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compliance

July 08 2021

How to Prepare to Sell Your Cannabis Business

Preparing to Sell Your Cannabis Business

The $2.1 billion Trulieve-Harvest acquisition is paving the way for a boom of M&A activity in the cannabis industry. 

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Filed Under: Compliance, marketing, Operations, Accounting

June 24 2021

8 Benefits of Outsourcing Cannabis CFO Services

Benefits of Outsourcing Cannabis CFO Services

Managing a cannabis company’s finances is an entirely different beast when compared to financial management in any other industry. Cannabis's classification as a federally illegal substance presents complex, unique challenges to business owners...

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Filed Under: Compliance, Business, Accounting

May 11 2021

5 Ways Cannabis Companies Benefit From Enhanced Controls

The strong control environments utilized by public companies in the cannabis industry provide a powerful blueprint for best practices that private cannabis companies can learn from and build on. These controls can: provide greater accountability within the organization, lower the risk of...

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Filed Under: Compliance, Business, Accounting

May 05 2021

What Cannabis Businesses Can Learn from the Harborside Inc. Case vs. the IRS

In late April, a U.S. appeals court rejected an attempt to end Section 280E of the IRS tax code by California-based cannabis company Harborside Inc.

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Filed Under: News, Compliance, Accounting

April 30 2021

Why and How the IRS Audits Cannabis Businesses

In comparison to mainstream industries, cannabis businesses have considerably greater odds of being audited by the IRS. Why the IRS prioritizes auditing the cannabis industry may come as no surprise to the majority of cannabis business owners across the US. However, we weren't aware of how...

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Filed Under: Compliance, Taxes

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...

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Filed Under: Compliance, Taxes, Accounting

April 24 2020

Role of a Receiver and the Benefits of Receivership

This post is part 2 in a series about economic receivership. Catch up on the first part, “Receivership for Cannabis Businesses” for more information. 

  • Cannabis businesses can't file for bankruptcy; receivership is an alternative solution.
  • A "receiver" is someone appointed by the court...
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Filed Under: Compliance, Business, Finance, Accounting

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 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 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...
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Filed Under: Compliance, Taxes, Finance, Operations

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...
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Filed Under: Compliance, Taxes

February 04 2019

METRC Cannabis Tracking, Reporting & Compliance

 

Learn how to use METRC to comply with state reporting and track and trace requirements. 

  • Cultivators, manufacturers, retailers, distributors, testing laboratories and micro-businesses – must comply with the METRC reporting standards.
  • METRC uses standard Radio Frequency Identification...
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Filed Under: California, Compliance

January 31 2019

Tax Preparation Checklist for Cannabis Operators

Follow this checklist to gather everything you need to fill out your  cannabis tax return.

  • You will need your tax returns for prior two years, plus copies of your sales, excise, and local tax returns. 
  • Make sure you have your income statements ready as well as your P&L and balance sheets. 
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Filed Under: Compliance, Taxes

January 24 2019

What to Expect in a Tax Audit

Tax audits are relatively common in the cannabis industry – here's how to prepare for one at your business. 

  • Make sure your sales, inventory, employee, and tax records are detailed and thorough. 
  • Be prepared with historical financial records, receipts, tax returns, and anything else you...
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Filed Under: Compliance, Taxes, Finance

December 06 2018

Lessons for Cannabis Operators from Harborside vs. IRS

Learn from Harborside Health Center's misfortune and make sure you file and pay your taxes on time.

  • Harborside v. the IRS was a case that shows just how aggressive the IRS is in punishing errors on your cannabis business taxes.
  • It's important to streamline your operations to maximize...
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Filed Under: News, Compliance

November 08 2018

Everything You Need to Know About Cannabis Standard Operating Procedures

Standard operating procedures aren't just an important part of your license application; they're also the backbone of a strong cannabis operation. 

  • SOPs offer detailed, step-by-step instructions for running a business in this complicated regulatory environment.
  • There are eight areas...
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Filed Under: Compliance, Business

October 04 2018

IRS Penalizes Cannabis Operator for Federal Income Tax Evasion

The IRS fined an Oregon cannabis operator for failing to file income tax returns on his legal cannabis operation. 

  • Cannabis business owner Matthew Price did not report nearly $1 million in income and used his business money on personal expenses in violation of federal tax regulations.
  • This...
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Filed Under: News, Compliance, Taxes, Oregon

September 18 2018

Common Cannabis Bookkeeping Mistakes (And How to Avoid Them)

Cannabis operators can avoid these five common bookkeeping mistakes by employing various checks and balances throughout their operations.

  • The massive amount of cash used in the cannabis industry puts you at risk for human error and fraud in accounting.
  • Make sure you are appropriating sales...
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Filed Under: Compliance, Business

August 21 2018

5 Tips for Great Cannabis Business Accounting

Take some of the stress out of running your cannabis venture by setting up a strong accounting system.

  • Start with a chart of accounts that can help you keep track of everything.
  • Even if you can’t deduct everything from your taxes, you should still keep track of ALL your expenses.
  • Revisit...
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Filed Under: Compliance, Taxes

August 15 2018

How the 280e Tax Regulation Affects Your Cannabis Business

The 280e prevents legal cannabis businesses from deducting certain business expenses on their tax returns.

  • Cannabis is still a federally-regulated Schedule I Controlled Substance, which means the 280e applies to legal cannabis operators. 
  • The taxable amount of a cannabis business is often...
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Filed Under: Compliance, Taxes

July 11 2018

A Quick Guide to California's Cannabis Packaging and Labeling Requirements

Cannabis products must be properly packaged and labeled according to new guidance from the California Department of Public Health. 

  • Packaging for edibles must be opaque (not transparent).
  • All packaging must be child-resistant.
  • Labeling requirements are detailed – read the list below.

...

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Filed Under: California, Compliance

June 25 2018

July 1 Is The Deadline For New Cannabis Testing & Packaging Regulations

In January 2018, California enacted Prop 64, and officially legalized recreational cannabis. As a courtesy, a six-month transition window was put into place for cannabis businesses to make the necessary adjustment to comply with new California cannabis testing and packaging regulations....

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Filed Under: California, Compliance

April 11 2018

Part 2: Los Angeles Cannabis Zoning

Los Angeles, California recently released a series of additional regulations to reduce any negative impact or confusion regarding the cannabis industry.

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Filed Under: Compliance, Licenses

December 14 2017

How To Get a Cannabis Seller's Permit for January 1, 2018

California's legal cannabis market opens for business in January 2018: here's what to expect

  • All cannabis businesses in California must register with the California Department of Taxes and Fees Administration for a seller's permit and regularly file sales and use tax returns.
  • If you do...
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Filed Under: Compliance, Licenses

December 11 2017

California’s Cannabis Excise and Cultivation Taxes (and Penalties)

Questions about cannabis excise and cultivation taxes in California? Read this complete guide for everything you need to know.

  • Retailers are responsible for collecting the cannabis excise tax and then for paying the tax to the distributor.
  • Excise tax is set at 15% of average market price. 
[Read more...]

Filed Under: Compliance, Taxes

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