What do accountants do to know about accounting in the cannabis industry anyway?
Well, while we cannot speak for all cannabis accountants, we can highlight some of what we do to remain knowledgeable about the cannabis space.
Besides committing to researching and staying up to date on cannabis industry trends, we work directly with cannacompanies to gain insight into the industry. But we also remain vigilant in our efforts to stay updated on legislative changes that might impact our elevated clients.
If you are looking for an accountant in the cannabis space, Northstar’s CPAs are experts in this industry. We stay on top of the space’s latest updates to ensure our clients scale with the opportunities as they present themselves.
Contact us now to speak with one of our experts about how we can scale your operations.
In this post, we cover what accountants do to know about accounting in the cannabis industry. If you have any questions, don’t hesitate to reach out to us directly!
Doing Business with a Cannabis Company
Doing business with a cannabis company a cannabis accountant or CPA means being acutely aware of the industry’s unique complexities. The cannabis industry is heavily regulated, so those working with cannacompanies must be well-versed in the relevant state and federal laws.
But that’s not all. Cannabis businesses also present a number of financial challenges that standard businesses don’t face.
For example, because cannabis is still illegal at the federal level, cannacompanies are unable to take advantage of the same financial infrastructure that other businesses do.
They must also contend with tax laws that don’t apply to other companies. And they may face higher interest rates when borrowing funds because many banks are hesitant to lend money to cannabis-related businesses due to their legal status.
So, as you can see, there are a number of challenges that come with working with cannabis companies. That’s why it’s important to partner with a CPA firm that’s well-versed in the industry and can help your business navigate these complexities.
Updates on Industry Trends
Along with staying up to date on relevant legislation, cannabis accountants must also be aware of industry trends.
This is important because the cannabis industry is constantly evolving. What might be a viable business model today might not be tomorrow.
That’s why it’s important for accountants to stay ahead of the curve and be familiar with the latest trends in the industry. This way they can help their clients keep pace with the rapid changes that are taking place.
Updates on State-Specific Laws
The cannabis industry is still evolving and varies from state to state. This means that accountants must stay abreast of the latest changes to state laws, as these can vary widely from one jurisdiction to another.
Besides keeping track of upcoming legislation, it’s also important for cannabis accountants to stay up to date on regulatory changes that are taking place in individual states and at the local level.
For instance, over the past year, California has engaged in a massive overhaul of its regulatory framework for cannabis businesses. The state will continue to do so, and it’s imperative to stay on top of these changes as they occur.
As such, it’s critical that cannabis accountants are aware of exactly how these changes will impact their clients. This way they can help guide cannacompanies through this transition period and provide expert guidance.
Remain Informed on Federal Policy Developments
In addition to state-specific policy changes, it’s also important for cannabis accountants to stay on top of federal policy developments related to the industry.
Since cannabis is still illegal at the federal level, new rules and regulations can be announced – or old ones repealed – at any time without warning.
Because of this, it’s crucial for cannacompanies to work with an accountant who’s knowledgeable about marijuana legislation on the federal level. This way, the professional can remain aware of any changes that might affect their business and be prepared in advance for upcoming developments.
So, as you can see, working with a cannabis company is unlike working with any other type of business. It requires an intimate knowledge of the unique challenges that cannabis companies face, including but not limited to industry trends, state laws, and federal policy changes.
This is why cannacompanies need to work with a trusted CPA firm in order to stay on top of these complexities and remain profitable in today’s rapidly changing landscape.
Cannabis Accountant FAQ
How much do cannabis accountants make?
According to GlassDoor, the highest-paid cannabis accountant earns $86,493 annually. On the other hand, the lowest-paid cannabis accountant in the United States is earning $36,731 annually. But the earnings range from region to region and the services these accountants provide.
Do dispensaries pay federal taxes?
If you operate a dispensary, you’ll need to include your business’s income on your personal tax return. But, keep in mind, due to the federal government’s classification for cannabis (Schedule 1 controlled substance), Section 280E of the tax code applies. This goes for operations working in states that have already legalized cannabis recreationally, too.
Closing on What Do Accountants Do to Know About Accounting in the Cannabis Industry
As you can see, working with a cannabis company is unlike working with any other type of business. It requires an intimate knowledge of the unique challenges that cannabis companies face, including but not limited to industry trends, state laws, and federal policy changes.
But it also involves working with those operating in this space. This is how a CPA gains the most insight into the industry.
Looking for an accountant to handle your cannabusiness’s financials? Look no further!
Contact us now to speak with one of our professionals about how we can scale your operation with the right insight.