Finding the right CPA is about knowing what to look for. There are dozens around Maryland, and it can be challenging to choose the best one.
A CPA helps with finances and specializes in the cannabis industry to ensure that you optimize your business operations.
We are going to explore what to look for and why you might need a cannabis CPA near me.
Why Work With A CPA Specialized For Cannabis?
Working with a CPA specialized in cannabis helps businesses in the industry navigate the complexities of consistently changing regulations.
Here are other reasons to work with a cannabis CPA:
Navigating The Complex Tax Landscape
- IRS Code 280E: Cannabis businesses cannot deduct normal operating expenses on their federal taxes because cannabis remains federally illegal. A specialized CPA knows how to maximize allowable deductions (e.g., Cost of Goods Sold, or COGS) to minimize your tax burden legally.
- State and Local Taxation: Cannabis taxation varies dramatically between states and even municipalities. A specialized CPA ensures compliance across all jurisdictions, preventing costly penalties.
Compliance With Industry Regulations
- Cannabis businesses are subject to stringent audits and must maintain meticulous financial records. A CPA with industry expertise ensures:
- Proper documentation of cash transactions.
- Accurate financial reporting.
- Adherence to local cannabis compliance requirements, such as tracking sales through seed-to-sale systems.
- Licensing and Reporting: They help you meet all financial requirements to maintain your license.
Cash Flow Management in a Cash-Heavy Industry
- Because federal restrictions limit access to traditional banking services, many cannabis businesses operate predominantly in cash. This poses risks for theft, mismanagement, and IRS scrutiny.
- A cannabis CPA can:
- Implement effective cash management systems.
- Guide you toward compliant banking or alternative solutions, such as cannabis-friendly credit unions.
- Audit your finances and start managing cash flow for cannabis businesses.
These are some of the reasons a CPA can help your business succeed in the cannabis industry.
Services Provided by a Cannabis CPA
There are many services provided by a CPA specialized to help businesses in the cannabis industry. If you’re looking for a cannabis CPA near me, then review the services to get an understanding of their services.
Tax Compliance and Preparation
Cannabis is subject to tax compliance regulations you need to prepare for throughout the year. One of them is navigating section 280e of the Internal Revenue Code. A certified public accountant (CPA) helps you conduct the proper compliance protocols and ensures your business is set up for success. They help you file taxes yearly for state and federal, so you can avoid penalties.
Audit Support and Risk Mitigation
Cannabis CPAs help you with audit support and mitigate any risks with compliance regulations. The proper documentation is required to adhere to all regulatory standards. This allows your business to operate smoothly without you worrying about any compliance fees.
Cash Flow and Financial Management
Cash flow and financial management are crucial to keep updated. Without having a transparent recording of cash flow, your business can be met with unwanted fines. CPAs have clear strategies for handling cash since all cannabis companies have to handle cash-only transactions. They also support proper budgeting and forecasting to ensure business growth.
Inventory Management
A cannabis CPA assists with tracking inventory for compliance and can do so with a proper seed to sale system in place. When proper tracking is taken place, your business can succeed and track all the necessary cannabis financing inventory costs in time for tax season.
Payroll Services
Managing payroll in the cannabis industry requires compliance with federal, state, and local regulations, often complicated by unique employment and cash-handling dynamics. A cannabis CPA offers:
Payroll Setup and Management
- Cannabis-Specific Compliance: Ensures payroll systems comply with state labor laws, cannabis licensing requirements, and federal guidelines.
- Employee Classification: Accurately categorizes employees vs. contractors to avoid IRS penalties.
- Payroll Tax Filing: Handles withholding, filing, and payment of federal, state, and local payroll taxes to prevent errors or missed deadlines.
Business Strategy and Advisory
Cannabis businesses operate in a rapidly evolving industry, and strategic financial planning is essential for success. Cannabis CPAs provide advisory services to help you achieve your business goals while staying compliant.
Business Structuring
- CPAs help choose the optimal business structure (e.g., LLC, S-Corp, C-Corp) to minimize tax liability and comply with IRS Code 280E.
- CPAs advise on multi-entity structures to legally allocate costs and maximize deductions.
Tax Strategy and Planning
- CPAs design tax strategies specific to cannabis businesses to optimize costs while adhering to 280E.
- They also advise on tax implications for expansion, mergers, or acquisitions.
Growth Planning
- They develop financial models and forecasts to guide scaling operations, such as expanding cultivation, opening new dispensaries, or increasing product lines.
- CPAs assist in securing cannabis business loans or investments by preparing detailed financial projections.
Working with a cannabis CPA near me in Maryland can provide the best possible solution for growing your business.
How to Find the Right Cannabis CPA Near You
When finding the right cannabis CPA near you, it’s necessary to begin with the following:
- Start Your Search
- Look for online directories and cannabis industry networks.
- Search online and start speaking with CPAs who can help your business.
- Get recommendations from other local cannabis businesses to see if a CPA may be a match for you.
- Key Qualities To Look For
- Deep knowledge of local and federal cannabis laws.
- Proven experience with cannabis-related clients.
- Transparent pricing and communication.
- Questions To Ask Potential CPAs
- Do you specialize in cannabis accounting?
- How familiar are you with Section 280E and state-specific regulations?
- How long have you been doing CPA work?
These can help you find the right fit for your cannabis business so you can have massive growth.
Work With A CPA Today
If you’re not sure where to look for a cannabis CPA, then consult with Green Space Accounting. Our team of experts knows the ins and outs of the industry to help guide your finances into success. We have extensive experience working with businesses in Maryland and can give your company the leg up it needs. We ensure your business navigates the Maryland cannabis compliance sector so you won’t need to worry about penalties.
Contact us today!
