Cannabis startups are much more complicated than traditional startups. They face a set of unique challenges that require accountants to be clear on state licensing rules and federal regulations regarding controlled substances, making Cannabis companies 10x more likely to fail than non-Cannabis.
We’re not talking about not being successful in business -- we mean getting audited and paying massive fines, criminal charges against CEOs for illegal market activity, loss of licensure, and running out of money due to poor financial planning and insights.
We promise there’s a way to help things run smoothly and set your clients up for long-term success. It just requires understanding the day-to-day challenges a Cannabis startup faces and dedicating yourself to learning the skills necessary to help your clients navigate those issues.
Cannabis accounting software is hard to come by, and options that do exist are abysmal at best. Most vendors won’t come near the federally illegal industry. Also, the software that is available tends to be buggy and won’t typically integrate well with your clients’ existing accounting software.
Without efficient “out-of-the-box” software solutions in place, you’d have to resort to pen and paper and archaic spreadsheets. Not only is that method time-consuming, but it’s also incredibly error-prone and inconvenient. You need smooth, systematic, and repeatable software solutions and workarounds to streamline accurate Cannabis accounting, which will keep keep your clients profitable and compliant.
We questioned more than 800 accounting professionals that are currently in the DOPE CFO program and are successfully helping clients. To help you navigate the...
If you’re a Cannabis accounting professional, or are working towards learning how to serve clients in this space, you may have already experienced the frustrations of trying to reach out to Cannabis clients, only to be told that you’re not needed because they “already have an in-house bookkeeper” and that they’re sure their current accounting system is just fine. Until Cannabis CEOs understand that their practices are often inaccurate and self-damaging (as they likely don’t have access to or an understanding of the cost accounting tools required), they may not understand until they’re slapped with a severe penalty.
Understanding the myths that business owners believe about Cannabis accounting can give you a leg up on understanding their perspective, and may better form how you pitch your value to them when you do reach out. For every myth they believe, you can counter with a well-researched answer, illuminating the consequences of...
Properly quoting accounting fees is complicated in any industry, but establishing a pricing policy for the wily Cannabis and hemp/CBD niches can be especially challenging and overwhelming.
If you find it hard, or even scary, to price your Cannabis and hemp/CBD accounting services without undercutting your value, you are not alone.
Many accountants struggle with raising their fees beyond low hourly rates. Learning how to package your services, create clear offers to reflect your value, and develop a system for charging appropriately for cleanup, onboarding, and ongoing work will enable you to confidently set your price and find clients who will happily pay it.
Here are six easy steps you can take to make sure you're pricing your Cannabis accounting services correctly.
Stop charging for your hours and start charging for the value of your work. This is a complicated numbers game with ever-changing rules and regulations....
What is the first thing you think of when you hear the word “Cannabis”?
Did your thought(s) lean negative or positive?
The stigma surrounding the Cannabis plant often prevents seasoned accounting professionals from entering the Cannabis niche. There is sometimes a fear of not maintaining professionalism or damaging their reputation when they sign Cannabis clients, or a resistance to working with a federally illegal product and the accompanying tax complications.
You’re here, however, which means the Cannabis niche has piqued your interest. For a second, put aside your preconceived notions, and let’s address typical industry concerns and the potential opportunities.
Many people still think of Cannabis as a gateway drug that could lead to habitual hard drug usage or encourage laziness. This perception has been drilled into the brains of Americans since the early 1900s, when propaganda ...
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.
Proper cost accounting is essential for all Cannabis and hemp verticals, but it gets particularly tricky when you're dealing with cultivation. From the moment a seed is planted in the ground to the harvest of the crop, high-level accounting procedures are mandatory to keep cultivation companies compliant.
Cannabis growers tend to be uninformed as to the importance of proper accounting. Often focusing more on the science and passion of growing, they have little patience for numbers. Because the growers take such pride in their operations (and need to be educated on the processes and regulations required to keep those operations compliant with the IRS), you may have to work harder to prove the necessity of sound accounting practices.
Cannabis and hemp both require different approaches to monthly accounting and year-end taxes. Cannabis is federally illegal, although more than 30 states have licensed businesses to sell legal medicinal and/or recreational marijuana. Hemp has...
Cannabis accounting is a complex, ever-changing niche due to the plant’s federally illegal status (regulations and rules vary from state to state). One key (but extremely complicated) aspect of Cannabis accounting is seed to sale tracking and compliance. Cannabis business owners can easily flub these complex accounting and compliance processes without the help of a trained Cannabis accountant on board. Even worse, inaccurately inputting seed to sale data can lead to significant penalties or even loss of license.
Because the seed to sale processes are complex, difficult to understand, involve several sub niches, and are a veritable maze for Cannabis CEOs and accountants, it takes some skill and understanding to fulfill state and federal accounting and tax requirements. As an accountant, you are in a powerful position to add significant value to a client’s company by expertly navigating the seed to sale process....
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...
As with any other major industry, access to quality insurance coverage is of the utmost importance for Cannabis companies. Most big-name insurance carriers, however, won’t come near the Cannabis industry due to the plant’s classification as a Schedule 1 drug, which also makes it federally illegal. With so many vertical moving parts, Cannabis companies need insurance for equipment, employee benefits, E&O, and various other aspects of their operations.
There are, however, plenty of insurance companies that will write policies for Cannabis businesses, and it appears that there isn’t a whole lot that they won’t cover (for a price, of course).
The first step in getting the coverage that companies need is finding an insurance agent that is knowledgeable in the Cannabis industry’s needs and requirements, and having them tailor a policy package that suits your business’ vertical structure. By consulting with an experienced agent, the Cannabis...