News & Insights
March 9th, 2021
CFO Advisory Services
In 1971 Fiddler on the Roof burst onto the silver screen and into the hearts of film enthusiasts, academics and historians alike. To quickly jog your memory, the story centers around the main character, Tevye, a milkman in the village Anatevka. Tevye was raised in a culture steeped in deep tradition, therefore, Tevye raises his family in tradition. The community where he lives also operates according to tradition. To drive home the point (in case you missed it) the movie writers begin the musical movie with the prologue (and probably the most memorable) song entitled “Tradition.” If you’ve ever seen the film there’s no doubt you remember the burly, deep-voiced Topol belting it out at the top of his lungs, “TRADITION! TRADITION!”
In the world of cannabis, it’s safe to say there isn’t much that many would consider to be tradition. Conversely, cannabis is virtually the opposite of tradition. And, in an explosive growth industry like cannabis, it can be a big payoff for an entrepreneur to not follow tradition. Enter the outsourced CFO.
Outsourcing is certainly not a new concept. We’ve heard about it for years on the nightly news, in the tabloids and at seminars. The storyline is pretty much always the same though, “outsource such and such and profits will sky rocket!” While this can often be the case, an outsourced CFO can provide much more value. In fact, there are three main reasons a cannabis owner should seriously consider outsourcing the most strategic finance function of the cannabis organization.
- DIVERSIFIED EXPERIENCE. By tapping into the expertise of an outsourced CFO, a nontraditional industry like cannabis can quickly be built into a fully functioning and robust organization. Complex tax issues such as 280E and 471c plague the industry to this day. Cash handling and banking needs can be enormous headaches. Computer accounting systems are innumerable in choice. In an industry that is nontraditional, growing and searching for answers, the experienced outsourced CFO is critical to future financial success. Bringing best practices acquired from a swath of industries, a seasoned outsourced CFO will quickly allow for effective implementation. Drawing on years of experience and an army of financial, subject-matter experts employed at their respective accounting and technology firm, their breadth of knowledge is truly unparallel. No single individual could ever possess the capabilities of an outsourced CFO.
- ACCESS. Outsourced CFO’s have access to more than just accounting nerd know-how. A well-groomed outsourced CFO will bring critical connections to the new cannabis company. Helping clients connect in hard to access areas such as 401(k) implementation, wealth management, marketing, branding, banking, secured transport and real estate brokering should be part of the best outsourced CFO’s bag of tricks. Add previous cannabis experience to the CFO’s repertoire and the connections can quickly become vast and invaluable.
- COST CONTAINMENT. It goes without saying that outsourcing any function should come with cost savings. An outsourced CFO is certainly no exception. In the strictest sense, a cannabis company that outsources the CFO role only pays for the actual time the CFO provides services. Want a little help, pay a little. Want specific help, pay a specific price. The savings by not hiring a full-time CFO teamed with the vast amount of resources they can quickly access makes the decision one of tremendous ease. No funds are wasted on an expensive full-time CFO that isn’t busy all the time. No onboarding costs. Immediate start date with no month-long notice to the current employer. And best of all, when the services are no longer needed, no messy employee divorce. Just a thank you.
Outsourced CFO Services Peaked Your Interest?
If you think an outsourced CFO might be a worthwhile and critical tool in your nontraditional cannabis company’s financial success, it may be time to reach out to the professionals at Maner Costerisan.
Maner Costerisan is deeply invested in Michigan’s cannabis industry and we understand the complex challenges cannabis business owners face daily. We are committed to helping our clients stay compliant, while building a sound financial strategy to support their growth. We are proud members of the Michigan Cannabis Industry Association and supporters of the Marijuana Regulatory Association’s social equity program. We know cannabis and we can help.