Financial Tips For New Cannabis Dispensary Owners
If medical or recreational cannabis is legal in your state and you are opening a dispensary to get in on the ground floor of this growing industry, then these tips will help you manage the financial aspects of your new business:
Tip: Understand U. S. Tax Code 280E
Since cannabis is still classified as a Schedule 1 drug under United States law, your dispensary falls under U. S. Tax Code 280E. This section of the tax code regulates how you are able to deduct expenses for your business when filing its federal income taxes. The text of U. S. Tax Code 280E can be found here. To avoid getting stuck with a massive tax bill at the end of your fiscal year, make sure you understand the tax code and how it applies to your new business.
Tip: Create a Reasonable Budget for Your Business and Stick to It
Just as your household needs a budget so you don't overspend your money in some categories and leave yourself short in others, so too does your new cannabis dispensary. If you have not yet sat down and written a budget, you must do so. At a minimum, your budget should include all of your monthly costs for:
- location rental
- cost of wholesale products
- employee costs
In addition to the above, you also need to budget for the costs of any licensing your cannabis business requires in your state and city.
Tip: Apply for a Cannabis Merchant Account to Avoid an All-Cash Business
In the past, cannabis dispensaries had to be all-cash enterprises, and this exposed them to a lot of risk from theft. Thankfully, today there are many financial institutions who have stepped into the industry and offer special merchant accounts for marijuana dispensaries.
Before you open your store for business, you must apply for a cannabis merchant account that will allow your dispensary to accept credit cards and keep your income in a bank account where it will be much safer than in your safe.
Tip: Hire an Accountant Who Has Experience in the Cannabis Industry
Finally, since your new cannabis business needs to file taxes and make sure all of its accounting stays on the legal side of the law, just like any other business does, you need to hire an accountant who has experience in the cannabis industry. If there is no accountant in your immediate area with relevant experience, then this is one case where traveling to a larger city makes a whole lot of sense.
For more information, talk to companies like CBD Merchant Account