The cannabis industry needs CPAs. Why? It’s a rapidly growing industry, with an economic impact that’s projected to react $70 billion by 2021. However, it’s also one of the most tightly regulated industries in the country, since cannabis is a Schedule I controlled substance, making it illegal under federal law, even though it has various levels of legality in over 30 states.
Cannabis companies need qualified, experienced CPAs to manage their taxes and accounting, as well as their business structuring and inventory management, in the face of strict federal and state regulations. Without professional accounting services, cannabis businesses have trouble staying afloat, since the IRS often targets their finances and bookkeeping to find ways to fine or penalize them, or even shut them down.
If using your accounting skills in the cannabis industry sounds like an exciting challenge to you, here’s what you should do to become a California cannabis CPA:
To work with cannabis clients, you need to teach yourself about the cannabis industry. Learn about Section 280E of the Internal Revenue Code, and how the IRS has been enforcing it recently. Make sure you understand Cost of Goods Sold (COGS), which can be used to help cannabis companies claim tax breaks. Find out about political and tax issues surrounding cannabis, including recent court cases. Learning as much as you can about the cannabis industry and effective accounting methods for it is the best way to make yourself a solid resource for any cannabis CEO.
Connect With Other CPAs
As a CPA, you know what your accounting strengths and weaknesses are. That’s why you should reach out to other CPAs as you work your way into cannabis accounting. Gathering partners and colleagues will help you offer well-rounded accounting services to cannabis companies. If tax planning and tax preparation are your strengths, you should partner with a CPA who has strong controller skills to balance things out. If you connect with enough of your fellow accountants, you can start your own cannabis accounting firm.
Reach Out to Cannabis CEOs
Whether you’re acting independently or as part of a cannabis CPA firm, you should begin joining Facebook and LinkedIn groups for cannabis startups. Once you’re a member, begin reaching out to cannabis CEOs with targeted messages and emails. Make sure your messages address pain points that would be important to a cannabis CEO, like tax planning, cash flow management, and compliance measures. State your qualifications and explain how your proposed solutions can help them navigate the complex space of cannabis accounting.
Find an Industry Niche
Carve out your own cannabis space with your accounting and industry knowledge. You could focus on accounting for medical dispensaries, or for retail storefronts, or you could focus on accounting for an entire supply chain. Whichever path you choose, stick to it and become as knowledgeable and experienced in that niche as you can. Finding a niche will allow you to develop expertise, which will help you serve your clients to the best of your ability.
California Cannabis CPAs You Can Count On
At GJR Consulting, we have placed ourselves on the cutting edge by offering cannabis accounting services. We push our work to a place where few accounting firms will go because we understand that cannabis is a legitimate industry, and the companies within it deserve access to top-quality accounting services. If you are interested in our cannabis accounting services, contact us today.