Chief Financial Officer- A need and a challenge for Marijuana Industry

Chief Financial Officer

A need for Marijuana Industry

Cannabis Industry consists of businesses associated with cultivating of Marijuana, retailing in the sale of marijuana-related products, cannabis oil or edibles manufacturing and other ancillary services. Cannabis industry operates under the surveillance of various regulatory agencies. As cannabis or Marijuana is known as more harmful than a useful product from a legal and social perspective, the tax laws or financial system in the USA do not support any relaxation in taxes under IRC 280E or other laws for businesses related to the controlled substance of Marijuana. They need to manage finances carefully, comply with the regulations and consistently maintain cost accounting records to claim deductions reduce cost and increase profits.

CFO- A need A Chief Financial Officer is the necessity for marijuana industry enterprise. He is a business professional knowing finance and industry best practices. He turns data into information and makes meaningful decisions based on it.

A marijuana CFO performs the following functions     

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Business and Investment planning Projects financial figures under different conditions Prepares Operating budget and Cash budget Manages finances Identifies the lead indicators to check progress and managing dashboard Develops a pricing model Strategically plans for material and investors

Hiring CFO- A challenge in the Cannabis Industry Some companies in other industries appoint a full-time CFO when they cross a particular milestone. But by its very nature, Marijuana-related business needs CFO from the beginning of the business.

The marijuana industry is characterized by many legal impediments, limited access to financial services, complicated accounting and regulatory requirements.

However, it is not possible to hire a CFO and afford their cost for every enterprise.

A large scale organization can afford to appoint a fulltime CFO; in other cases, your business acumen or parttime consultant can do a good job.

Why CFO? A Marijuana CFO is responsible for the present and future financial condition of the organization while complying with requirements of laws and regulations. He is also responsible for presenting and reporting accurate and timely historical financial information of the company. All stakeholders rely on this information. The person well versed with this industry, its financing needs, the associated risks, cash flows patterns and costing aspects can ensure right business planning with correct financial estimates and budgeting, and compliances, analysis and decisions in an essential manner within due time.

A CFO needs to perform his duties throughout the year to ensure data-driven right decisions for raising capital, present financial governance and future planning