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Cannabis Business, How Do I Love Thee? Let Me Count the Ways!

Your Cannabis Business needs some extra TLC compared to a regular business. Here are just a few ways.

Your cannabis business is like any other business -- it requires planning and "keeping shop", and then more planning and more "keeping shop." Some say that your cannabis business requires that you "tend your garden." In fact, your cannabis business needs a lot of TLC! Call 646-467-4646 or email paula@gothamtaxsolutions.com for advice.

Let's look at just a few ways your cannabis business requires extra tender loving care (TLC) beyond what a regular business requires:

1) Business Formation -- The smart thing is to bifurcate your business. (Bi-fur-what?) That's right. Cut your business into two businesses, keeping the business that involves direct contact with the plan separate from other duties, such as cleaning, prepping surfaces, clearing irrigation lines, monitoring lights, and so forth. Doing so will help with compliance, and it will do a world of good for you with regard to taxes. Form two companies now, before you get too far along in the planning stages.

2) Vetting your investors -- Long before you can put the first seed in the ground, you need to check out your investors. For starters, make sure you verify that they are clear of liens, judgments, prior convictions, or pending law suits. Hire a lawyer or a private investigator to check them out. A minor drug bust eight-and-a-half years ago may be a deal breaker when it comes to applying to open a legal marijuana business. Better that you should know them -- warts and all -- before the licensing commission finds them for you and you have wasted thousands.

3) TAXES!!! -- Personal tax, payroll tax, business tax, cannabis tax...Pay these, and pay them proudly, knowing that we live in an era in which we have the privilege of operating a legal cannabis business. Take care that every single one of your investors (even your third cousin, twice removed, who kicked in a mere $5000 at the last minute) is current on their personal tax obligations. Keep current with your business payroll taxes. File your business tax returns and make your quarterly payments. Last, but not least, the extra cannabis tax that your business is assessed will have to be paid regularly and in cash, often with the escort of an armored car. Remember that legislation was passed on the idea that cannabis will generate tax revenues. Take the extra tender loving care to make sure that your taxes are paid!

4) Banking -- There is no Wells Fargo Wagon coming for you and your cannabis business. Because of the Schedule I characterization of cannabis, you will need to find a way to receive payments outside of the usual check and credit card method. Some businesses resort to cryptocurrencies. Others rely on cash only. Just know that you need a plan. And, at the end of the day, you need another plan for storing all of your fabulous pre-tax profits!

With tender, loving care, your cannabis business -- and your profits -- can grow. Call today for a consultation. 646-467-4646 or email paula@gothamtaxsolutions.com.

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