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Blog

Jim Breese

Recent Posts

September 14 2020

IRS Guidance on Cannabis Businesses

The IRS has clarified guidance for the cannabis industry.

  • 280E applies to all cannabis businesses no matter if the business is legal or illicit
  • Form 8300 must be filed with every transaction that is $10,000+
  • Cannabis businesses should calculate CoGS based on Internal Revenue Code 471
[Read more...]

Filed Under: Taxes, Finance

September 08 2020

Cannabis CPA vs Local General CPA

As tax extensions are coming due, we wanted to share some ‘insider’ thoughts about choosing a CPA to prepare your cannabis business tax returns.Over the past 45 days, our team has been increasingly getting on calls with cannabis operators that chose to go with a local, generalist CPA firm...

[Read more...]

Filed Under: Compliance, Taxes, Accounting

June 18 2020

Analyze and Optimize Cannabis Cultivation Cost Per Pound

An accurate cost per pound is the basis for setting up a sustainable, profitable cannabis cultivation business. 

  • Improve the value of your cultivation business by keeping detailed SOPs for each employee's job description. 
  • Implement strong tracking systems to see the trajectory of...
[Read more...]

Filed Under: Finance, Accounting

June 08 2020

Financial Forecasting for Cannabis Businesses

A financial forecast is a roadmap for growing your business sustainably – here's how to build one. 

  • A financial forecast helps you to track your progress month to month and know how your business is performing compared to the plan.
  • Track variables such as seasonality, tourism, weather...
[Read more...]

Filed Under: Finance, Operations, Accounting

May 13 2020

Maine & Missouri Update Cannabis Laws and Restrictions

Missouri House Passes Bill to Eliminate Medical Cannabis License Caps

Great opportunity if you want to become a cannabis multi-state operator!

[Read more...]

Filed Under: News

May 01 2020

Break-Even Point for a Cannabis Dispensary

 

The faster your cannabis operation hits break-even, the sooner you become profitable – here's how. 

  • Start keeping track your sales, number of transactions, weather, events in the areas, specific promotions, and headcount for the day and even big news headlines for every day.
  • Examine...
[Read more...]

Filed Under: Business, Finance, Operations, Accounting

March 11 2020

Cannabis Dispensary Layouts

The physical layout of your cannabis dispensary can influence your sales, customer service, and overall growth. 

  • The layout of your cannabis store impacts how you schedule and utilize your employees, control your inventory, and serve your customers.
  • The layout is influenced by your...
[Read more...]

Filed Under: Finance, Operations

March 04 2020

Cannabis Excise Tax Calculation Updates for 2020

As of January, 2020, distributors need to know about the CDTFA's changes to California's cannabis excise tax. 

  • Distributors will need to pay the excise tax more frequently, and the basis that they calculate the cannabis excise tax on could be lowered, but the markup on that basis has...
[Read more...]

Filed Under: California, Taxes, Accounting

February 12 2020

4 Important KPIs for Cannabis Dispensaries

These four key performance indicators are vital to keeping track of your operation's growth and success. 

  • Dispensaries that just look at sales will miss bigger picture indicators of their business's health. 
  • Other KPIs you should track are normalized sales, average gross margin, labor...
[Read more...]

Filed Under: Finance, Operations, Accounting

February 05 2020

Embezzlement: How to Spot the Warning Signs in Your Cannabis Company

Recognize signs of fraud and embezzlement at your cannabis operation before it becomes a bigger problem.

  • One way to spot embezzlement is if cash logs do not reconcile correctly against daily POS reports.
  • If you start receiving notices that you're late on tax payments, that could also...
[Read more...]

Filed Under: Finance, Operations, Accounting

January 29 2020

Best Practices for Cannabis Dispensary Cash Handling

Learn how much of your cash is for taxes and for business operations to avoid penalties down the road. 

  • Start with your taxes: calculate what your expected tax bill would be for each month, quarter, and year – that's what you need to have as your savings goal.
  • Make sure your team is...
[Read more...]

