Illinois Cannabis Industry: What Accountants Need to Know

By taking the position, you’ll build experience, cultivate your skills, and even learn more complex accounting and bookkeeping tasks that general accountants may not know how to perform. The main difference between the two industries is that medical marijuana is only legal for medical purposes, such as to ease the pain of cancer patients, and must be approved medical marijuana accounting by the state and the patient’s doctor. Excel is a spreadsheet program designed to keep business-related information organized. It can be used for data entry, accounting, financial analysis, and more. These components include providing organized books and accurate financial reports that show effective internal controls and accounting policies.

Where can I find more information on cannabis bookkeeping courses?

Operating in this space requires an understanding that local and federal law will impact your activities. Even though a generalized CPA firm might be willing to take you on as a client, this highly specialized field demands experts that specialize in it. At Northstar, our accounting experts specializing in this industry will help you navigate this complex space with the right business processes in place. Hold onto your tax dollars and take charge of your finances with our assistance. Not to mention, you’ll have the data needed to make sound financial decisions for your marijuana business.

Performing cannabis tax laws

While you might be tempted to use a general tax professional, the legal implications of having tax liabilities that could lead to an audit simply aren’t worth the potential savings. To learn how our firm will handle your operation’s financial reporting and accounting needs, book your free consultation today. Even though federal legalization is still a long way off, maintaining accounting records remains critically important.

Cannabis Bookkeeping: Tips, Fundamentals & Best Practices

In the face of the Harborside case, political efforts look to tip the scales further toward the widely desired and more lenient 471(c) code. Leading this effort is the STATES Act, legislation pushed by Sen. Elizabeth Warren working in tandem with the SAFE Act to facilitate the full exercising of state law. With competitors breathing down their necks, people are hesitant to give away details on their plans. Those that have been in business before are more likely to understand why you need information to support them, but those that haven’t may need some understanding and hand-holding to help them understand why it matters. So many times, people create a business plan to achieve licensure but don’t know how to work the plan when it finally comes time to open their doors.

• And while there are 14 states that still ban cannabis use, we expect both unlicensed and licensed marijuana businesses to grow.
• I think there’s 38 states that have legalized medical access, but each of those have their own regulatory framework and they don’t allow interstate commerce.
• Sales tax applies to sales of cannabis, cannabis products, the cannabis excise tax, and sales of other merchandise such as pipes, rolling papers, and shirts.
• As of 2022, medical marijuana use is legal in 38 U.S. states, and 17 states plus the District of Columbia also allow recreational use for adults.
• An experienced cannabis business specialist can assist you with the application interaction, audit, and refine your marketable strategy.

Most of the recent problems have been related to the Max, however Boeing and Spirit AeroSystems have also struggled with manufacturing flaws on a larger plane, the 787 Dreamliner. Boeing has suffered setbacks on other programs including its Starliner space capsule, a military refueling tanker, and new Air Force One presidential jets. Now that the NPRM has been published, individuals and businesses may submit comments on the proposal until July 22nd.

• For example, financial institutions often must determine whether a potential customer is a cannabis-related business by determining “how close” they are to a federally illegal marijuana-related transaction in their daily operations.
• But in any event, the access to cannabis came up with ordering online and drive-through, curbside service, and everything, and that’s stuck around.
• Robust internal controls are of utmost importance in the cannabis industry to prevent fraud, mismanagement, and financial discrepancies.
• As I mentioned earlier, even if your business operates with cash, you are still responsible for filing and paying your taxes on time.
• Reported revenue for the fourth quarter of 2023 returns has been revised to $273.9 million.

Our results demonstrate that cannabis can induce acute psychotic symptoms in individuals using cannabis for recreational or medicinal purposes. Some individuals appear to be particularly sensitive to the adverse acute effects of cannabis, notably young individuals with pre-existing mental health problems and individuals exposed to high levels of THC. Future studies should therefore monitor more closely adverse cannabis-related outcomes in vulnerable individuals as these individuals may benefit most from harm-reduction efforts. Rescheduling would not be a panacea for the challenges faced by state legal marijuana businesses and would not necessarily make marijuana easier to research. David Goubert, chief executive of Ayr Wellness, which sells cannabis products in six states including Massachusetts, said his business contributes $50 million to taxes annually across the country.

• With our personalized approach, extensive industry knowledge, and commitment to excellence, we are here to ensure that your financial operations are in compliance, optimized for growth, and positioned for long-term success.
• A single mistake can result in large penalty fees, legal trouble, or even the shutdown of the business.
• For example, a marijuana dispensary may not deduct advertising or selling expenses, but it may reduce its gross receipts by its cost of goods sold.
• It was initially meant to prevent illegal drug traffickers from claiming business expenses on their federal tax returns.
• Most marijuana delivery companies barely break even, despite the state’s efforts to lower regulatory hurdles.

Working effectively with newly established cannabis operations sometimes requires knowing how to help them enhance business functions. To advise on the creation of pitch decks and financial models aiming to raise funds, you will want to first understand the components of success specific to the cannabis industry. As an accounting professional, cannabis clients are likely still new to you. They’re fresh on the scene — which means your services, adapted for the cannabis industry, are also still budding. As a cannabis accountant, I talk with many new cannabis business owners who have worked extremely hard to get their license but then need lots of help with the actual running of their business.

Schedule 3 drugs must be approved by the Food and Drug Administration (FDA,) prescribed by a doctor, and distributed by a pharmacy. Thus, none of the existing state-regulated marijuana dispensaries would be able to comply without extreme cost or further regulation or legislation. Another Attorney General’s memo is expected to clarify https://www.bookstime.com/articles/nonprofit-accounting-definition-and-explanation enforcement priorities against marijuana-related businesses that are legal in the state, but federally non-compliant. In August 2023,  HHS sent an official recommendation to the DEA that it categorize marijuana under the less restrictive Schedule 3 category. The recommendation became public in early 2024 as a result of a lawsuit.

Maximizing Deductions for Cannabis Business Owners