FPJ CPA PC

My team and I are on a mission to help legal cannabis businesses make sense of complicated compliance, tax, and other administrative issues facing the industry. Sec. 280E disallows any deduction, other than COGS, in determining taxable income for any plant touching cannabis business. However, by following GAAP, maintaining accurate and compliant books, as well as utilizing cost accounting, cannabis businesses are allowed to allocate otherwise nondeductible indirect expenses to COGS; ultimately having a dramatic impact on their tax liability. We use advanced cost accounting techniques along with workpapers and processes for dispensaries, cultivators, and manufacturers that help the organization substantiate the allocation process. In the event of an audit, these will be invaluable. In fact, a recent IRS judgment found that the company Altermeds, LLC underpaid their taxes by nearly $400K! The IRS disallowed their COGS deduction because of poor accounting practices. Unfortunately, many cannabis companies are in the same position and don't know it. Let's work together to help before it's too late.