Filed Under: Business, Operations, Accounting

December 18 2019

Understanding Cannabis Nursery Businesses

 

Learn whether a cannabis nursery is the right investment for your business. 

  • Nurseries are a great way to diversify your cannabis operation.
  • Nurseries can be quite lucrative if you focus on perfecting a strain. 
  • Cannabis cultivation, excise, and sales taxes apply differently to ...
[Read more...]

Filed Under: Taxes, Business, Finance, Operations

December 11 2019

Optimizing Multi-Unit Cannabis Business Operations

To grow sustainably, evolve your cannabis business by centralizing certain business functions at headquarters to create economies of scale and specialization. 

  • Outsource inventory management, purchasing, accounts receivable and payroll to a central headquarters to take administrative...
[Read more...]

Filed Under: Case Studies, Finance, Operations

December 05 2019

CDTFA Cannabis Excise Tax Update for 2020

Last month, the California Department of Tax and Fee Administration announced an increase in the cannabis excise tax. Starting January 1, 2020, the new markup rate will be 80%, an increase from the original markup of 60%.  

[Read more...]

Filed Under: California, Taxes

November 29 2019

Using Functional Interviews to Reorganize Your Cannabis Company

A functional interview can help make sure you have the right employee working in the right role for their skillset. 

  • A functional interview assesses an employee’s knowledge, skills, and experience.
  • After a business combination, use functional interviews to determine what each employee...
[Read more...]

Filed Under: Business, Finance, Operations

November 12 2019

Leveraging Real Estate, Assets, Cannabis Licenses for Better Cash Flow

Investments in real estate, licensing fees, and partnership agreements offer the opportunity for new revenue streams – here's how. 

  • Lease a bigger space and invite other operators to open a business under your license, and use space in your location. 
  • You may not sub-license cannabis...
[Read more...]

Filed Under: Compliance, Licenses, Finance, Investing, Operations

September 24 2019

Mergers & Acquisitions in the Cannabis Industry

This post is the second in a two-part series on mergers and acquisitions in the cannabis industry. Read the first part, “Mergers & Acquisitions in the Cannabis Industry - Due Diligence” for things to know about performing due diligence on an M&A deal between two cannabis operators.

  • There...
[Read more...]

Filed Under: Finance, Investing

September 12 2019

How Are Taxes Covered Under Cannabis Partnership and Operating Agreements?

Set up a formal partnership agreement to protect your business interests and make sure your taxes are allocated equitably. 

  • A partnership agreement covers things such as ownership, distribution of profit and loss, length of the business relationship, and the roles and responsibilities for...
[Read more...]

Filed Under: Taxes, Finance

September 03 2019

Managing Cannabis Employee and Contractor Payroll with Cash

The 280E regulation forces cannabis operators to pay their employees in cash – here's how to do so safely.

  • Whether members of your workforce is classified as "employee" or "contractor" impacts how you pay them and what taxes you take out.
  • Make sure every employee signs a receipt verifying...
[Read more...]

Filed Under: Compliance, Taxes, Finance, Operations

August 26 2019

Weekly Licensing Update - August 26

This week’s cannabis updates from the state of California come from Los Angeles, Hesperia, Sacramento, and Oceanside. Plus, an important update in regards to starting a hemp business in the US. 

[Read more...]

Filed Under: California, Licenses, Finance

August 23 2019

Mergers & Acquisitions in the Cannabis Industry - Due Diligence

In the first of a two part series, learn how to do your due diligence on all aspects of a company's financial records and licenses.

  • Hire a due diligence team of lawyers, CPAs, operations engineers and any other experts to learn about the state of the company you’re purchasing. 
  • Use...
[Read more...]

Filed Under: Taxes, Finance, Investing

August 09 2019

Filing LA Cannabis Excise and Use Tax Incorrectly Will Cost You

As a cannabis operator, you’re probably sick of having to contend with the many, frequent taxes due to the state and local government. Cannabis distributors, cultivators, and manufacturers are all responsible for different taxes, in addition to federal taxes required of all business...

