial needs.