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FOCUS 


Everything you wanted to know 


were afraid to ask 


Andrew Hunzicker, CPA, is the CEO of DOPE CFO, has broad experience  leadership and business counsel to companies across industries including retail, manufacturing, energy, medical/bio and tech. Andrew co- founded DOPE CFO and   bookkeeping program to  states unlock a new world of clients. Andrew was runner up for Portland Business Journal’s CFO of   to ever be nominated. He is an expert in cannabis startups, CFO services, turnaround and high- growth strategies, capital sourcing, mergers, exits 


O


klahomans voted to legalize medical marijuana by passing State Question 788 in June 2018. Tis decision makes


Oklahoma the 30th state in the U.S. to allow the use of cannabis for medicinal purposes. As the industry in this new market begins to attract ancillary industries seeking to unlock potential for new revenue, CPAs have the opportunity to fill a crucial knowledge gap and serve clients who often lack the niche training to financially succeed in the cannabis industry. Cannabis accounting is very complex.


It involves four verticals: farming, chemical manufacturing, food production and retail. Cost and absorption GAAP accounting are required, and, often times, you will have a client with operations in each vertical, bringing in consolidated and combined financials, intercompany transactions and transfer pricing. CPAs who step forward into this new and burgeoning market will find both opportunity and risk. Te U.S. cannabis industry is one of the most highly and uniquely regulated in the world, with laws only in the formative stage. As a born and raised Oklahoman and an active CPA in the Oregon legal cannabis market, I can promise that it will be an interesting road over the next several years as rules are written and likely re-written over and over again.


Can I serve a cannabis client as a CPA? Cannabis, although now legalized for medical


use in Oklahoma, is still a schedule 1 drug and is federally illegal. Nonetheless, it is an industry desperately in need of correct accounting and financial expertise. Te AICPA has a webpage devoted to serving cannabis accountants. Its primary guidance is to make sure you follow your state accountancy board guidelines. Te Oklahoma Accountancy


18 CPAFOCUS September/October 2018


Board (OAB) plans to discuss this regulation this fall, which will hopefully outline the protocols and implications for CPAs engaging with the cannabis industry. Once these regulations are finalized, Oklahoma CPAs will have a much clearer picture of exactly how to provide the best service to cannabis clients, while also protecting their own interests. David Greenwell, CPA, an OAB member, has


previously said that any regulations to be issued by the OAB will take into account other states’ guidelines, an understanding of Oklahoma’s recently released rules and the federal laws pertaining to cannabis. CPAs and members of the public are welcome to attend OAB meetings to provide input and hear discussions firsthand.


Why would I want to serve this niche? Tere are many reasons for a CPA to enter the cannabis industry. I started serving these clients back in 2015 and immediately benefited from focusing my practice on this niche, which is the fastest growing in the U.S. and will likely top $30 billion in revenue in the next 10 years. Here are the top four reasons you should consider serving in this new field:


1. While it’s the fastest growing niche in the U.S., it’s also the least served by the accounting industry. Tere is a stark lack of skills to meet the strict accounting requirements of the thousands of cannabis businesses being established in the U.S. Te Big Four and most regional and national firms have currently decided not to serve cannabis clients until full federal legalization. Tis means there are plenty of opportunities for CPAs and small businesses to attract clients and become experts in cannabis accounting.


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