Cannabis Accounting at Northstar

How Does Accounting Help Cannabis Companies?

For those operating in the medical and recreational cannabis sectors, you’ve likely had your fair share of complications. Despite this being one of the fastest-growing industries in the United States, the financial aspect of this space complicates things.

Unlike traditional businesses that don’t work in cannabis, regulations require cannabis business operators to do certain things and prohibit them from utilizing the same benefits. Even to deduct ordinary business expenses becomes more challenging with 280E’s restrictions.

Our cannabis clients know the value in keeping their companies operating compliantly in this emerging industry. Through proper tax administration and maintaining proper accounting records, cannabis businesses can thrive in the marijuana sector.

Whether you need a licensed CPA, marijuana-specific public accounting expert, or other professionals focused on your success, Northstar is ready to help! Schedule a free consultation to learn all about how our full-service CPA firm will scale your cannabis operations with professional cannabis accounting and bookkeeping services.

Why are Accounting Records Important?

Many businesses try to handle marijuana-related taxes on their own without success. Without internal controls and a firm understanding of excise taxes, federal rules, and other cannabis-specific tax demands, it’s challenging to remain compliant and profitable.

Most business owners find themselves lost in detailing cash flow, recording inventory purchases and sales, and trying to understand their true profit and loss. This is where marijuana accounting comes in to give you peace of mind and a clear path to success.

Even though federal legalization is still a long way off, maintaining accounting records remains critically important. With an effective bookkeeping and accounting system, you won’t even need a treasury inspector general.

Not to mention, you’ll have the data needed to make sound financial decisions for your marijuana business.

As the federal government continues its prohibition of marijuana as part of its list of controlled substances, cannabis business owners must adhere to the rules.

However, with Northstar’s support, you’re always prepared for an audit. Meticulous accounting records keep elevated businesses operating, even though the legal marijuana space is still prohibited at the federal level.

Accounting and tax records bypass back taxes and keep your marijuana-specific operation running as it should. Even if you run one of the many ancillary services, you’ll need to have your books in order to steer clear of IRS audits.

Operating a business in the cannabis industry? Book a free consultation and have a CPA working in the space support your company’s activities today.

Does Federal Law Allow Cannabis Businesses to Make Deductions?

Yes. However, the IRS has a full spectrum of regulations that target these operations to make deductions challenging. Whether your company is involved in sales, distribution, cultivation, manufacturing, or another sector of the industry, it’s essential to understand what’s deductible.

Section 280E facilitates the IRS’s targeting of businesses in this state-legal marijuana space. This code was implemented in 1982 and does not allow marijuana businesses involved in the sale or distribution of Schedule I or Schedule II controlled substances to write off their business expenses.

Most standard business expenses are banned for those involved in or outright selling cannabis. But workarounds exist for Section 280E. Deductions minimizing tax liability are possible. However, this takes some expertise and creativity.

At Northstar, our accounting experts specializing in this industry will help you navigate this complex space. Hold onto your tax dollars and take charge of your finances with our assistance.

To learn how our firm will handle your operation’s financial reporting and accounting needs, book your free consultation today.

Benefits Cannabis Businesses Experience Using Northstar

At Northstar, our team remains in the know about cannabis tax and compliance regulations. We understand the unique challenges that these operations face, and we focus on maintaining compliance with IRS’s rules.

Cannabis businesses have the ability to better focus on their activities while we handle the complex financial landscape of the marijuana industry. With our help, you’ll find more time to earn with financial insights guiding your success.

At Northstar, we help cannabis business owners navigate regulations without subjecting them to the risks of having a general accountant on the job. Learn how our team will support your operations and book your free consultation today.

Northstar’s Cannabis Accounting vs. Generalized Accountants

Northstar’s Outsourced CFO Business Model for a Budding Space

Operating in this space requires an understanding that local and federal law will impact your activities. Even though a generalized CPA firm might be willing to take you on as a client, this highly specialized field demands experts that specialize in it.

Our outsourced CFO services emphasize compliance with state regulations and laws that could impact your operation. These fractional outsourced CFO services give your company access to the cannabis accountant services it needs with flexibility promoting its growth.

Scale your access to these services as your business grows. Or, if you’re experiencing a lull in capital – as many cannabis businesses do – you can scale back our cannabis advisory services.

At Northstar, we scale cannabis companies with their needs and compliance leading our efforts. We keep our services flexible because we understand how this supports our clients’ success throughout the high and low months.

Looking for reliable cannabis cost accounting focused on your success? Book your free consultation with Northstar to learn how we’ll grow your cannabis business today.

Should General Accountants Service The Cannabis Industry?

Whether your operation runs out of Colorado, California, South Dakota, or somewhere else, general accountants should not be servicing cannabis. There’s simply too much risk involved with non-specific accounting and advisory firms.

While you might be tempted to use a general tax professional, the legal implications of having tax liabilities that could lead to an audit simply aren’t worth the potential savings.

General certified public accounts can study the nuances of this sector. However, they need to stay on top of updates that might affect their clients at the state and federal levels. Most of the time, this isn’t something they’re willing to commit to doing.

The cannabis plant is still federally prohibited. This has resulted in the creation of a highly regulated industry that should only be navigated by certified public accountants that understand how to maintain compliance now and once it becomes federally legal.

While the Controlled Substances Act still affects so many aspects of cannabis-related business activities, a single small tax error made by a general accountant can encourage an audit from the IRS.

Accounting for the cannabis industry means knowing the state laws that affect small businesses. But to serve these clients effectively, it’s essential to remain vigilant for legislative changes at all levels, tax cuts for specific industries, and more.

At Northstar, we’re the accounting and tax professionals you want handling your cannabis-related businesses’ finances. Book your free consultation to discover how we’ll support your operation’s success.

Why a Cannabis Accountant?

Northstar’s cost accounting services maintain your compliance with the IRS tax code. With decades worth of combined experience helping the cannabis industry, our team is here to support your legal cannabis activities.

From tax services to bookkeeping services, Northstar is an industry leader among other accounting firms in how we specialize in this elevated space. Generalized accounting services don’t offer the support our cannabis clients need, which is why we remain in-the-know about everything and anything that might impact your company – and you as a business operator.

At Northstar, we’re dedicated to keeping expert cannabis accountant insights accessible to those who operate in this industry. We want to make this option available to ensure you bypass generalized accounting firms that don’t understand the nuances that come with state and federal legislation.

Looking for certified public accountants specializing in the cannabis industry to guide your company’s success? Book your free consultation now and find out how we’ll scale your business with financial reporting and data insights.

Getting Started with Northstar

If you need help with your accounting, Northstar is eager to support you. We understand what’s expected of your business in the cannabis space, including excise/sales tax, accounting for the cost of goods sold, and more to maintain compliance and avoid costly IRS audits.

Book your free consultation now to scale your operations with financial reporting and advisory services.