Tax Strategies for Cannabis Companies

tax accounting webinars Apr 16, 2019

If you’ve paid attention to what’s going on in the cannabis industry, you’ll have noticed a number of decisions that have been handed down from the US Tax Court regarding how cannabis companies are improperly managing their tax strategies. Due to 280E, cannabis companies are extremely limited in terms of what they can deduct from their taxes. Because of these limitations, taxes are a much heavier burden on cannabis companies than most typical businesses and start to eat away at profit margins. There are legal ways to properly minimize tax liabilities for cannabis companies, but most unspecialized or untrained accounting professionals aren’t aware of them and can potentially get their clients into tax trouble. Every entity is different and must apply the rules in different ways, using different strategies. Here are a few strategies that we use to support our clients and share with our community of cannabis accounting professionals.

 

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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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Harborside Case Review and Lessons for CPAs, Dispensary CEOs & Investors

Background: Harborside Marijuana Facility Runs Into Trouble

The IRS just handed down yet another decision that further cements their position on the cannabis industry and how these businesses must deal with 280e and the other tax laws that restrict them from the same benefits that most other businesses use to save money. Here’s what happened.

Harborside Health Center, owned by Patients Mutual Assistance Collective Corporation, was one of the largest dispensaries in California. This action followed an unsuccessful civil forfeiture case where the federal government wanted to force them out of their lease (citing 280e). Harborside then decided to use the government's lack of action to their advantage, which ultimately didn’t work out in their favor in the end. Harborside sold many products other than medicinal cannabis, and also offered classes and services to their clients. Based on the wide range of products and services offered, Harborside wanted to be able to make tax...

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Cannabis Owner Gets 7-Months in Prison & Pays $263k Restitutions to the IRS | Cannabliss Court Case

As cannabis accounting professionals, we get a number of inquiries from cannabis businesses that insist that they can cut corners and tip-toe around the rules.

Here’s the thing… CANNABIS IS STILL ILLEGAL.

The first federal sentencing of a legal marijuana business owner for tax crimes is set to take place on November 1st. Partial owner of Cannabliss Dispensary in Eugene OR, Matthew Price has been sentenced to federal prison and $263K in restitution by the IRS.

No matter how many people advised him not to, Mr. Price was caught for failing to report nearly $1M dollars in company income when he commingled the money with his personal expenses. Buying sports cars, Rolex watches, vacations, and even homes were just some of his 'business' purchases.

As an accounting professional, YOU are the expert. It's important that you help your clients understand the importance of proper accounting in this industry and the repercussions of negligence. The problem is that most of the time...

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COGS and Navigating 280E for Cannabis and Their Various Entities

tax accounting webinars Aug 24, 2018

We get a number of inquiries from accountants and cannabis CEOs alike who are unsure and unaware of how to navigate their accounting challenges.

 280E dictates what cannabis companies (or any company that sells… what are classified as drugs), can and cannot deduct as expenses. While many are aware of 280E few are familiar with cannabis COGS and the various rules for different entities.

In this webinar we touch on 280E and 471 and how these different tax codes affect  dispensaries, grows, and extracts.

In terms of COGS, we preview some of the tools that we use to determine the cost of growing different strands over time for our clients.

 ...and more!

 Catch the replay HERE

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