Cannabis Business Accountants in Colorado

Key Points:

• Cannabis vs. Non-Cannabis Tax: Cannabis products face an additional 15% retail tax on recreational marijuana, atop standard state sales tax.
• Cannabis, CBD, and Hemp: Cannabis businesses have limited deductions and strict compliance under 280E; hemp allows standard deductions without 280E; CBD enjoys favorable tax treatment and lighter regulations.

What Does a Cannabis CPA Actually Do?

A Cannabis CPA focuses on the financial and regulatory requirements unique to the cannabis industry. For cultivators, they manage cultivation costs and compliance. Distributors rely on them for logistics, cash handling, and compliance, while processors need their skills in cost analysis and inventory valuation. Dispensaries depend on Cannabis CPAs for financial management, POS integration, and sales tax compliance.

• With more than 300 medical dispensaries and approximately 700 recreational stores alone, Colorado cannabis-related businesses, from cultivators to retailers, require specialized financial expertise to navigate the state’s complex regulations.

• Are you an Colorado-licensed CPA offering services to cannabis-related businesses? Request to be listed .

Colorado Sales Tax: Cannabis vs. Non-Cannabis

Colorado’s state sales tax on retail goods applies to cannabis as well, but an additional 15% retail marijuana tax is imposed on all recreational marijuana products.

Cannabis Business vs. Regular Business

Cannabis businesses require specialized accounting to manage complex licensing, Section 280E limitations, alternative payment solutions due to banking restrictions, strong security for high-value products, and strict seed-to-sale tracking and lab testing for compliance.

Differences Between Cannabis, CBD, and Hemp Businesses

• Cannabis (Marijuana): Marijuana businesses in Colorado face higher taxes due to limited deductions and must strictly allocate expenses to COGS, adhering to stringent compliance and reporting requirements.
• Hemp: As legalized under the 2018 Farm Bill, hemp businesses enjoy standard expense deductions and more flexible accounting practices without the restrictions of IRC Section 280E.
• CBD: Similar to hemp, CBD businesses benefit from favorable tax treatment with deductible expenses and comparatively lighter regulatory requirements, given their federal legality.

Expertise is Essential

The regulatory landscape and complex tax codes in cannabis demand experienced professionals to help businesses:

• Minimize Tax Liability: Navigate Section 280E restrictions and reduce tax burdens.
• Ensure Compliance: Stay updated with regulations to avoid fines.
• Optimize Financial Performance: Improve cash flow and support informed decisions.
• Mitigate Risks: Establish internal controls to protect assets and reduce fraud risks.