Currently, 11 states and Washington DC have fully legalized cannabis sales and 22 more permit medical marijuana. The rapid expansion of this industry is exciting for everyone involved, but it has created some growing pains in the process, particularly in terms of accounting. As the industry has matured, businesses involved with cultivation, manufacturing, distribution, and retail have seen their balance sheets become a lot more complicated. Perfectly tracking financial data is important from a business perspective, but it’s especially critical in a heavily regulated cannabis industry with high standards for accountability. Meeting these standards and seizing all the opportunities the industry offers requires superior bookkeeping capabilities, so many in the industry are implementing cloud accounting software. Here’s why:
Comply With All Applicable Regulations
State and local regulations strictly mandate how the cannabis industry can conduct business. Failure to comply can lead to loss of license, effectively closing a business permanently. Cloud accounting makes it easier to achieve perfect compliance because the software is automatically updated to reflect the latest rule changes. Staying within the letter of the law becomes an effortless process, which relieves a huge source of uncertainty for the entire cannabis industry.
Prepare Extensive Audits With Ease
Proving a cannabis business is compliant typically involves an extensive auditing process. Finding the necessary data and compiling it correctly is a laborious process, but it’s absolutely necessary considering the consequences of non-compliance. Cloud accounting software automatically integrates data from across the entire business. Preparing an audit is as easy as defining what it should include. Once the software is handling the heavy lifting, cannabis entrepreneurs can use the time they save to focus on the bottom line instead of on auditing.
Conduct Multi-Entity Accounting
The cannabis industry relies on unique products and strong brand recognition, making it ideally suited for a “chain” business model. Opening multiple dispensaries makes perfect sense from a business perspective, even if it makes accounting much more complicated as a result. When accounting software lives in the cloud instead of at a specific location, multi-entity accounting is easy. Data from each location is collected onto one platform and updated in real-time, giving decision-makers a complete look at financial performance at all times.
Accommodate Cryptocurrency Payments
Since cannabis remains illegal at the federal level, dispensaries have limited access to card-processing options and deal primarily in cash payments. Some accept cryptocurrency in order to give customers more purchasing options, but many basic accounting solutions can’t accommodate this type of payment. However, cloud accounting software can, and since it’s automatically updated, any changes to the crypto economy are instantly reflected in the accounting system.
Cloud accounting software is the obvious choice for the cannabis industry, but it’s still a challenge to pick the right solution and migrate to it successfully. The team at Alta Vista is here to help. We understand the issues facing the cannabis industry, and we are uniquely equipped to customize solutions for accounting and compliance. We have even partnered with MJ Freeway, the top seed-to-sale platform on the market, to enhance the services we provide to the cannabis industry specifically. Please contact us to learn more.