The thriving cannabis industry in the US, which has gone from strength to strength even amid the COVID-19 pandemic, means marijuana businesses big and small face an increasing need for accountants.
Its classification as a controlled substance makes it challenging for banks and other financial service providers to offer their services to state-legal cannabis business owners since it could open them up to federal reprisals.
This means many marijuana businesses operate on a cash-only basis, and this is unlikely to change unless marijuana is federally decriminalized or the Secure and Fair Enforcement (SAFE) Banking Act is enacted into law.
With more states legalizing cannabis in 2020 than ever before, and more surely poised to follow with multiple marijuana legalization ballot measures in the works for 2022, the need for accountants in the cannabis industry is set to grow.
Starting a company is difficult under any circumstance, but doing so as a marijuana business owner is extra complicated since the industry is so new and still operates in murky, semi-legal territory.
Without the reliable support of banks, many cannabis owners are vulnerable and accountants could help them navigate the complexities of state and federal tax laws, as well as the best way to handle thousands or perhaps even millions of dollars in cash in a legal way.
These challenges for marijuana business owners are also opportunities for accountants to become specialists in the cannabis space.
And like with any other business, the benefits of having a committed person in your team responsible for financial management, reporting, and bookkeeping means, as a business owner, you have more time to grow your enterprise.
So, while the need for more accountants in the marijuana industry is clear, it’s not altogether obvious how to encourage more accountants and cannabis business owners to seek each other out.
Here’s four suggestions to get the ball rolling:
1. Specialized education and training
A few universities provide marijuana-related degrees but they are still few and far between. Those that exist are typically four-year degree programs, which isn’t viable for many practicing accountants.
There’s a need for shorter degree or certificate programs, and more that specifically focus on accounting in the cannabis industry.
2. Software tailored to marijuana businesses
Marijuana accountants use the same accounting software as for other businesses, but cannabis finances differ considerably from those in other industries.
Adapting existing accounting software to better meet the specific peculiarities of marijuana businesses would be a benefit to all involved.
3. Normalize the cannabis industry
This is a little harder to action, but there’s little doubt that cannabis businesses have less accounting talent at their disposal than other businesses due to the lingering stigma associated with marijuana.
This likely puts off many accountants from working with cannabis businesses. Countering this image will lead to a bigger and more talented pool of accountants who, in turn, will help professionalize the marijuana industry further.
4. Push for federal reform
Ending the federal prohibition of marijuana would remove various financial obstacles that currently prevents cannabis businesses from competing on an even playing-field with businesses in other sectors.
Federal marijuana legalization would make the job of an accountant so much easier because the rules and regulations would align with those followed by pretty much every other business.