4 Pain Points to be Aware of When Starting Cannabis Business

4 Pain Points to be Aware of When Starting Cannabis Business

Cannabis business, despite being beneficial for society, has not got a good reputation in many parts of the world. If you have decided to help the patients in need with your cannabis business, be ready to ride the road that’s full of obstacles. There are legalities involved in cannabis business that could eventually lead to a lot of accounting problems.

Turning to trustworthy Marijuana accountant can be the only way to ensure that you don’t get into legal troubles.

Having said that, let’s look at some of the common problems that businesses face in the cannabis industry.

1. Lack of Knowledge of the State Laws and Tax Law Your lawyer and CPA needs to be aware of the cannabis industry so that they can help the business run smoothly.

As cannabis is a new industry, make sure that you have an idea of the Internal Revenue Code Section 280E that covers taxation of illegal income. Know the deductions that are permitted.

2. Problem in Opening Bank Account Irrespective of the federal government giving a nod to banks to work with cannabis businesses, many organizations are still reluctant to the idea of letting cannabis businesses use their service. Look out for ways to get a bank account. Take help of CPA in running the business only with cash and keeping accurate records of all the transactions.

3. Fear of Income Audits Cannabis businesses are prone to income tax audits.

Instead of getting scared, it makes sense to turn to a CPA. If your accountant is experienced, they can advise about the audits conducted by different taxing authorities. They will help in defending your business at the time of audit.

4. Unfamiliarity with Cannabis-friendly Merchants Due to its bad reputation, not every merchant will be comfortable in dealing with a cannabis business.

Therefore, finding a cannabis-friendly merchant could be a big feat for your company. Your CPA will be helpful in this area as well. They can introduce you to cannabis-friendly merchants so that the business can run smoothly and without legal hassles.

Final Words The road to success in the cannabis business is full of rocky patches. If you find a good CPA, half your worries will be over. An experienced CPA will advise about best internal control practices to scale your business. In addition to relying on CPA, you should also update yourself about the laws and taxation practices with regard to running a cannabis business.