Janice O’Reilly Discusses Financial Strategies for Cannabis Industry at MJ Unpacked
At the 2024 MJ Unpacked event, held November 5-7 in St. Louis, Missouri, AAFCPAs’ Janice O’Reilly, CPA, CGMA, Partner shared valuable insights with Highly Capitalized Network on navigating the complex financial landscape of the cannabis industry. MJ Unpacked is the nation’s only cannabis industry trade event with exclusive attendance for licensed operators, researchers, and investors.
Janice, a seasoned operational and financial advisor to the cannabis industry, emphasized the importance of establishing the right company structure. Getting this foundational decision right is key for setting up effective accounting practices and ensuring long-term financial success.
Janice also discussed the challenges operators face with cash flow management, particularly given the industry’s unique tax structure. Due to Section 280E of the Internal Revenue Code, businesses in the cannabis industry are unable to deduct most ordinary business expenses from their taxable income. As a result, she advises that operators carefully plan their cash flow, considering the after-tax impact on their ability to cover operational costs and payroll while still reinvesting in the business.
Watch the Full Discussion
One of the key topics during her discussion was the potential future of Section 280E and its impact on those in the cannabis industry. While it remains unclear when, or if, the regulation will change, Janice expressed cautious optimism. A shift in 280E could open the door to safer banking options and provide businesses with more favorable access to credit, which has historically been a challenge for the cannabis industry.
As cannabis continues to gain broader mainstream acceptance, she stressed the importance of preparing for future developments in both legislation and financial services. Financial institutions, like those in any other industry, will be looking for businesses to demonstrate strong financial fundamentals including solid cash flow management and overall business health, before extending credit or offering other financial products.
How We Help
At AAFCPAs, we help cannabis businesses navigate the complexities of tax, finance, and operations with a comprehensive range of services. Since 2012, AAFCPAs has provided industry-leading expertise, helping clients overcome challenges like the burdens of Section 280E, cash flow management, and state-specific regulations. Our multidisciplinary team, including CPAs, CFOs, tax attorneys, and business consultants, offers tailored solutions to improve profitability, streamline operations, and support growth in the competitive cannabis market. CannCount, a wholly owned subsidiary of AAFCPAs, complements these efforts by providing high-level consulting and data-driven analysis to improve finances, operations, and cultivation for cannabis operators, investors, and start-ups nationwide.
If you have questions, please contact Janice O’Reilly, CPA, CGMA, Partner at 774.512.9046 or joreilly@nullaafcpa.com—or your AAFCPAs Partner.
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