At this point there aren't any service providers in the US who have served a state-legal Cannabis company; including accountants, bookkeepers, attorneys, marketers, plumbers, realtors, electricians, etc, that have faced any legal repercussions for simply providing service to a state legal Cannabis company (and there are likely hundreds of thousands of service providers out there, and that number is growing quickly). That said, find and follow your state laws, your state accountancy board, and also review the sites below:

https://www.aicpa.org/advocacy/state/marijuana.html

Also this link and site provides timely updates around tax and cannabis:

http://norml.org/

IRS site on 230 and tax advice:

https://www.irs.gov/tax-professionals/circular-230-tax-professionals

Finally, the best policy is to always do world class work, follow all laws and regulations and terminate any clients immediately that you suspect are breaking the law.

Several things make good accounting valuable to Cannabis and CBD/hemp CEOs:

• First, it allows them to correctly maximize tax deductions for Cost of Goods Sold (COGS), and thereby save in tax payments. Tax is a significant expense for Cannabis companies because under IRC 280e, COGS is the only allowable offset to Cannabis income. To correctly maximize this under IRC 471-11, GAAP inventory accounting (including cost/absorption accounting) is required. (Probably 80% or more of Cannabis companies are not following this, thereby losing thousands of dollars)
• Cannabis and CBD/hemp companies are required by most state laws to have strong accounting/financials, and again many are lacking in this area.
• Proper accounting allows CEOs’ better access and communications with lenders and investors, which is a big issue in the Cannabis and CBD/hemp space.
• Good accounting lets CEOs better manage operations and cash flow and gives them a competitive advantage over those who don’t have good accounting procedures. In this industry, it can be the difference between staying in business or losing your license and being shut down.

No, you don’t need to be a CPA to serve in Cannabis. In fact, many CPAs have chosen to not serve in this industry, meaning most Cannabis companies have bookkeepers doing the day to day books. There is a huge need for qualified (meaning educated in Cannabis and CBD/hemp accounting procedures) accountants and bookkeepers to serve this industry.

Our course is designed to be a shortcut into serving the Cannabis and CBD/hemp niches for an accountant or bookkeeper who has a firm (or wants to launch one) without having to figure everything out by trial and error. We’ll outfit you with the proper tools, including:

• Cannabis and CBD/hemp specific chart of accounts
  More than 100 cost accounting workpapers, templates, and charts of accounts
• The knowledge to understand the complexity of 280e, 471a, and other state and federal tax rules
• Ways to tackle the issues of farm, chemical manufacture, food production, labs, distribution, and retail accounting
• Multi-entity, consolidations, intercompany issues
• ...and much more.

The stakes are high for cannabis CEOs, and the fate of their business rests in having an accounting team that understands what is necessary in order to keep their business compliant so that they aren't penalized or shut down. Our goal is to provide tools and guidance to accounting professionals so that Cannabis and CBD/hemp businesses are being properly serviced and can thrive.

Really, it comes down to two things.

1) Are you looking to get your first Cannabis or CBD/Hemp accounting or tax client? If so, we have modules that you can jump right into on day one that will guide you through the process of finding and landing your first Cannabis accounting client. No need to finish the education and training module first; dive right into landing your first client on day one, as well!

2) Ready to service your Cannabis and/or CBD/hemp accounting client? Great! We help you understand how to provide world-class service, as well as give you the downloadable tools that you can use immediately on day one to serve these clients. Everything from properly on-boarding your Cannabis/CBD/hemp client, setting up a perpetual data room, month-end tie-outs, day-to-day bookkeeping, etc. This program is meant to be DIY and plug and play, so you can go through the different modules at your own pace. Our hope is that you'll be proficient in providing Cannabis and CBD/hemp accounting services within 90 days, which is totally possible if you invest on average at least an hour a day into learning and implementing the materials.

Yes, you are able to provide services to Cannabis and CBD/Hemp companies remotely. The most important part is following the regulations in the links above, as well as the state laws where the Cannabis company resides as well as your own state laws. Also if you are a CPA or Enrolled Agent or other certification, make sure to check with your State Accountancy board and/or whatever agency regulates any license you have.

There are many varied sub-niches, which can be very complicated to serve effectively. These sub-niches include farming, processing, manufacture, labs, distribution and retail, and many times all of those will fall under the same company. On top of that, there is a lack of Big 4 industry guides or training, no GAAP guidance, and almost no tools or workpapers outside of our program, making it extremely difficult to serve these clients well and maximizing your time! 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. Cannabis and CBD/hemp accounting professionals need to be aware of these challenges and must be able to help their clients navigate and find solutions so that they can properly operate their business.

Larger accounting firms at this point in time are not heavily involved in Cannabis and CBD/hemp, meaning these multi-million dollar operations must find smaller firms that are willing to help them with their accounting.

Accounting in and of itself is a challenge because software is truly lacking and doesn't cater to the specific needs of Cannabis businesses. Quickbooks and other accounting software don’t have a chart of accounts tailored to Cannabis entities for example. Additionally, most set up complex multi-entity structures, use cost and consolidated accounting, and have complex inter-company transactions.

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 addition, there are even more industry issues such as lack of banking, complex software, state seed to sale tracking, cash management issues, investor reporting, GAAP accounting and inventory management that will affect Cannabis and CBD/hemp business operations.

It turns out this is a very difficult question to answer, most cultivation CEOs have no idea the answer to this, and knowing the answer to this provides better tax deductions, as well as competitive advantage, over most CEOs who don’t know this cost.

Cost of inventory includes raw materials, Work in Process (WIP), and Finished Goods (FG). In cannabis, you start with a raw material which is a seed or a clone, and the cost of this raw material is often $0 (or very little). From there, many clients have a process that is 4-6 months to get this seed to actual sale including growing, replanting, flowering, watering, light issues, harvesting, drying, curing, lab testing, and finally ready for sale.

Over this 180-day period, significant costs get added to this plant including direct and indirect labor, nutrients, soil, water, electricity, security, and much more. And each strain produces a different yield per plant, so each reporting period, you need to know for every plant: % complete, estimated yield, costs to allocate, and how much is in finished goods. Getting this “cost per pound” is a complex issue, and most have no idea how to do it correctly. Our program has a Cannabis and CBD tailored chart of accounts, as well as simple cost accounting work papers that can do this correctly and provide big value to the CEO.

There are several ways to get more information: