News & Insights
Why Should a Cannabis Company Hire a CPA?
May 17th, 2021
Teaming up with the right partner can be the difference maker in successfully pioneering the cannabis frontier.
Many entrepreneurs, small-business owners and investors are deciding to venture into the young cannabis frontier. Just like the wild west, they set out with high hopes and plan to seek their fortune leaning on their wits and previous life (and business) experiences. But unlike the wild west, they don’t need to go at it alone. There are folks with the ability to assist cannabis pioneers explore, find their fortune and avoid costly mistakes along the way. Enter, the trusted business advisor – otherwise known as your friendly certified public accountant (CPA).
A Partner for the Journey
As a small business owner, you are immediately thrust into the role of:
- “expert” in the operations of your business,
- “visionary” with regards to developing a business strategy, and
- “accountable” for the results achieved.
It can be a lot to take on all at once, especially in an industry plagued by evolving regulations and a lot of competition, like cannabis.
Blazing the cannabis frontier can be a whole lot smoother with the help of a partner, like a CPA with expertise in the cannabis space. Having an expert to help guide you through the various operational and financial choices looming in the wilderness is critical to building a compliant and successful business and avoiding a whole lot of costly monetary and reputational mistakes along the way.
Why would it be valuable to consult with a CPA before finalizing your entity structure or selling your business? The reasons are endless.
A CPA can bring their expertise to the financial side of the business (an immediate – and obvious – benefit), but that’s not the only thing they can help bolster. A CPA working within a broader business advisory firm brings the strength of multiple advisory resources to the table, which can help support multiple aspects of your business outside of the debits and credits.
Below is a sampling of what an advisory firm, like the team at Maner Costerisan, can offer.
- Development of the business model
- Entity structure for tax and liability purposes
- Internal controls for asset safeguarding
- Structure of the accounting system (chart of accounts)
- Financial reporting for investors, creditors, and banks
- Software implementation
- Inventory management
- Federal, state, and local yearly tax reporting
- Tax audits (YES, you will be audited)
- State annual reporting needs
- Consulting on future endeavors
- Exit plan (acquire, merge, sell or close)
Could you benefit from any of the services above? If so, teaming up with a business advisory firm may be worth pursuing.
The team at 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 that supports 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.