The cannabis industry is heavily regulated and for that reason, the financial framework is extremely complex. With legalization ramping up in more and more U.S. states, cannabis companies must adopt sound financial measures to survive.
Because cannabis companies have to operate within both state and federal regulations, companies are at risk of steep penalties or shutdown if they don’t properly manage their pocketbooks.
Though it can be a complicated market, it is also bringing exciting job opportunities to CPAs. It’s a fast growing and incredibly niche market, and it will only expand. Cannabis accountants are dealing in farming, chemical manufacturing, retail, and food production, and must come to the table with extensive specialized knowledge. The U.S. predicts the cannabis market will reach $70 billion by 2021.
To succeed in cannabis accounting, CPAs need to keep several things in mind:
This is a new industry and there’s not a lot of historical data to reference, so to make it in this complex accounting space, you need to do your homework. And, since you’re working both at the federal and state level, you have to be highly knowledgeable about political and tax issues across the board. Cannabis is highly regulated and the tax codes are complex. Fortunately, robust training programs do exist to provide accountants with the tools and knowledge they need to succeed.
Build a solid team
Rome wasn’t built in a day. To succeed in this market, you need a skilled team around you. Offering a solution to cannabis CEOs that includes bookkeeping, controllership, and tax planning is highly attractive to new clients who are looking for a one-stop shop. It wouldn’t hurt to also get friendly with local attorneys in the cannabis space, and remember to be thorough and responsive to you clients to gain an edge on competitors.
Get a seat at the table with cannabis CEOs
Social media is your friend. Find cannabis CEOs and other leaders in the space, and remember to keep your eyes peeled as new start-ups are popping up all the time. This is a burgeoning market! Taking the time to really understand the unique struggles and needs of this industry will help you find and retain clients.
No matter what industry you work in, FYIsoft has tools to help you succeed. Schedule a brief demo with FYIsoft today.