March 24, 2020
WASHINGTON–(BUSINESS WIRE)–New Frontier Data, the global authority in data, analytics, and business intelligence on the cannabis industry, in partnership with CohnReznick, a leading advisory, assurance, and tax firm, releases U.S Cannabis Accounting & Financial Management: 2019-2020 Best Practices. This report addresses the key themes cannabis business decision-makers must consider as they plan, grow, and compete in this opportunity-rich but high-risk environment.
“In such a fast-evolving sector, it is imperative that investors and operators in the industry – and those seeking to enter it – understand the complexities of running a legally compliant cannabis business,” said New Frontier Data Founder & CEO Giadha Aguirre de Carcer. “Amidst increasing competition and M&A activity, well-run businesses with optimized financial management and well-managed accounts will have significant advantages over less-efficiently run competitors.”
Key financial issues that operators must understand to effectively and competitively operate in the industry include:
- All plant-touching businesses are denied certain deductions under tax code Section 280E.
- Lowering operational costs will be a source of competitive advantage.
- Operating a cash-based cannabis business creates additional complexity and security risks.
- As company valuations rise, thorough due diligence is now more important.
- Businesses should prepare emergency response protocols to minimize disruptions.
- Cannabis real estate is growing in popularity, but it is not without risks.
- Technology plays a continually greater role in operationalizing, diversifying, and regulating the industry.
- In a global cannabis industry, businesses looking to expand internationally should begin planning early for the best-suited business structures (and accounting practices) to so do.
“This report identifies how to navigate some of the industry’s critical accounting issues that our team has seen firsthand from clients and tracking federal regulations’ impact on the industry. We hope this report is an opportunity for cannabis businesses and other stakeholders to manage risk and lower their tax exposure,” said Michael Harlow, CPA, Partner, CohnReznick.
U.S. Cannabis Accounting & Financial Management: 2019-2020 Best Practices is available for download on New Frontier Data’s online cannabis business intelligence platform, Equio. Start a free trial here. Download the free executive summary here.
To accompany the report, New Frontier Data and CohnReznik will host a free webinar on March 25, 2020, Navigating Capital Restraints and Global Crises in the Cannabis Industry. Speakers John Kagia, Chief Knowledge Officer for New Frontier Data, and Michael Harlow, CPA, Partner at CohnReznick, will discuss the most important trends currently shaping financial management in the cannabis industry.
This discussion will continue at the upcoming Global Cannabis Town Hall: New Economic Realities on April 2, 2020.
About New Frontier Data:
New Frontier Data is an independent, technology-driven analytics company specializing in the global cannabis industry. It offers vetted data, actionable business intelligence and risk management solutions for investors, operators, researchers and policy makers. New Frontier Data’s reports and data have been cited in over 80 countries around the world to inform industry leaders. Founded in 2014, New Frontier Data is headquartered in Washington, D.C., with additional offices in Denver, CO and London, UK.
New Frontier Data does not take a position on the merits of cannabis legalization. Rather, its mission and mandate are to inform cannabis-related policy and business decisions through rigorous, issue-neutral and comprehensive analysis of the legal cannabis industry worldwide. For more information about New Frontier Data, please visit: https://www.NewFrontierData.com.
As a leading advisory, assurance, and tax firm, CohnReznick helps forward-thinking organizations achieve their vision by optimizing performance, maximizing value, and managing risk. Clients benefit from the right team with the right capabilities; proven processes customized to their individual needs; and leaders with vital industry knowledge and relationships. Headquartered in New York, NY, with offices nationwide, the firm serves organizations around the world through its global subsidiaries and membership in Nexia International. For more information, visit www.cohnreznick.com.