FAQ

Can you give me a list of deductible expenses my cannabis company can claim?

This is by far the most common question we receive during consultations. The answer is unfortunately, no. Cannabis companies claim deductions via Cost Of Goods Sold (COGS). An expenditure may be an expense for one business (such as a vehicle only used to deliver cannabis), but COGS for another business (same car, but this business uses it only to pick up supplies/inventory). As you can see, maximizing COGS can be quite granular and time intensive.

How do I open a cannabis bank account?

Ah yes, one of the most painful issues faced by the cannabis industry, the lack of banking. 


The short answer to your question is that there is no single nationwide bank which is doing business with cannabis. Business will most likely be done with a State chartered credit union or a sympathetic bank branch. There is optimism that banking for cannabis will be the first movement toward legalization that happens soon. But that doesn't help you do business right now does it? So can you get accounts still? Sure! 


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Do I need to file a tax return for my C-Corp or S-Corp even if it was basically inactive?

Yes. Unfortunately, a lot of people get really impatient and start creating companies at the very end of the year. Avoid this pitfall and only create entities, especially corporations, when the entity is actually needed. If you do create those entities before year-end , just know that you are going to be paying some (albeit minimal) fees for tax services


Can you help my business even if I am in a different state?

Absolutely. CPA's are not limited to performing services for businesses in a specific state. We are very well versed in most state tax jurisdictions and ready to help you regardless of location. 

How should I setup my cannabis company? What kind of entity should it be?

This is the mother of loaded questions. Some cannabis companies will benefit from being a Single Member LLC, others as a partnership, S-Corp, or C-Corp. The answer here is quite situational based on your specific business, needs, goals, etc. 


The recent tax law changes in 2018 certainly leveled the playing field between S-Corp vs. C-Corp dilemma, but it does still require some consultation. In most cases, we can sort out your entity structuring needs within an hour or so.

How do I pick a cannabis CPA?

The million dollar question. Now we obviously have our own opinions about what makes a good CPA, and lucky for you we wrote it down on our blog. Your tastes in personalities will vary, but our list of "10 questions to ask before hiring a cannabis CPA" should give you a nice platform from which to take your leap of faith! At the end of the day you should be hiring CPA's with high levels of integrity, experience (industry specific and otherwise), carries a strong tax technical background, and is responsive. 

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