Accounting and the US cannabis industry: Federal financial regulations and the perspectives of certified public accountants and cannabis businesses owners

Cannabis-related businesses (CRBs) in U.S. states where cannabis is legal have long had difficulties finding the banking and financial services they require in a market where the federal government continues to consider cannabis illegal. Working in cash-only situations while trying to keep careful accounting, all while trying to keep the business afloat and clear of legal troubles, remains a challenge. This late 2020 paper by Owens-Ott recognizes that challenge and examines it further, delving into the world of the certified public accountant (CPA) and the role—or lack thereof—they are willing to play working with CRBs. The author conducted a qualitative study asking 1. why some CPAs are unwilling to provide services to CRBs, 2. how CRBs compensate for the lack of those services, and 3. what CPAs need to know in order to provide effective services to CRBs. Owens-Ott concludes that “competent and knowledgeable CPAs” willing to work with CRBs are out there, but the CPAs should be carefully vetted. And interested CPAs “must commit to acquiring and maintaining substantial specialized knowledge related to Tax Code Section 280E, internal controls for a cash-only or cash-intensive business, and the workings of the cannabis industry under the current regulatory conditions.”

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