Evolve your cannabis operations quickly
Fast-growing cannabis businesses need sophisticated internal controls
You’re focused on rapid growth. Making sales. Surviving in today’s hyper-competitive cannabis industry. But are you evolving and strengthening your internal processes in tandem?
The next level of success depends on a solid foundation of accounting processes and internal controls. Investors and auditors want to see well-ordered financial statements and mature cannabis business operations. If your current practices won’t hold up to stakeholder scrutiny, you need to fix them – and fast.
48%
The growth in U.S. cannabis sales from 2019 to 2020.1
1 "BDSA Reports Global Cannabis Sales Exceeded $21 Billion in 2020; Forecasts $55.9 Billion by 2026" BDSA, March 2, 2021.
3 keys to financial reporting and operational excellence
1. Review your internal controls
Analyze all of your company’s internal accounting, finance, and operational policies, procedures, and systems. Find gaps and areas of weakness. Confirm that you’re following optimal practices for inventory management, cash management, security and fraud prevention, separation of duties, and documentation, review, and authorizations.
2. Develop standard operating procedures
Put everything in writing: Create detailed documentation that spells out your company’s policies and procedures for employees, as well as accounting and finance practices. Established standard operating procedures give investors and other stakeholders confidence in your cannabis business operations.
3. Prepare now for a financial statement audit
Start early to prepare for an independent financial statement audit. Understand what documentation will be requested and make sure it is organized and accessible. Ensure that your recordkeeping is accurate, records are complete, and transactions have adequate supporting documentation.
Analyze all of your company’s internal accounting, finance, and operational policies, procedures, and systems. Find gaps and areas of weakness. Confirm that you’re following optimal practices for inventory management, cash management, security and fraud prevention, separation of duties, and documentation, review, and authorizations.
Put everything in writing: Create detailed documentation that spells out your company’s policies and procedures for employees, as well as accounting and finance practices. Established standard operating procedures give investors and other stakeholders confidence in your cannabis business operations.
Start early to prepare for an independent financial statement audit. Understand what documentation will be requested and make sure it is organized and accessible. Ensure that your recordkeeping is accurate, records are complete, and transactions have adequate supporting documentation.
Don’t go it alone: Crowe cannabis specialists can help
To evolve your cannabis operations quickly, you need an experienced specialist who understands the cannabis industry and can help you avoid costly mistakes. Whether you’re expanding to a new state or gearing up for an IPO, Crowe cannabis specialists can help.
Internal controls support
Work with a Crowe adviser who can assess your internal controls and help you establish or strengthen processes and procedures. Achieve greater operational efficiency, minimize risks, and increase investor confidence.
Audit-readiness consulting
If you are already working with an external auditor, we can support you with your audit preparation, assist in analyzing complex transactions for proper accounting treatment, and provide accurate financial reporting.
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The Crowe team is ready
The Crowe cannabis team is ready to listen, answer questions, and respond to your needs. Whether you’re a startup dispensary or an established multistate operator, we have the experience and knowledge to help evolve your cannabis business operations. Contact us today.
Partner, Consulting
Rebecca Young
Managing Director, Accounting Advisory
Qualified organizations only. Independence and regulatory restrictions may apply. Some firm services may not be available to all clients. Given the continued evolution and inconsistency of various state and federal cannabis-related laws, any company should seek competent legal advice relating to its involvement in the cannabis industry, including when considering a potential public offering as a cannabis-related company.