Several tax codes apply to hemp cultivation that cannabis businesses don’t have to follow and vice versa. While marijuana businesses must follow internal revenue code 280E, hemp businesses operating under the United States Department of Agriculture approved regulations do not have to adhere to this strict set of regulations.
Hemp business owners must follow internal revenue code 263A and apply uniform capitalization rules to its inventory costing. And because hemp is not cannabis, it only needs to follow agricultural accounting methods and standards. However, hemp cultivation business owners must keep accurate records that confirm their products have less than 3% of THC, proving the business is conducting hemp production and not cannabis production.
GJR Consulting can walk you through the differences between hemp and marijuana accounting. Call us today, and we can get you started with the process.