Accounting and financial services have become the unlikely stars of a complicated ecosystem. No matter what your skill level, there may be an opportunity for you.
4 min read
Opinions expressed by Green Entrepreneur contributors are their own.
As the cannabis space matures, it’s becoming increasingly populated with service providers from a diverse range of ancillary industries. Among them, accountants and bookkeepers have become some of the most sought-after specialists in the field. With convoluted tax, regulatory, and banking issues evolving too rapidly for cannabis businesses to keep up, they’re looking for experts to help them navigate.
Related: Business Ideas for Those Who Don’t Want to ‘Touch the Plant’
Accountants to the Rescue
This makes sense. The stakes are high for a cannabis CEOs, with the fate of their business resting on keeping the company fully compliant with complex and highly-nuanced regulations to avoid penalization or shutdown. With a striking gap in the space for qualified professionals equipped to support business owners in maneuvering the risky regulatory landscape, accountants and bookkeepers are finding major opportunities to open up shop and specialize in this promising new cottage industry — allowing them to have independence and flexibility, not to mention a new source of clients and significant new revenue stream.
With cannabis still classified as a Schedule 1 drug, business owners face a number of complications unique only to this still-developing — and partially illegal — industry. Whether we’re talking about growing, banking, transporting goods, or paying bills, the day-to-day challenges of running a cannabis business are entirely distinct from any other sector, and most cannabis CEOs lack the skill set to circumvent the countless risks involved. This means that accounting professionals interested in serving the niche must commit to learning about the complicated obstacles posed by federal, state, IRS, OSHA, and FDA regulations. They must educate themselves on 280E and 471 tax rules, developing a sound understanding of these key issues and CEO pain points will allow aspiring cannabis accountants to help clients navigate tricky waters and remain audit-ready at all times.
Related: Navigating the Top 3 Post-Startup Challenges for Cannabis Businesses
A Software Solutions Opportunity
Beyond the regulatory environment, another major challenge putting cannabis businesses at risk are the current poorly-functioning cannabis software solutions, which inhibit them from utilizing proper accounting and bookkeeping procedures. In my opinion, there is simply no accounting operating system that adequately caters to the needs of these businesses. The dominant accounting software, Quickbooks, is not cannabis friendly and does not offer a chart of accounts tailored to cannabis entities.
With many cannabis companies operating across multiple sub-verticals — including farming, food production, chemical manufacture, and retail — documentation and record keeping become even more difficult to manage, as these intricate multi-entity structures use cost and consolidated accounting with complex inter-company transactions. For this reason, a majority of cannabis companies require guidance from experienced and knowledgeable professionals to implement standard operating procedures and bring their books up to par.
All Skill Levels Can Apply
The bottom line: Opportunities for accounting professionals are abundant in the cannabis realm and ripe for the picking. For the most part, larger accounting firms are avoiding the space altogether — ultimately leading to a growing demand for those willing to become involved with cannabis businesses. Without “big 4” firms to turn to, multi-million dollar operations must find smaller firms or individuals that are inclined to help them with their accounting and bookkeeping procedures.
For individuals looking to enter an emerging industry that is as fast-paced as it is lucrative, building a solid foundation of cannabis accounting skills is a strategic career move — one that does not even require CPA status. There are numerous resources to turn to for more information on cannabis accounting, beginning with the AICPA website. In addition, specially-designed training programs are available to provide finance professionals with the knowledge and tools of the trade.
Whether you’re looking to grow your current accounting practice, or simply have the strong desire to fill a major gap in the industry, consider specializing in cannabis accounting. The cannabis market is projected to reach $47 billion in the next ten years. Now is the time to get in on the ground floor, become an expert and create a lifelong, bankable specialty. In addition, you will work with clients and projects that are challenging, yet exciting, and play an important role in bringing forth the key solutions that will help businesses thrive in a competitive and booming sector.
Related: 9 Business Ideas for People Looking to Cash in on the Marijuana Boom