Cannabis and hemp/CBD accounting is overwhelming for CEOs and seasoned accountants alike. At times, both niches can seem impossibly complex and leave you, the accounting professional, with a headache as you sift through state and federal rules and regulations.
Your clients’ success hinges largely on you unraveling the tangle of rules and regulations and implementing the necessary processes required to keep Cannabis companies compliant. Few standard procedures and controls have been set in this emerging industry, but you can still provide exceptional accounting services that allow your clients to run profitable and sustainable businesses. With proper training and resources, along with an understanding of your clients’ pain points, you can learn to navigate the common issues in Cannabis and hemp/CBD accounting, gain a competitive edge, land more clients, and help CEOs who are desperate for your services.
You can be the solution to the challenges facing both you and your clients by understanding these accounting pressure points:
The good news is, you nor your client is alone in experiencing these frustrations. Each and every one of these obstacles can be used to your advantage as an accounting professional. Once you receive the tools and training to find solutions to these issues, your cultivated expertise could be the remedy Cannabis and hemp/CBD companies seek.
As you ease the common pain points experienced by CEOs in the Cannabis and hemp/CBD industries, you’ll also open up these opportunities:
Thousands of new Cannabis and hemp/CBD CEOs are filing business licenses each year in these high-growth markets. Even in an economic recession, sales remain steady. Each of these CEOs need an expert to navigate the tricky rules and regulations.
That’s where you step in.
When you become highly trained in either Cannabis or hemp/CBD, you will likely be able to charge higher fees, because you will be offering essential value-add services to clients who absolutely need you to keep their business moving forward.
This industry is young, but many Cannabis CEOs have been privy to the cautionary tales (see Altermeds) of what happens when taxes and deductions aren’t completed accurately and correctly. By minimizing your clients’ risk of audit failures and maximizing their profit margins, you help them sleep better at night. Many Cannabis and hemp/CBD CEOs will compensate you well for this contribution, so you could potentially build a sizable annual revenue with a smaller number of clients.
The frustration of insufficient tools and workpapers, along with big firms’ reluctance to serve the Cannabis and hemp/CBD industries has created a high barrier of entry into these niches.
For those accounting professionals who may be interested in these markets—other solo/small firm accountants, CPAs, EAs, and bookkeepers—they often don’t know where to begin. Their hesitancy is your opportunity. One way to combat these barriers is by aligning yourself with mentors, coaches, and your industry’s community. By building a network, you can problem solve with niche-trained professionals, refer work to one another, and ease the headaches everyone struggles with in both Cannabis and hemp/CBD.
Multiple Client Sources
Many budding Cannabis and hemp/CBD accounting professionals struggle to generate leads and potential clients, yet numerous CEOs need help and don’t know how to ask for it until you approach them with assessments and expert industry knowledge. Understanding the complexities of Cannabis and hemp/CBD accounting, along with the accompanying migraines, allows you to offer specific solutions that alleviate those tensions and earn you clients.
You can begin lead outreach through platforms such as LinkedIn where CEOs and operators search for professionals with niche-specific aptitudes and resources. When you begin to effectively help more CEOs stay compliant and successful, you may start collecting referrals, as other prospective clients often seek recommendations from their peers.
These clients could come from areas outside your current location since you can work remotely and aren’t necessarily limited to specific regions (depending your state board’s specifications). You have the potential to build a national practice and help those who need your services, potentially increasing your client base and revenue.
Early investors (institutional and private) in the Cannabis space focused less on accounting and transparency. After valuations plummeted and significant capital was squandered in companies such as MedMen, investors learned to not simply fund “good products” and ideas. Today’s investors are much more demanding of emerging Cannabis and hemp/CBD startups in an attempt to avoid a similar fallout. They will require ironclad books, which means you need to know how to implement precise internal controls, accounting policies and procedures, create a permanent audit trail, and amass a robust accounting team that includes Cannabis and hemp/CBD accounting and tax experts who can provide accurate and timely reporting.
By implementing efficient systems and accounting processes now, you are setting Cannabis companies up for success both in daily operations and future progress as they seek strategic partners for accelerated growth.
You have the opportunity to transform these common Cannabis and hemp/CBD accounting headaches into hope for confused CEOs. In doing so, you can also end your own pain of trying to find a niche that is profitable, rewarding, and booming so you can add some spark back into your accounting life (and a better paycheck).
What’s the prescription? A good place to start is the DOPE CFO program, where you can learn to maximize the value that you bring to Cannabis companies and the CEOs that so desperately need solid accounting services.