Hi Kareen,
I love hosting this - it is actually quite fun.
Yes i use IRC 263A to allocate costs but there are other ways to allocate costs too.
Actually I have only had 2 clients ever come under audit and both were thrown out when we supplied the documentation to back up our position. Neither of those were in the cannabis industry - I have always found that the more documentation you have to back something up the better off you are
Good Morning Farmer_Dan,
Yes packing is a part of Cost of Goods sold - so is designing the logo for that packaging - just make sure you have the art work and documentation of what it was used for - so if you use the same logo on your business cards then you have to document that it was originally intended for the packaging.
By the way the business cards would not be cost of goods even if you attach them to the product temporarily for transport.
as far ad the tracking tag - I don’t know - each state has a different requirement for when those tags transfer.
Cyndi
Hi HendrxGenetics
I have never used SAP because the implementation is usually to expensive for a small business and the cost does not qualify for 280E -
That said I do use dash-boarding software with most of my small businesses to help them with exactly the same thing - I normally use either Spotlight Reporting or Fathom Reporting depending on what kind of non-financial tracking they are looking for.
Cyndi Finkenbinder, CPA
970-344-7298
@AlphaOmegaAccounting do you go to any cannabis trade shows to acquire new customers? If you do, what is your favorite show?
One of the reasons you might be having a problem is because you really need accountants to push any point of sale software you want to offer. To do that it has to integrate with their software - in my case Xero and with any software required by the state. It also helps to have a partner program for accountants.
Banks are still really hard - I use Plooto for credit card processing for my business and several of my clients.
Even with banking in place this is still very cash intensive and always will be.
I am looking at crypto currency for several of my clients right now - as soon as I’m comfortable with how it will work I will be doing a webinar on it.
I don’t normally go to trade shows because they are normally at the same time as accounting conferences I need to attend for CPE but I am going to Sensi in Denver this week.
I also attend quite a few meetup groups that are centered around cannabis businesses.
Well it looks like all the questions are done - If i missed your question please let me know and I’ll answer it. If you have questions in the future just ask here or you can go to my website www.alphaomega-acct.biz, click on schedule and see when we might talk.
Thanks for such great questions.
Cyndi Finkenbinder, CPA
www.alphaomega-acct.biz
970-344-7298
Yes, your AMA is highly informational! I am happy you are having fun!!
OK, that’s great to here because that means that you are not making your clients overpay on their taxes.
Wow, OK. Yes, the more documentation the better! Sounds like you have excellent defense tactics. That definitely falls under the CYOA (cover your own a**) rules and in this case you are good at covering your clients as well. I like it!
Very happy to have you as one of our valued members @AlphaOmegaAccounting !!
~Kareenabis~
Hi @AlphaOmegaAccounting saw that you have over 2 decades of experience, that’s super impressive! How long have you been working with clients in the cannabis industry?
Yes, I’ve been in business 20 years and have clients in 28 states.
I have been working in the cannabis industry for 5 years now.
Cyndi
Hi @AlphaOmegaAccounting,
Thanks for taking questions this has been very informative. I have 2 questions:
I was curious if any new issues with the tax code have begun to develop with Cannabis Cultivators in Canada since legalization?
As legalization is growing state by state in the U.S. will the issues of 280E become greater or worse until Federal legalization?
Thanks once again!
Can I put in a shameless plug for my book “IRS 280E and Its Application to The Cannabis Industry”?
If you visit my linked in page, I have a lot of articles on taming 280E.
Robert Carp
HI Brendan,
I don’t do much in Canada and their tax code is very different than ours.
Until federal moves cannabis to either a schedule 2 drug or completely legalizes it we will have 280E issues. The IRS really likes 280E because they are winning under audit mostly due to lack of documentation so they are going to continue 280E audits for as long as possible.
Cyndi
I don’t mind that - I have a book coming out soon too.
Cyndi
I should clarify, the software is a cloud-based ERP and CRM, not POS. More for tracking product from seed to sale while staying in compliance with regulations. He is really interested in the regulations of cannabis so that he can tailor the software for the industry. If you’re interested in more details, call our Partner Mike Souza @ 619-550-2481. Thanks again for hosting a very informative AMA @AlphaOmegaAccounting !!
Nice! Can you tell us more about your book?
What recommendations might you offer to someone who is just getting into the cannabis business or just recently acquired licenses to operate cultivation facilities?
My book is going to be a walk through of running a cannabis business. I’m hoping to have it to the editor next week and available by the end of the month.
The first recommendation is documentation - get a notebook and make sure all your procedures and processes are written down. Include in that the documentation for when you will classify something as 280E compliant.
If you don’t have a good adviser already I would be happy to talk with you - if you do make sure all your partners (including spouses) and advisers are on the same page - meet with everyone together that would include your accountant, lawyer (although they are hard to get on these calls without paying them for it) - business coach - if you have a consultant make sure they are on the call to. I often facilitate these calls over zoom even for those who are not clients. I also advise other CPA’s on how to document the 280E issues to make sure everything is covered in your notebook.
Cyndi
