It wasn’t too long ago that cannabis in any form was illegal to produce, sell, possess, or use. Once certain regulations were enacted to allow for medicinal use of cannabis, a new market emerged that cannabis accountants and business owners have struggled to understand. While there is no debate over the demand for cannabis products like CBD oil, the legality of the production and distribution of these products is debatable. The best ally a CBD producer can have is a professional CPA that understands the law, can interpret complex and sometimes contradictory tax codes, and has the ability to clearly communicate all of this to their clients. GJR Consulting was built to be this firm.
We have been working with cannabis-related businesses since day one. We have seen the market expand from small, medically-aligned producers, to large productions that are preparing marijuana for the mass market. The accounting and legal implications of simply operating in this market are so nuanced that GJR, a CPA firm dedicated to serving the cannabis industry, is the best asset your business can have. What are some other reasons?
- Marijuana production laws are always changing. Not only in jurisdiction, but in reach. Some states even define “producer” differently.
- Cannabis companies experience regular audits. Your company needs a cannabis accountant that can keep sound books and records as businesses in this industry face more audits than most. Organized books reduce risk and reduce the duration of an audit which makes your CPA a valuable asset from day one.
- Banking is a challenge for cannabis-related companies. Banks are wary of cannabis companies because marijuana is still a Schedule 1 illegal substance according to Federal laws. Some cannabis companies have turned to a cash only business but there are some banks that will work with marijuana businesses. They require lengthy application processes and they demand quarterly reviews of financial records which need to be prepared and validated by your CPA.
- Section 280E is difficult for cannabis businesses to overcome. The Federal government doesn’t allow deductions or tax credits for expenditures connected to the sale of illegal drugs. What would be seen as ordinary business expenses in any other business is not allowed for cannabis-related businesses.
GJR Consulting is here to help you make sense of all of this. Your business operates in a new and exciting industry and as more states legalize the use of medicinal or recreational marijuana and CBD oils; new markets are opening up almost yearly. The key to making all of this profitable is to make sure you have sound legal and accounting advice from day one. This is not just to be there when something unexpected happens, but as a guide. A cannabis CPA like GJR Consulting should be a part of your business plan.
Are you ready to get your CBD Oil business off the ground? Reach out to GJR Consulting today and we will get your business started properly, legally, and profitably.