The legal cannabis and CBD/hemp industry is expected to be a $100 billion market in the next few years, with hundreds of thousands of new companies needing accounting and tax help. Many states start slowly, but as the effects of more jobs and tax dollars for cities and counties start to grow (as well as the demand), we will start to see pressure move things along more quickly. Not to mention, we have a real possibility for federal legalization very soon. We saw this happen in 2018 when CBD and hemp were fully legalized in the farm bill.
With cannabis legalization in limbo on a federal level, and individual states allowing the sale and production of cannabis, this leaves professionals like CPAs in a rather precarious position. On one hand, cannabis companies need accounting support to remain compliant and keep their licenses. But because cannabis is still considered a Schedule 1 substance by the U.S. Drug Enforcement Administration, there is some hesitancy for professionals like CPAs to provide services to this industry.
The truth of the matter is that there are thousands of businesses springing up all over the place, and there are not enough experienced accounting professionals to go around.
The following are the top five myths surrounding providing accounting services to the cannabis and CBD/hemp niches:
- CPAs can’t provide services to cannabis companies because it’s illegal on a federal level.
- Cannabis companies don’t need accounting services because they’re cash-based businesses.
- CPAs who provide services to cannabis companies will be targeted by the IRS.
- CPAs who provide services to cannabis companies will lose their licenses.
- CPAs who provide services to cannabis companies will be stigmatized and lose other clients.
Source: Accounting Today