The Top 5 Pitfalls of Cannabis CEOs (and their Accountants) are Still Making

Cannabis companies are being shut down, fined, and handed down punishments at an alarming rate.

Have you seen the news lately? Cannabis CEO’s are getting in big, BIG trouble, and it’s only going to get worse. The cards are stacked against cannabis businesses in this current political climate. Even with that being the case, some businesses are able to figure out how to not only be profitable, but to do so without getting into hot water with the feds or local authorities.  

Others are cutting corners, cheating the system, or simply not following the rules. While they may get away with it in the short term, there’s the simple fact the crackdowns are only going to get worse and more frequent.

For those that want to run a legit cannabis business, avoid crazy fines, and really lead the pack in operating a cannabis business during this time of growth and opportunity, listen up.

We’re going to discuss 5 common, avoidable mistakes that are getting folks into...

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A Bookkeepers Guide to Cannabis Accounting

Cannabis companies are highly regulated highly complex organizations. These businesses need not only a higher level accountant and a tax professional, but they also need a bookkeeper to manage all of the day-to-day financial transactions that come with operating a cash-based business.

This webinar is not just for bookkeepers, as it is important for anyone that is on the financial team for a cannabis company to understand the roles and to be clear on everyone’s responsibilities. It is essential that Cannabis businesses have a team of financial experts including bookkeepers, tax preparers, and high-level accountants all working together to ensure all of their financial transactions are captured, recorded and reported properly. Otherwise, cannabis companies can be subject to fines and penalties, which include inaccurate record keeping. (see: Altermeds Case)

In this informative webinar, we provide a high-level overview of some of the most important tasks that a bookkeeper...

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Is It Legal to Provide Accounting Services for Cannabis Businesses?

There is a thriving need for complex and accurate accounting in the cannabis industry.

While it is already legal to sell in 30 states, cannabis is still considered a Schedule I Controlled Substance under federal law. Despite how someone may personally feel on the subject, legal cannabis is a booming business segment that has a sizable need for proper accounting practices.

But is it legal? Would the risk that comes with the territory be worth putting your business at risk?

Let’s look at some interesting statistics first:

  • Cannabis sales are growing at an incredibly fast rate, expecting to generate over $10.8 billion in sales in 2019, an incredible increase from the $2.7 billion from 2014. (Source: ArcView Market Research)
  • If Cannabis is Federally legalized by 2020, revenues are expected to reach $35 billion - three times more than the National Football League (Source: Greenwave Advisors)
  • The largest group of cannabis buyers in the world will be in North America, estimated to go...
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$78k in Accuracy Penalties for Cannabis Company for Poor Accounting and Record Keeping

IRS found that due to poor record-keeping, lack of check registers, no physical inventory counts, incorrect Cost of good sold allocations and much more caused $78k in penalties

The Tax Court in Alterman upheld the imposition of a 20% tax penalty on the taxpayer for the underpayment of the tax liability resulting from the deductions taken. Various medical and recreational marijuana practices have been legalized in the majority of the states but the last major hurdle, the Section 280E prohibition,  still keeps marijuana ultimately classified as a Schedule I controlled substance under federal law.

Attorney Henry Wykowski explains, “Nevertheless, it’s a disappointing case and illustrative of the difficulties the industry faces with many – but not all – of the judges in tax court.”

What does this mean?

Watch our Altermeds Case Review HERE to learn how you can avoid running into these issues!

If a business is operating without keeping good...

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Accountants fill a glaring gap in cannabis industry | ElevatedNation.com

Naomi Granger, CPA, MBA, co-founder of Dope CFO, has been recently featured on elevatednation.com. In the article, Granger discusses why well-trained accountants are the missing piece in helping cannabis companies conquer the complex obstacles with tax laws and ultimately stay in business.

To read more at elevatednation.com, click HERE

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Why Serving the Cannabis Industry Can Be Dope for Accountants | GoingConcern.com

In an interview with Going Concern, DOPE CFO founders Andrew Hunzicker, CPA, and Naomi Granger, CPA, explain what common cannabis accounting mistakes CEOs make and why the industry presents a huge opportunity for accounting professionals.

 To read more at GoingconCern.com, click HERE

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5 Biggest Mistake Cannabis CEOS Make that Can Put Them Out of Business… Quick!

cannabis business Apr 23, 2018

With an influx of new businesses in the cannabis space, it is easy to get caught up in the opportunity that this burgeoning market brings. As marijuana makes it’s transition from a street drug to a medicinal substance used in various treatments, to a state-legal - yet Federally classified Schedule I drug, some investors and CEOs are making the crucial mistake of not treating their investments as businesses.

Here are some common missteps that canna-business startups can avoid, and protect their investments.

  1. Not paying enough attention to compliance.  
    Many companies (especially those that have evolved out of the black market) are going from a completely unregulated black market to one of the most regulated industries in the US.  Additionally, many cannabis companies include every vertical: farming, chemical processing, food manufacture, and retail. This adds complexity, as well as many layers of regulation: city, county, State licensing, federal, IRS, FDA,...
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