[Read more...]

Filed Under: California, Taxes

July 23 2019

What to Know About Cannabis Joint Venture Deals

 

A joint venture can give you access to new markets, new sources of revenue, and lower your risk profile. 

  • A joint venture is when two or more business entities enter an enterprise agreement for the purpose of advancing a specific project or business activity.
  • Partners are tied...
[Read more...]

Filed Under: Finance

July 12 2019

Measuring the Financial Health of Your Cannabis Business

 

 

 

These tips can help cannabis business owners evaluate your growth potential, stability, and more. 

  • The more data you can gather about your business, the better. 
  •  Analyze your data once per month in the first year of running your business, then quarterly for the second year and...
[Read more...]

Filed Under: Business, Finance

June 27 2019

Reduce Your Cannabis Taxes with 471 Allocations

 

 

The § 1.471-1 is a tax code that can be applied to reduce your tax burden – here's how. 

  • The § 1.471-1 tax code defines inventory capitalization rules for businesses.
  • If something counts as an inventory costs, it can be considered a COGS and deducted. 
  • Note that allocations under...
[Read more...]

Filed Under: Taxes, Finance

June 24 2019

Cannabis Licensing Update - June 24

This week’s cannabis updates in California are from Los Angeles and Riverside County. 

[Read more...]

Filed Under: California, Licenses

June 19 2019

Managing Your Cannabis Business Fund Flow

 

 

Learn how to budget and allocate your cash so that you don’t miss any important bills and can keep track of your money. 

  • When cash comes in, put some in a safe and some in a bank, depending on how you're paying your bills (electronically or cash).
  • Only keep as much cash on site as...
[Read more...]

Filed Under: Taxes, Finance

June 12 2019

Issues Around Marketing Your Cannabis Business

Advertising cannabis products is strictly prohibited on a federal level, while also being highly regulated on a state-by-state basis – here's what you need to know. 

  • Instagram, Facebook and Google, and other social media companies do not allow cannabis companies to purchase ads on their...
[Read more...]

Filed Under: Business

May 20 2019

Morro Bay, California City and Manhattan Beach Cannabis Update - May 20

This week in California, Morro Bay, Manhattan Beach, and California City each announced updates to their cannabis taxes and local regulations. Here’s what you need to know about running a cannabis business in each of these jurisdictions.

[Read more...]

Filed Under: California, Licenses

May 13 2019

San Luis Obispo County & California Track-and-Trace - May 13

Here’s what’s been going on in the state of California’s cannabis market.

[Read more...]

Filed Under: California, Licenses

May 07 2019

Creating a Killer Pitch Deck for Your Cannabis Company

 

A well-crafted pitch deck can make your cannabis company stand out to potential investors.

  • Keep your deck short: no more than 15 slides.
  • Focus on the "why": why should an investor care about your business over every other investment opportunity?
  • Include ways that your business stays...
[Read more...]

Filed Under: Finance

April 29 2019

Weekly Licensing Update - April 29

Cannabis Business Co-Working Space in Downtown Los Angeles

 

[Read more...]

Filed Under: California, Licenses

April 17 2019

What Cannabis Operators Need to Know About Cash Flow

The sheer amount of cash moving through the cannabis market makes cash flow a critical KPI for cannabis operators. 

  • Cash flow is a contributing factor in the majority of all new business failures, and cannabis operators are at even more of a risk.
  • Strong inventory management is the first...
[Read more...]

Filed Under: Finance

April 15 2019

Weekly California Cannabis Regulation Update: April 15

This week in California was relatively quiet, with a few updates related to Los Angeles cannabis ordinances.

[Read more...]

Filed Under: California, Weekly Update

April 11 2019

Cannabis Delivery and Online Ordering 101

Cannabis delivery is a great way to reach new customers and add an additional revenue stream – here's what you need to know to get started. 

