9 Things Every Accountant Should Do When Working in the Cannabis Industry

Real talk from someone who's been in it since 2015

Let’s be real, cannabis accounting isn’t sexy, but it’s absolutely essential. And in 2025, it’s more important than ever that we get it right.

I’ve been in the cannabis industry since 2015. Before that, I worked with multi-national corporations and Fortune 500s. I’ve helped raise millions in capital, supported clients through licensing nightmares, and built business plans that actually got funded. I’ve also seen what happens when things go sideways, books a mess, taxes unpaid, founders burned out, and businesses completely shut down.

If you're an accountant (or even just thinking about entering the space), this post is your straight-up guide to what you need to know before you dive into cannabis accounting.

This isn’t theory. These are the 9 lessons I’ve learned over nearly a decade in the trenches—shared with love, urgency, and a serious call for integrity.

1. Understand the Legal Landscape (And Never Assume Anything)

One of the biggest mistakes I made early on? Believing that a client fully understood their compliance responsibilities. Spoiler alert: they didn’t.

Cannabis is still federally illegal in the U.S., and the gray areas are where most people trip up. Every state has different rules, and CBD businesses don’t automatically follow the same playbook. Your job as a cannabis accountant is to be the person who knows what’s legal, what’s not, and what’s still a giant question mark.

2025 reality check: Banking is better, but it’s far from fixed. Compliance isn’t a checklist—it’s a moving target.

2. Get Obsessed with Regulation and Learning

You can't Google your way through cannabis accounting. You need to be obsessed with learning—reading tax memos, state guidelines, court rulings, all of it.

I've seen too many accountants jump into this space thinking they can "figure it out later"—but in this industry, later can mean a $50,000 penalty or a revoked license.

Bottom line: If you're not willing to continuously educate yourself, cannabis accounting isn’t your lane. And that's okay. But if you are? You're about to become one of the most valuable professionals in the game.

3. Embrace the All-Cash Hustle (and Document Like a Boss)

Let’s talk cash. Even in 2025, a shocking number of businesses are still mostly cash-based. I’ve walked into dispensaries with literal duffel bags of money. No joke.

That means you need bulletproof internal controls, a deep understanding of IRS cash-handling requirements, and a mindset that says, “How do I protect this business and myself?”

I’ve seen clients under audit who didn’t document deposits correctly—guess what happened? Disallowed expenses, lost deductions, and major headaches. Don’t let that be you.

4. Master Inventory and Cost Accounting

If you don’t understand IRC 280E or how to calculate Cost of Goods Sold (COGS), do not pass go.

This is where I’ve seen a lot of accountants fail. They think QuickBooks is enough. It’s not.

You need strong systems for inventory management, SOPs that your clients actually follow, and real conversations about what can and cannot be deducted.

Pro tip: This is also where you can shine—helping clients reduce tax liability legally is a game-changer.

5. Advocate for Your Clients (Even When It’s Awkward)

One thing I wish more cannabis accountants understood? We’re not just number crunchers—we're advocates.

Whether it’s working with regulators, helping clients prepare for inspections, or speaking up when something feels off, your voice matters.

In 2020, I helped a client avoid a huge penalty simply because we had documented conversations, SOPs, and receipts for everything. The regulator told me, “You’re the only consultant who’s shown up this prepared.”

That’s what you want.

6. Build SOPs (and Enforce Them)

I know SOPs sound boring—but they’re one of the best tools to protect profitability. And in cannabis, margins can get real thin, real fast.

Every client you work with should have clear, documented procedures—especially around inventory, cash, and compliance.

SOPs aren’t just for show. They’re your legal shield, your training manual, and your backup when sh*t hits the fan.

7. Document Everything (Yes, Even the Little Stuff)

This industry lives and dies by documentation. The number of times I’ve said “Did you write that down?” in a client meeting? Endless.

You need to document:
✔️ How you came up with your numbers
✔️ Conversations with regulators
✔️ Internal control procedures
✔️ Client decisions that might raise flags

Even an innocent mistake can turn into a huge liability without proof.

8. Build a Cannabis-Specific Referral Network

You cannot do this alone. And you shouldn’t try.

Cannabis clients need lawyers, HR experts, security consultants, tax advisors, and compliance officers. The smartest accountants I know have strong networks they can tap into—and refer clients to.

Not only does it elevate your reputation, it keeps your clients out of hot water and allows you to stay in your zone of genius.

9. Practice Ruthless Due Diligence

Here’s something I learned the hard way: not every client is worth it.

Some aren’t fully legal. Some don’t want to follow rules. Some will charm you until things go wrong—and then disappear.

You need to vet every client. Every vendor. Every partnership. Ask hard questions. Use professional skepticism. Do not take people at their word. Ever.

So… Is Cannabis Accounting Worth It?

Honestly? Yes. But only if you’re willing to do the work.

Cannabis accounting isn’t easy. There are still risks, cash flow challenges, and regulatory uncertainty. But if you’re called to this work—and you care about integrity, impact, and innovation—there’s so much opportunity to lead.

At Freedom Sun, I’m helping accountants, CFOs, and finance professionals step into this space with clarity and confidence. Through Cannabis Business Minds, I’ve trained thousands on what it really takes to succeed in cannabis finance. And I’m still here, doing the work—because it matters.

Want to Learn the Ropes the Right Way?

Check out the Cannabis Accountants Guide: You’ll walk away with a game plan, built by someone who’s actually been there. 👉 Get the Cannabis Accountants Guide

Final Thoughts

We need more accountants in this industry—but we need the right ones. People who care. People who show up with integrity. People who understand this is more than just weed—it’s a business, a movement, and a massive opportunity for transformation.

If that’s you, let’s go.