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2. Cannabis CEOs have complex pain points including a lack of banking, high cash transactions, difficult merchant services, difficultly complying with state, federal, FDA and OSHA laws and cobbling together software (QB, excel, cannabis POS systems and state seed-to-sale required software) with difficult monthly reconciliations. Tese are all areas where your financial skills and accounting knowledge will prove vital and make you indispensable to your new clients.


3. Cannabis companies (even small farms and single dispensaries) also generate multimillion-dollar revenues in short periods of time. Tey grow and expand quickly and have a sizable payroll. Tey have the ability to pay sizable accounting fees, they understand the


need for qualified CPAs on their team and they get that compliance can be a key to staying in business. In short, they are often the perfect clients to serve.


4. Tese companies also have complex tax needs (280e and section 471 are the relevant tax provisions to review) and are highly audit prone—giving CPAs yet another business opportunity to ensure cannabis clients are always at the ready for audits. For an example of what can happen when a cannabis business get things wrong, research the Altermeds Dispensary case. (A quick summary: Te company had poor accounting records in Colorado in 2010-2011 and filed an aggressive, poorly supported tax return. It was audited in 2014 and eight years later was ordered to pay $400,000 in back


taxes/interest and a $78,000 accuracy penalty. Te owners claimed to be buying some of their weed at Home Depot and Lowes, so you can see how they viewed accounting.)


Where do I go to learn more? Te AICPA website is a good place to


start, as well as cannabis industry news sites, such as MJ Biz Daily, to keep up- to-date on current affairs and the state of the marijuana industry. Tere are also a number of third-party groups and services that provide training and resources to CPAs in the cannabis industry and can prove essential for networking and support. My company has a free Facebook group called DOPE CFO where you can join with other accountants around the nation interested in serving this niche.


Call


TIMING MATTERS! Call or visit www.APS.net for a free and confidential valuation of your practice.


Today... Sell By Year End!


Wade Holmes


888-847-1040 x2 Wade@APS.net www.APS.net


Delivering Results - One Practice At a time


September/October 2018


CPAFOCUS


19


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