Software issues are common in cannabis accounting. Sometimes, the errors are human, others are technology-related, but there’s always a solution or workaround. Even when everything seems like it’s falling apart, there’s usually a simple explanation. Keeping a cool head is essential as it will help you stay calm, identify the issue, and get back on track before anyone loses their mind.

If you’re still using Excel spreadsheets, we see you. Even if you’re using basic accounting software, you might miss out on some opportunities to cut your workload, automate processes, and generally make light of your financial life. 

Cannabis businesses in the US face an uphill battle with profitability, largely because of restrictive tax laws gripping the nascent industry. Until the FDA reschedules, cannabis companies will be under a microscope. Accurate record-keeping is essential, not just to maintain compliance but also to enable more accurate business planning and attract investors.

Business owners understand the need for meticulous financial management. Maintaining your books is an ongoing process that has many benefits. In addition to having a better grip on your cash flow, it simplifies compliance, audits, and tax filing.

But what does it mean to have “clean” books?

While cannabis companies may be restricted in many ways, leveraging certain assets can help to recover costs and potentially reduce tax liability.

A few of my clients have mentioned receiving emails about Employee Stock Ownership Plans (ESOPs) for cannabis companies, touting it as a strategy to pay no federal or state taxes. This statement is hugely misleading as you can’t avoid tax—it can only be deferred, meaning you’ll have to pay eventually.  That being said, ESOP is an excellent exit strategy… with a few caveats.