Holy moly, that’s a lot of cash!!!

There aren’t too many businesses out there (at least legal ones) that deal almost exclusively in cash. Even lottery tickets, once strictly cash, can now be purchased in some states with debit or credit cards. And yet we in the cannabis business are forced to work in cash only because federal laws prevent credit card companies from servicing cannabis clients, regardless of legality in the operating state. To add to the difficulty, especially in Oregon where recreational marijuana sales just became legal, most banks are refusing to accept canna customers because cannabis sales are still federally illegal, and/or because of the extensive regulatory compliance required of banks with large deposits of cash. Cash deposits add to the workload of banks in a number of ways, and while new customers are a priority for banks, canna customers may be perceived to be more trouble than they are worth. Because of these two components, many of you may find yourselves with large amounts of cash to store and manage. You may also be forced to operate using actual cash to pay your bills and staff. From a marijuana accountant’s perspective, paying bills and staff in cash is never recommended because it doesn’t provide the trail (support) of the transaction that writing a check does. But again, you are stuck and given that you are stuck I recommend you do the following: Do not store cash with inventory Provide two safes to store cash, one for daily operating (like the tills at your budtenders stations) and one for cash reserves that you will use to pay bills and payroll Always have two...

The Story of Your Cannabis Business

Your financial information tells the story of your cannabis business but unless that information is both timely and accurate, the story is fiction. Many of you are so occupied with the daily operations of your business that you don’t or can’t spend the time needed to be sure your financial data is up to date and accurate. And for many of you, understanding the ins and outs of financial information is not a strong suit, so you avoid the “hard” thing to do. What you may not realize is that your financial information is the only true indicator of the success or failure of your business. You can ignore it for a little while but it will catch up with you. Better to see what is happening, when it is happening, than be surprised by what appears to be a “sudden” downturn later on. Oregon legalized recreational marijuana sales on October 1, 2015. Some of you had customers lined up out the door and around the corner. It was very exciting and it felt like you were finally on the road to long term profitability. But how did you really do? Do you know?   Are you confident that the information you have is reliable? One of the major reasons businesses fail is poor management, and that goes to financial management as well. If cannabis financial management is not in your area of expertise, don’t wait, get help. Hire your own bookkeeper, engage an outside firm or find someone who can at least help you with the basics. Lastly learn how to read and understand your financial statements. Learn how...