Cannabis

Accounting Today - - Coverstories - From page 7

about the bank is­sues, the op­er­a­tional is­sues, what prod­ucts do these peo­ple sell, what is­sues do they have, what are the pol­i­tics of it, what’s go­ing on with the laws and the reg­u­la­tions.”

Not just grow­ers and sell­ers

“The cannabis in­dus­try is much big­ger than many peo­ple un­der­stand,” said Zach Gor­don, a se­nior man­ager at Janover. “There are so many busi­nesses that fill in the gaps, from truck­ing and se­cu­rity to light bulbs and ev­ery­thing in be­tween.”

From plumbers, elec­tri­cians and se­cu­rity, to real es­tate, light­ing equip­ment, chem­i­cal ex­trac­tion, and pro­fes­sional ser­vices, cannabis in­volves a huge ar­ray of an­cil­lary busi­nesses be­yond the farms and dis­pen­saries. That ecosys­tem is in need of ac­count­ing and tax ser­vices — and be­yond them, there is a uni­verse of in­vestors look­ing for help in this area from ac­coun­tants. Janover, for in­stance, of­fers a wide range of ser­vices to mar­i­juana com­pa­nies, from book­keep­ing up to cor­po­rate struc­ture, but it also works with in­vestors in the space, par­tic­u­larly fam­ily of­fices look­ing to judge the qual­ity of po­ten­tial in­vest­ments in the in­dus­try.

While gen­er­ally skew­ing to smaller, less fi­nan­cially so­phis­ti­cated com­pa­nies, the in­dus­try also in­cludes busi­nesses of all sizes and lev­els of ex­pe­ri­ence.

At Sil­i­con Val­ley-based Roseryan, which launched its cannabis so­lu­tion this spring, “We de­cided to fo­cus on all seg­ments of the in­dus­try, but the area that I feel has made us pop­u­lar out there right now is clients look­ing to scale,” ex­plained vice pres­i­dent of busi­ness devel­op­ment Mau­reen Ryan, who spear­headed the firm’s ini­tial ex­plo­ration of the space four years ago. “They’re grow­ing rapidly, and they don’t have the talent to scale their op­er­a­tions. Our peo­ple are ex­tremely op­er­a­tional — when a com­pany is in hy­per growth mode, you need the abil­ity to plug and play. What you need isn’t al­ways known, and may change in the next 12 months.”

A grow­ing com­mu­nity

Ma­ture in­dus­tries come com­plete with long-es­tab­lished net­works; those are still evolv­ing in the cannabis space.

“Most of Roseryan’s ecosys­tems weren’t play­ing in the cannabis space, so we have to de­velop an­other ecosys­tem to ser­vice it — at­tor­neys, au­di­tors, tax, pay­roll, in­sur­ance — ev­ery­thing you can imag­ine you’d need to run a busi­ness,” ex­plained Ryan; her firm ac­tu­ally be­gan es­tab­lish­ing its con­tacts long be­fore it launched its ser­vices of­fi­cially last spring.

There’s also a strong sense of com­mu­nity in cannabis that is sig­nif­i­cantly bol­stered by the fact that, for many, it’s more than just a busi­ness op­por­tu­nity.

“Get in­volved in your lo­cal com­mu­nity — ev­ery ma­jor city has cannabis ad­vo­cacy groups, and they have meet­ings and events,” urged Hun­z­icker. “If you want to pick this as your niche, get in­volved in this move­ment — it’s more than a niche, it’s a move­ment.”

Work­ing with that move­ment can also have a marked im­pact on ac­coun­tants.

“I was told I’d be­come an ad­vo­cate for cannabis, and I didn’t think that would hap­pen,” re­called Ryan. “And yet, the more you’re in the in­dus­try, the more you’ll be­come an ad­vo­cate. It just hap­pens. You learn a lot more about the in­dus­try, ver­sus the pre­con­ceived no­tions, and all the hypocrisies and in­equities that sur­round this — and you be­come an ad­vo­cate.”

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