Cannabis Industry Accounting
Section 280E of the Internal Revenue Code states that businesses selling cannabis cannot deduct expenses incurred in the production, distribution, and sale of cannabis. These businesses can deduct the cost of what was purchased to resell, such as flower. However, expenses such as rent, utilities, insurance, payroll, legal fees, advertising, etc., cannot be deducted. Moreover, cannabis companies must pay taxes on Gross Profit, not Net Profit, which is a much more significant amount.
Expert Cannabis Accountants Are Crucial
Many cannabis companies are overpaying taxes and missing out on profit from having their accounting done wrong. While trying to beat section 280E may be difficult, it is not impossible. Accountants and CFO’s with specialized knowledge in the cannabis industry can legally reduce the tax burden for their cannabis industry clients. Having the right tools and a thorough understanding of the tax codes is imperative to this process.
Schleidt Works Can Help
Are you a dispensary, grow facility, manufacturer, producer, or transporter in the cannabis industry? Schleidt Works specializes in the ins and outs of cannabis industry accounting and tax law and is here to help your business grow! We can provide Virtual CFO Services or help train your current team on the intricacies of cannabis accounting. Furthermore, we have the tools, systems, and expertise needed to service Cannabis and CBD/hemp industry clients efficiently. Our tailored services always maximize your profitability.