CPA Trendlines featured Advisory Partner Gary Rosen in an article about the "green rush" to cannabis and how accounting professionals are advising cannabis clients.
By Liz Gold
[Rosen:] It is critical to develop internal controls. The cannabis industry typically transacts most its sales in cash since many credit card companies and financial institutions are not servicing the industry. Therefore, it is imperative that an entity is able to account for all transactions from both the sales and the purchasing cycles. The second best practice is to maintain proper records for all aspects of the business. Currently cannabis is considered a Schedule I substance under the federal guidelines; as such cannabis companies are required to follow Section 280E of the Internal Revenue Code when reporting their revenues and expenses on their tax returns.