  • You may not sell cannabis through social media, but you can advertise online and through cannabis-specific sites like Weedmaps, Leafly, and ...
[Read more...]

Filed Under: Business

April 08 2019

Weekly Cannabis Regulation Update: Marina, Los Angeles, & West Hollywood

This week’s top cannabis updates from California come from Marina, Los Angeles, and West Hollywood.

Here’s the must-read news you need to know.

[Read more...]

Filed Under: Weekly Update

April 02 2019

Drive Cannabis Sales with Customer Education and Staff Expertise

Your dispensary's employees do the lion's share of your marketing – here's how to train them to close a sale.

  • There are lots of advertising restrictions in the cannabis industry – know what you can and can't say before you spend money on marketing.
  • Allow new budtenders to sample products...
[Read more...]

Filed Under: Business

March 27 2019

Franchising Tips for Cannabis Businesses

Franchising is a great way to scale your business, but be careful of some common growing pains. 

  • Franchising is a smart way to bring talented people into an organization.
  • However, you will have less control over your brand and the way it is represented.
  • Franchising is complicated due to...
[Read more...]

Filed Under: Business

March 14 2019

How to Select a Good Location for Each Type of Cannabis Business

Location is everything, but it's very difficult to find affordable real estate for your cannabis business in California.

  • Zoning laws make it very difficult to find reasonably priced real estate for cannabis operators – this will be one of your biggest expenses.
  • Dispensaries in a bigger...
[Read more...]

Filed Under: Business

March 12 2019

Intellectual Property: What IP Can Your Cannabis Company Protect?

Intellectual property is one of the most valuable parts of your cannabis company – make sure it's protected. 

  • IP refers to trade secrets, an entrepreneur’s right to protect his or her original work.
  • You may not get a federal trademark on cannabis, but you may trademark ancillary products...
[Read more...]

Filed Under: Business

March 06 2019

Partnership Audit Rules for Cannabis Companies

Businesses that are structured as partnerships for federal income tax purposes have seen their audit activity increase – here's what you need to know.

  • The general rule under the new partnership audit rule is for partnerships to be taxed at the entity level.
  • Companies should factor in new...
[Read more...]

Filed Under: Compliance, Taxes

March 04 2019

Montana Commercial Cannabis Update

Update for March 4, 2019

It’s been an exciting week. Friday was day 45, halfway called transmittal, when they send the bills to the opposite house. Unfortunately, HB577 the gun rights bill failed to pass committee.

[Read more...]
March 04 2019

March 4th Weekly Round-Up: Commercial Cannabis Updates across California

This week RFPs are out for Commercial Cannabis Business Permits in Nevada County, and grants for California municipalities in support of California’s Cannabis Equity Act.

[Read more...]

Filed Under: Weekly Update

February 27 2019

199A - Qualified Business Income Deduction for Cannabis Operators

The QBI deduction is a complicated one that could help you save money on your cannabis business taxes.

  • Qualified business income refers to the ordinary, non-investment income your cannabis company generates
  • There a number of complexities that need to be taken into account when determining...
[Read more...]

Filed Under: Taxes

February 15 2019

Budgeting for LA’s Cannabis Social Equity Program

An Analysis and Cost Breakdown of LA’s Tier 3 Social Equity Program for Cannabis Businesses

[Read more...]
January 21 2019

Drug Crimes to Cash Crimes

Our SW Territory Sales Manager writes in with his observations of Oklahoma's fledgling cannabis industry.

  • As cannabis becomes legal in more and more states, operators are being newly prosecuted for financial non-compliance and other "cash crimes."
  • An accountant is your best defense against...
[Read more...]

Filed Under: Licenses, Oklahoma

August 03 2018

Podcast: Los Angeles Cannabis Licensing Webinar

On July 25, 2018 we presented all of the information you will need to get your Los Angeles Cannabis Business licensed and started.

[Read more...]

Filed Under: Podcasts

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