Do you know much it costs your cannabis business to grow a pound of weed?
You might have a good idea, or maybe no idea at all. What we find with a majority of clients is that even if they have a good estimate of grow schedules and calendars, very little if anything is documented. IRS regulations surrounding the industry only allow for cannabis businesses to legal deduct their cost of goods sold. This requires that both generally accepted accounting principles are being followed and that proper cost accounting is being documented in detail. Without a flower calendar and a clearly documented grow schedule as the basis for calculating inventory costs it’s almost a guarantee you’re losing tax deductions.
Beyond just cost accounting for the IRS our proprietary work papers, including a client flower calendar, can assist business owners if having quicker access to more accurate management information. Information that allows you to make timely decisions and changes in your business to maximize profits and minimize tax exposure.
Not every accountant in the industry understands grow cycles enough to assist with this process. Be sure when interviewing a professional ask them specifically how they plan to assist you in documenting your cost accounting procedures and how they plan to provide you 24/7 access to your client documents should you need them for immediate management decisions.
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