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The Current State of Cannabis Accounting (and How You Can Get Involved)

Where is Cannabis Accounting in 2022? 

Ever since the green wave of Cannabis started sweeping the nation, the state of bookkeeping and accounting has been changed as we know it. With more and more states legalizing both recreational and medicinal marijuana, the need for experienced accounting professionals is higher than ever.

But Cannabis Accounting isn’t as simple as one may hope. You may be familiar with some of the rules and regulations put in place from 280e and 471, but do you know the extent of legal trouble you could be putting your clients through if they’re not compliant? 

From having to pay massive fines to losing their licenses, there is a lot at stake when it comes to accounting and bookkeeping in this industry. 

In this blog, we’ll talk more about the state of Cannabis in the United States today, where it’s going in the future, and how you can assert yourself and your firm as experts in the industry.

What does Cannabis in the U.S. look like today? 

As of April 2022, Cannabis is a $30 billion industry, which doesn’t include the $70+ billion in the illegal market. Those operators in the gray and black markets are just waiting to enter the legal Cannabis space, and that’s looking to be more of a possibility with a federal legalization bill just passing in the House. Currently, 38 states have legalized medical Cannabis, and 16 states have legalized its use recreationally. 

Perhaps the biggest piece of legislation on the horizon is the MORE act, which is a bill that will decriminalize marijuana at a federal level. Though the Cannabidiol and Marijuana Research Expansion Act was unanimously passed on March 24, 2022, there is still a ways to go before we reach full legalization.

On the bright side, even more, states are looking to legalize this year! States like Arkansas and Hawaii are on their way to legalizing, as well as Delaware, whose bill failed to pass this past year. 

If it’s not clear to you already: NOW is the time to jump into this niche and get ahead of the game! Assert yourself as an expert in this field and get clients that value your services.

So how can you join this niche?

If you’ve done any research on this niche as an accounting professional, you may have come across many dead ends. With a lack of educational materials and resources, it can be hard to feel confident enough to take that leap of faith. 

It makes sense, as there are a lot of myths and misconceptions surrounding the industry, and Cannabis CEOs are relying on their accountants to keep them compliant. 

One of the biggest mistakes you could make as a Cannabis accountant is thinking that you can beat 280e and avoid taxes. While some businesses have tried that approach, the IRS is aware of the games companies try to play and have been quick to hand out harsh penalties, fines, and even jail time.

The easiest way to maintain compliance in this industry is to play by the rules and don’t cut any corners. With daily, weekly, monthly, and yearly routines, you can keep track of every transaction from every vertical and not have to worry about uncertainty for tax season.

Looking to grow your firm?

There’s a huge market out there with an even bigger one waiting in the wings. Are you ready to take control of your fiscal dreams and jump into this niche?

With the right tools, you can be working with high-paying Cannabis clients in 90 days, just like many of our DOPE CFO members. 

Stand out as a firm and as an accounting professional in this niche when you sign up for the Cannabis/CBD Accounting & Tax 5.0 Program. Get all the tools, workpapers, and systems you’ll need to become an expert and price your services as one.

If you'd like to learn more about what Cannabis accounting looks like... check out one of our most popular webinars, which has helped others like you reach their fiscal goals and find 6-figure clients. Click here to watch.

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