Now that most of the nation is holed up under shelter-in-place guidelines, Cannabis and CBD are considered essential (in most states) and sales have been increasing, While other companies are on lock down and laying off their employees, there is truly no time like the present to build your own 100% remote Cannabis or CBD accounting firm.
But how do you even get started? What is the actual process to transfer from a full-time job at a corporate accounting firm to running your own remote accounting practice in a fast-pace niche like Cannabis?
One DOPE CFO student, Tammy L., quickly built her own remote Cannabis accounting firm with hard work and guidance from the DOPE CFO program a little over a year ago. Even when Tammy was laid off a few weeks ago due to coronavirus shutdowns, she still had her remote business and a 6-figure client to help her thrive during these uncertain times.
Tammy made it happen -- all while still working a full time job! This is her...
With Halloween just around the corner, we decided to speak to a certain kind of horror… specific to the accounting industry. The mention of the word “cleanup” is enough to scare any seasoned accountant. We’ve all heard horror stories from our peers about leftover financials that were too tough to tame. Although most of those stories end with the accounting professional saving the day, the path to a successful cleanup can be a bumpy one, to say the least.
Cleanup is the concept of needing to go ‘back in time’ into a new client’s records to clean them up and “fix” all the errors. And rarely does a cleanup involve a few errors; in most scenarios, there are many, many errors. In order to create a rock-solid set of books, the cleanup will have to go back several months but can also need to go back several years.
Understanding the difference between CBD & THC, hemp and cannabis is vital if you’re entering into the realm of cannabis accounting.
In our recent podcast, we talked with Summer Wilkinson, co-founder of Leap Books, about the differences between them all, and how she got into the industry.
CBD can be extracted from the hemp or marijuana. Hemp plants are cannabis plants that contain less than 0.3 percent THC, while marijuana plants are cannabis plants that contain higher concentrations of THC.
THC is the primary psychoactive compound in marijuana that gives the high sensation. It can be consumed by smoking marijuana, or extracting the THC and putting it in some form of edible or topical delivery.
The plants themselves look identical to an untrained eye, making it a bit challenging to identify, as the real difference lies in the chemistry of the plants.
Under the 2018...
So you’ve decided that you want to take the plunge and dive into cannabis accounting. Great!
While these are new and exciting times, it is completely understandable if you have concerns about promoting your business within your personal and professional networks.
People have their opinions about the cannabis industry; some good, some bad. But don’t let that get in the way of promoting your business and becoming an expert.
The truth of the matter is that in order to be seen as an expert, you have to put yourself out there and dive in completely in order to maximize your efforts in this industry. So if you’re hiding out for fear of judgment, we’re here to help.
1. Have an updated LinkedIn profile.
When you’re first getting started with marketing your cannabis accounting business, you don’t have to have it all figured out. You don’t need to build a fancy website or order business cards right away. Over the past few years, LinkedIn has become an...
With the rise in popularity of legal cannabis products comes plenty of regulatory issues to keep up with, analyze, and implement as an accounting professional. Laws and regulations are changing almost daily, so staying in the know is of the utmost importance in keeping you and your clients out of trouble. Keeping up with THC and CBD regulations in the cannabis accounting space can be a daunting and seemingly hopeless task, but we’re here to help. Let’s take a look at some of the legislation that has affected the cannabis industry lately.
Last December 20, Congress passed the Agriculture Improvement Act of 2018 (aka the 2018 Farm Bill), which declassified hemp as a Schedule 1 controlled substance (among other things). Considering that hemp can be any part or derivative of a Cannabis sativa L. plant that contains less than 0.3% THC, CBD would come off of Schedule...
We here at DOPE CFO have been speaking at national conferences and to the press, CEOs, and accountants for quite sometime about how to do things correctly in cannabis accounting. But, we’ve been getting questions from investors, as well: from the billionaires (yes plural) who call us asking how to “fix” a bad investment with poor or no corporate governance, to the local millionaire wondering why he’s getting hit with a big cannabis tax bill, but no distribution from the company, to the average “Joe” on the street who wants to know how to win big in cannabis. We’re here to help. Here are some quick thoughts if you are dead-set on investing in this new industry.
First of all, I get it that right now you can make good money…even on the companies with horrible operations (ie without dropping names like “Med Men”). I also get it that you can make insane money on better run companies, even though they are spending (and losing)...
The idea of value can be a tricky and very misunderstood topic for accounting professionals and CEOs alike. Determining the services that you want to offer and what to charge for those services is the key to building a successful, competitive practice that will create the most ideal scenario for accounting professionals: to work remotely and under less stress, command higher fees, and have more freedom to work as you see fit. The key to understanding your value is to first understand the difference that your services will make in your clients’ business, and how to communicate it to a CEO so that they understand the level of service that you provide and how it will be a catalyst for their business growth. You have to realize your potential value first; otherwise, you may run into trouble getting and retaining clients - or, in some cases, trouble being compensated fairly for the value that you are providing....
What does a pound of weed cost to grow? What are the production factors involved, and how does that affect recordkeeping procedures for growers and their accounting professionals?
In order for cannabis growers to take advantage of maximum allowable deductions under 280E, accounting professionals must understand how to properly determine the true cost of growing/producing their client’s product. The actual operations of a grower is important for accounting professionals looking to serve cannabis companies, as resource allocation during different cycles of a grow will affect their ability to claim allowable deductions. Opportunities abound for accounting professionals to maximize deductions throughout the seed-to-sale process; from labor all the way to distribution…
… and this is where GAAP Accounting comes into play.
Under generally accepted accounting principles (GAAP), absorption costing is required for external...
Whether you have cannabis accounting clients or are looking to specialize and service this industry, you’re going to need a special set of tools and processes. If you haven’t had a chance to check it out, we’ve created an infographic that sort of outlines all of the tools that we use to provide services to our clients. You can check out our cannabis accounting tools here.
In terms of running a thriving cannabis accounting practice, there are a number of challenges that we are faced with. Without proper systems for managing clients, it can create more trouble than it is worth, and eat into profitability.
We get a plethora of questions daily as to how to overcome the challenges that both CEOs and accounting professionals are faced with in this nascent industry that is in hyper-growth. Some challenges include:
Marijuana is legal in several U.S. states, however, it’s still not legal federally. This case causes obstacles for many banks and marijuana-related businesses (MRBs).
President Obama’s administration allowed banks and legally established MRBs to do business, as long as banks complied with the extensive guidelines, which monitored the MRBs’ commercial activities and filed quarterly any suspicious activity reports. But on Jan. 4 Attorney General Jeff Sessions rescind these policies, and uncertainty spread among businesses and banks alike.
By canceling these policies, Sessions is simply giving federal attorneys the option to prosecute in their states. According to the Washington Post, several of the 13 U.S. attorneys in the eight states where recreational pot is legal have said they will only prosecute if a cannabis business has ties to crime or violence”.
What does this mean for banks and MRB’s? With banks and MRBs on shaky footing, Andrew...