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Blog

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 ...
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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...
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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%.  

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

November 06 2019

Can Cannabis Businesses File for Bankruptcy?

The short answer: no. But there are other options.

  • Federal regulations outlawing the sale of cannabis mean cannabis operators can’t file for bankruptcy.
  • Garvin v. Cook and the case of Way to Grow, Inc. indicate the courts won't change their mind. 
  • Cannabis and hemp operators facing...
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Filed Under: Compliance, Taxes, Finance, Operations

October 18 2019

Best Practices for Managing Your Cash on Hand

Learn what expenses to prioritize and ways to optimize your cash flow to stay in business. 

  • Pay your cannabis taxes first, and rent and utilities expenses thereafter. 
  • Know your inventory restock cycle to plan ahead for unforeseen expenses. 
  • Build a rainy day fund with any extra cash...
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Filed Under: Finance, Accounting

October 11 2019

Opportunity Zone Credits for Cannabis Investors & Operators

Investing in an opportunity zone is a great way to support the community while taking advantage of tax credits.

  • Opportunity zones are those where the poverty rate is at least 20% or median family incomes are no greater than 80% of those of their surrounding areas. 
  • The IRS offers...
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Filed Under: Taxes, Investing

October 01 2019

Everything Cannabis Operators Need to Know About Form 8300

IRS Tax Form 8300 must be submitted by any business that receives $10,000 or more in cash in a single transaction or multiple related transactions.

  • The IRS has been auditing cannabis businesses that do not submit Form 8300.
  • This form needs to be filled out any time a business collects...
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Filed Under: Compliance, Taxes, Finance

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...
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Filed Under: Finance, Investing