One of the fastest growing industries in the United States, and around the world, is the cannabis industry. It is estimated that by 2025, the worldwide market could reach over $50 billion dollars. The United States has long been a leader in the industry, but Canadian and European markets are gaining traction quickly.
Regardless of where you stand on the issue of medical or recreational marijuana, the industry is likely here to stay. Things are moving quickly as states posture themselves to reap tax revenue from both medical and recreational marijuana. It is not often that an entire industry is born.
Business challenges include raising capital, banking and insurance, strict state regulation and oversight, income taxation…oh, and the fact that the industry is in violation of federal law. Previous administrations had taken a soft approach to state legalized marijuana enforcement, but the current administration has reversed that stance, once again leaving the industry in turmoil.
For those looking to break into the industry, you will have to be well-funded, patient, ready to deal with incredible and constantly changing local and state bureaucracies, stiff competition, heavy risks, complex organizational structures, complicated recordkeeping, legal and social opposition, and, of course, taxation.
Not every tax professional is willing to represent clients in this industry or to learn the complex rules related to the state and federal taxation. At DiSanto, Priest & Co., we understand the rules and work with other legal and business professionals to assist you in evaluating your options, consulting on organizational form, payroll and banking, and customizing recordkeeping to ensure maximum tax benefit while working through local and state regulations that are, in many cases, antiquated and unprepared to handle this new, dynamic industry. As with anything that is new and different, there are as many questions as answers.
At DiSanto, Priest & Co., we are currently working with multiple clients directly and indirectly in the industry from care-givers, growers, and cultivators to complimentary industries like extraction and compounding. We understand the unique federal and state tax law related to the industry and can quickly get you started on the right foot. This is a tight-knit community that regularly shares knowledge on processes, vendors, regulations, and professional representation.
Our partner, Bill Pirolli, heads the division and has over 40 years of tax and business consulting experience. He was previously appointed to the prestigious National Conference of Lawyers and Accountants where marijuana issues were front and center on the agenda, including the study of nuanced federal and state law, providing both white papers and testimony before Federal officials.