Category: Financial

Starting a cannabis business legally under state law requires owners to consider a wide range of possible challenges. Some of the major considerations include possible federal enforcement issues if the DEA changes its stance regarding the Cole Memo; concerns with banking because many FDIC-insured banks do not want to handle…

Somewhere along the line, you made the difficult choice to become a part of the cannabis industry, which is fraught with risk of both criminal prosecution and excessive IRS scrutiny (read: disproportionate audit risk and huge tax rates). While we cannot predict what the current administration will do, we have…

Taxes are one of many conflicts between state and federal laws pertaining to the cannabis industry. States that have legalized cannabis for medical or recreational use treat all business alike, allowing the same deductions and credits for business expenditures. Under federal tax laws, however, most cannabis-related businesses are prohibited from…

Early in 2016, industry leaders worried that too many marijuana ballot initiatives could spread resources too thin, leading to losses at the polls. November’s election, though, saw recreational or medicinal measures pass in eight of nine states. With multiple other states authorizing medical marijuana or new regulatory structures earlier in…

Anybody involved in the cannabis industry has probably heard about Internal Revenue Code Section 280E, which was originally developed in response to a famous U.S. Tax Court case. Craig W. Smalley is the CEO and co-founder of CWSEAPA (www.cwseapa.com) and Tax Crisis Center (www.taxcrisiscenter.com), which both have locations in Florida,…

Valuing a cannabis-related business would not be much different from valuing any other business except that this business is based on a product that is illegal to grow and sell under current federal law. How this challenge is dealt with in states that have legalized it is the focus of…

Many cannabis companies seeking to raise capital appear to have some misunderstandings about how to do so. In order to clarify these prevailing misconceptions, here’s a look at five common myths within the cannabis industry about raising capital. Myth: Cannabis businesses cannot obtain financing. Unfortunately, many banks will not extend…

The complicated legal status of marijuana production and sale can make it difficult for cannabis businesses to insure certain risks. Despite the participation of several commercial insurance companies in the cannabis space, cannabis businesses are typically charged higher rates than traditional businesses for common insurance products. The abrupt withdrawal of…

One of the most common mistakes is chasing returns instead of focusing on goals. Interview by Greg James Darrin Farrow began taking a deeper look at the medicinal benefits of cannabis when a close friend committed suicide after just 10 days of being on a prescribed anti-depressant that had been…

Fire and theft pose the most significant threats By Brenda Wells When analyzing loss exposures, there are two things you have to consider: frequency and severity. Frequency is how often something might occur, and severity is how serious and costly it might be if it does happen. It is important…