Financial Compliance Inspections
If you can’t measure it, how can you manage it?
Today we have a guest column from Karla Sasser, CPA, CITP, CIA, CGMA. Karla supports multiple cannabis operations and is licensed in California and Florida. Karla was recently nominated for Best Accountant/CPA by the California Cannabis Awards. Please see the CCA links below to VOTE for Karla. Here is Karla’s guest column:
Improved Controls on Inventory Leads to Fewer Violations
Inventory is the single most challenging asset of any business, especially for the cannabis industry. Business owners and their accountants struggle with issues like identifying acquisition costs, proper valuation, costing methods and identifying and valuing waste and obsolesces, just to name a few. It is no surprise that when Adherence Compliance releases its top 5 regulatory infractions, inventory is always the top infraction for dispensaries, stores, cultivators, manufacturers and distributors.
Proper inventory controls for the legal cannabis industry is especially important because of 280E and the various state and local regulatory requirements. The best way to tackle a seemingly insurmountable problem is by getting back to the basics. By implementing a high-quality, cost effective system of internal controls over inventory, you will be creating a solid foundation for managing and properly reporting your cannabis inventory.
To begin, make sure your cannabis business has a comprehensive set of inventory standard operating procedures that includes separation of duties and dual control; purchasing and receiving; identifying, segregating and documenting waste; taking complete inventory counts and cycle counts; and documentation requirements for making entries to the accounting and the state mandated seed to sale systems. Most importantly, make sure your staff has access, training and comprehension related to your SOP’s.
Make sure you and your staff understand the impacts of inventory terminology such as free on board (FOB) Shipping Point and FOB Destination, one is a selling expense, one is a cost of goods sold expense. Understanding nuances such as these can save thousands in refiling and penalties.
If you are using technology to manage your inventory, purchase training and support and to ensure you keep the system up-to-date with the latest software and security patches from the vendor. Automated financial compliance software, i.e. SCORE App, will assist the process.
Adherence & Karla Sasser offer in-depth Financial Compliance Inspections, which include systems, inventory, waste and reconciliation reviews with suggested control updates and remediation activities for licensed marijuana operators. For more information on Financial Compliance Inspections, Inventory Reconciliation & Standard Operating Procedures (SOPs) and Training Services, please contact Adherence.
Updated - Adherence SCORE App v4.3!
Smart Compliance. If you’ve used another compliance software provider, Adherence will give you one-month free to switch to the SCORE App in April! Avoid expensive retainers from law firms and take control of compliance now. The updated SCORE App v4.3 is now available on the Apple App Store! The SCORE App has been proven by our long-standing clients such as banks, marijuana license owners, regulators and attorneys. Contact Adherence to set up a User Account today. Updates to version 4.3 include:
- TouchID Sign-In for iPad Pro models
- *New: Daily Compliance Checklists - Opening & Closing by License Type
- Expand & Collapse on all 15 Compliance Categories
- Updated Compliance Report Card!
Simple. Fast. Mobile. It’s the leading cannabis compliance app on the Apple App Store! Trust the proven experts with regulatory and financial expertise. The Adherence SCORE App has been purpose-built for the needs of the cannabis industry since 2014. Start today.
Compliance Inspections with Report Cards
Click HERE to Download/View a Sample Report Card
What’s Inspected -> Current Federal, State and Local Regulations
- 15 Compliance Categories Reviewed: Inventory, Security, Safety, Business Records/SOPs, Testing, Physical Premise/Building, Licensing, Permits, Wast and more
- Dispensaries & Retail Stores
- Cultivation Centers: all sizes / types, indoor / outdoor
- Manufacturers: all types Volatile and Non-Volatile
What’s Received -> Review of Overall Compliance & Report Card
- 2-3-Hour Regulatory Compliance Inspection for all available State, County and City requirements on-site. Travel is included.
- Report Card with score, list of infractions, observations, notes and photos
Comparative analysis on how your license stacks up to others
What’s Your SCORE?
California: Online Only $1250 per License
Special for California Grower’s Association Members!
Nevada: Online Only $900 per License
Colorado: Online Only $650 per License*
Other States: Please call 720-616-3900
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