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Marijuana Dispensary Banking Solutions

by Maxime Kot May 03, 2017

Top Accounting Issues Facing a Cannabis Dispensary

Some would think that opening a cannabis dispensary would be a dream job. For some, it is. Helping patients get relief from their symptoms can be fulfilling. If you’re a smoker and connoisseur yourself, it could be the epitome of “doing what you love.” However, owning a cannabis dispensary is also hard work. One of the biggest issues a dispensary faces is in accounting.

Finding Investors

Unless you're independently wealthy, you need investors to get started in the cannabis dispensary industry. Finding a way to finance your endeavor can prove one of the most difficult roads in the route to dispensary ownership. Getting a bank account for your business can be nearly impossible.

Why? Marijuana is classified as a Schedule I controlled substance by federal law. Banks are insured by the Federal Deposit Insurance Corporation. A bank doing business with a marijuana dispensary opens themselves up to the seizure of funds. Federal law also requires that banks must disclose cannabis-related bank activity as suspicious. The large banking institutions are refusing to touch cannabis despite state legality. This includes loaning startup money and providing bank accounts for the dispensaries.

Being unable to form a relationship with a bank can lead to other complications. If you have no banking account, it makes it difficult to take credit cards. In today’s economy, that can prove disastrous to a brick and mortar store. It can be doubly so for online retailers, who operate on an even thinner profit margin than brick-and-mortar stores.

Know Your State’s and Federal Laws

The nature of businesses make them susceptible to special laws and permits. Most professions require specific licensing such as medicine and law, others like marijuana and electronic cigarette businesses have to undergo special rules and regulations.

The legal system concerning medical marijuana can be quite complicated, requiring the services of an attorney to navigate. One example is that states like California, Colorado, and Arizona either have legislation pending that would require or already require medical cannabis dispensaries be operated as non-profits.

Income Tax Audits, What to Expect

If things weren’t already complicated enough, enter Uncle Sam and the Internal Revenue Service. Most businesses can deduct certain expenses like rent, utilities, and even employee salaries from their taxes. That does not apply to cannabis dispensaries. A decades-old law aimed at preventing drug dealers and smugglers from deducting their expenses at tax time is forcing many dispensaries to pay crippling amounts of income taxes.

This obscure tax rule has caught many a dispensary owner by surprise. They only find out about it when they receive an audit letter from the I.R.S. Yet, there is hope. Some dispensary owners in Colorado and California have successfully challenged the law in court.

Hire a Knowledgeable Accountant

Now that you are a business owner, you can’t leave your checkbook balancing until the end of the month. Hire a CPA that knows the business and the market. A CPA will also be able to tell you how to keep your books to avoid trouble with the law.

Another possible issue a good CPA can help save you from is keeping track of your accounts. Keeping your accounts organized is important to your financial security. Good bookkeeping practices will also come in handy should any of the inevitable red flags pop up and lead to an audit.

Safeguard Your Business Assets

Whether your dispensary is medicinal, recreational, or both, you have a lot of valuable and let’s face it, illegal inventory on your hands. From flowers and buds and seeds to concentrates, waxes, oils, and edibles – you have a lot to account for and protect. Not having the right kind of security system or accountability can lead to huge losses. If your business is bankless and cash-only, you have even more reason to fear things like embezzlement and theft. Protect your assets and see them grow over time.

The road to successful entrepreneurship is paved with stumbling blocks. Get a mentor if you can. Other dispensary owners who have ‘been there, done that’ can help guide you on your path and offer suggestions for how to scale your business.

Starting a marijuana dispensary faces innumerable issues. However, as time goes on and you gain experience in the industry, learning its quirks and pitfalls and how to negotiate them, it is no harder to run than any other business. Keeping your business legal within the laws of your state and keeping all of your financial information, inventory, and account records in order can go a long way towards ensuring your success.


Michael is a marketing and creative content specialist at with primary focus on customer satisfaction. Technology and fitness combined healthy lifestyle obsession are his main talking points


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