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Accountants in the Cannabis industry can shape and help grow a booming industry that is still in its infant shoes.
Accountants in the Cannabis Industry
In the last episode we discussed the Australian cannabis industry. In this episode Andrew Hunzicker of Dope CFO will discuss with you how we as accountants can assist this booming industry. Emerging or booming, depending on where you look.
Andrew is based in the US, so his discussion is US-focused but there is a lot to learn from this interview for us in Australia.
Here is what we learned but please listen in as Andrew explains all this much better than we ever could.
To listen while you drive, walk or work, just access the episode through a free podcast app on your mobile phone.
Accountants in the Cannabis Industry
There are five reasons why accountants with industry expertise are dearly needed in this industry. The industry is
1 – Tightly regulated;
2 – Vertically stacked;
3 – Expensive product;
4 – Fast growing
5 – Complex tax and accounting.
1 – Tightly Regulated Industry
In the entire 1st world you have tight rules around who can and can’t grow, manufacture and trade cannabis.
So you need a mindset who thrives on regulations and paperwork, but can also bring the necessary strategic thinking to the table.
2 – Vertically Stacked Industry
Most cannabis operations are vertically integrated. So one business grows, manufactures and runs retail. That is a lot of moving wheels to keep track off and account for.
3 – Expensive Product
The end product of cannabis is of high value. So you can’t just have a few grams going missing here and there. You need tight processes to account for every gram.
4 – Fast Growing Industry
Doubling turnover every year is the norm and many businesses grow even faster than that. Such exponential growth is difficult to keep up with. You establish a process pipeline and a few months later the pipe bursts since there are far too many transactions coming through.
5 – Complex Tax and Accounting
With highly regulated and fast growth come complex tax and accounting rules. The fiscus wants its share of the pie. In the US the calculation of Cost of Goods Sold is complex and complicated. In Australia it is the R & D tax offset and capital expenditure.
This is a rough overview of the first topic Andrew discusses in this episode. But there is much more he covers, including our very novice questions about the US cannabis industry.
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Disclaimer: Tax Talks does not provide financial or tax advice. All information on Tax Talks is of a general nature only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.
Last Updated on 12 September 2021
Tax Talks spoke to Andrew Hunzicker - CPA, Founder and Owner at DOPE CFO - for more details.
