Top 200 Cannabis Accountants

In the directory we do not rank accountants within the top 200, instead we aim to do our utmost to balance client recommendations and editorial decisions with as wide a geographical spread as possible to allow prospective clients to source cannabis, hemp & CBD specialists in the jurisdictions they wish to do business.

To be included in the directory we have researched individuals and teams, looked at the clients they’ve worked with, how long they’ve worked in and with cannabis businesses and their contributions to knowledge about cannabis tax issues through articles, commentary, participation in conferences and with cannabis related associations.

It is also important, we believe that any cannabis tax practice however big or small explicitly states they work in the sector via their websites and the social media platforms they choose to work with, also that they provide direct and simple instructions on how to be contacted and very importantly that cannabis work is not an afterthought but a core part of the practice.

In our research we note plenty of firms who had created a cannabis page but hadn’t provided the details of the individuals working in the practice only a general contact us  form. Also many practices who indicated generally that they worked in cannabis but no concrete information in personal bios on the firm website about the work they do.

Amongst these practices there may indeed be some excellent practitioners but as with our lawyers guides we believe that without initial clarity we are unable to recommend, firms, teams or individuals to prospective clients.

Please don’t hesitate to get in touch with any information, recommendations, clarifications concerning your thoughts about the directory. Our contact information is provided at the end of the editorial.

Cannabis Accounting in the USA

The cannabis industry in the United States is rapidly evolving, with more states regulating  for medical and recreational use and as of publication (April 2025) it looks increasingly unrealistic to expect a federally directed change to schedule 3 and new bills filed in both the Senate and Congress explicitly stating that taxation rules for cannabis not be updated.

Cannabis businesses face unique financial and regulatory challenges due to current federal laws that classify cannabis as a controlled substance as well as a plethora of state laws concerning taxation and financial reporting rules.

The current environment necessitates specialised accounting services, making cannabis accountants crucial for businesses navigating these complexities.

Cannabis accountants play a pivotal role in managing the financial aspects of cannabis businesses.

Primary Responsibilities Include

Tax Planning and Compliance: One of the most significant challenges cannabis businesses face is navigating the complex tax landscape, particularly Section 280E of the Internal Revenue Code. This section prohibits businesses from deducting ordinary business expenses related to the sale of Schedule I or II controlled substances, except for cost of goods sold (COGS). Cannabis accountants specialise in maximising allowable deductions and optimising COGS calculations to minimise tax liabilities within the constraints of 280E.

Regulatory Compliance: The cannabis industry is heavily regulated, with varying laws and licensing requirements across different states. Cannabis accountants must be well-versed in these regulations to ensure businesses comply with both state and federal laws. This includes managing cash flow, financial reporting, and ensuring that all financial transactions are transparent and compliant.

Financial Planning and Budgeting: Cannabis accountants provide strategic financial planning and budgeting services. They help businesses manage cash flow effectively, which is critical in a competitive market where many businesses fail due to cash shortages rather than lack of profitability.

Risk Mitigation: The cannabis industry is subject to intense scrutiny, with frequent audits and the risk of significant tax debts. Cannabis accountants help mitigate these risks by establishing robust internal controls and ensuring that financial records are accurate and compliant with regulatory requirements.

Challenges Faced by Cannabis Accountants

Cannabis accountants face several unique challenges compared to accountants working with other sectors of the economy.

Federal vs. State Laws: Despite growing legalisation at the state level, cannabis remains illegal under federal law. This creates a complex legal environment where financial institutions must navigate anti-money laundering laws and file Suspicious Activity Reports (SARs) for transactions involving cannabis businesses.

Banking and Financial Services: Many financial institutions are hesitant to provide services to cannabis businesses due to federal restrictions. Cannabis accountants must help businesses find compliant banking solutions and manage cash-intensive operations effectively.

Section 280E and Tax Implications: The inability to deduct business expenses under Section 280E significantly impacts the profitability of cannabis businesses. Cannabis accountants must be skilled in optimising COGS and structuring business entities to minimise tax exposure.

State-by-State Variations: Regulations and tax laws vary significantly from state to state, requiring cannabis accountants to have a deep understanding of local laws and regulations to provide effective services.

Importance of Specialised Cannabis Accountants

The specialised nature of cannabis accounting makes it essential for businesses to work with accountants who understand the unique challenges of the industry. General accountants may not have the necessary expertise to navigate the complex regulatory and tax environment of cannabis businesses. Key reasons why specialised cannabis accountants are crucial include.

Compliance and Risk Management: Cannabis accountants are well-equipped to manage the regulatory risks associated with the industry, ensuring that businesses comply with all relevant laws and regulations.

Tax Optimisation: They can optimise tax strategies to minimise liabilities and maximise deductions within the constraints of Section 280E.

Financial Planning and Analysis: Cannabis accountants provide financial analysis and planning tailored to the specific needs of cannabis businesses, helping them make informed decisions and manage cash flow effectively.

Future of Cannabis Accounting

As the cannabis industry continues to grow and evolve, the role of cannabis accountants will become increasingly important. Several factors will shape the future of cannabis accounting.

Legislative Changes: Potential federal legalisation or decriminalisation could significantly alter the regulatory landscape, impacting how cannabis businesses operate and access financial services.

Technological Advancements: The use of automation and compliance software will become more prevalent, helping cannabis accountants manage complex regulatory requirements more efficiently.

Increased Access to Financial Services: As more financial institutions begin to serve cannabis businesses, accountants will need to ensure that these services are utilised compliantly and effectively.

Cannabis accountants play a vital role in the success and compliance of cannabis businesses in the United States and their specialist sets of expertise in navigating complex tax laws, ensuring regulatory compliance, and managing financial risks is essential for businesses operating in this highly regulated industry.

As the cannabis industry continues to grow and evolve, the demand for specialised cannabis accounting services will only increase, making these professionals indispensable for businesses seeking to thrive in a challenging yet promising market.

Introductory overview of 280E Issues

26 U.S. Code § 280E – Expenditures in connection with the illegal sale of drugs
No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.

(Added Pub. L. 97–248, title III, § 351(a), Sept. 3, 1982, 96 Stat. 640.)

Source: Cornell Lii

Section 280E of the Internal Revenue Code is a significant challenge for businesses in the cannabis industry.

It prohibits the deduction of ordinary and necessary business expenses related to the sale of controlled substances, which includes cannabis. This provision was enacted in 1982 to prevent drug dealers from claiming business expense deductions. However, with the increasing legalisation of marijuana at the state level, 280E has become a major financial burden for cannabis businesses.

Impact on Cannabis Businesses

Increased Tax Burden: State-legal cannabis companies paid over $1.8 billion in excess taxes in 2022 compared to non-cannabis businesses, with projections to reach $2.1 billion by 2031.

High Tax Rates: The effective tax rate for cannabis companies can exceed 70%, significantly higher than the standard corporate tax rate of around 21% for other industries.

Limited Deductions: Cost of Goods Sold (COGS). Cannabis businesses can deduct the cost of goods sold but cannot deduct other business expenses such as rent, wages, and utilities.

Section 263A: While some expenses can be capitalised and added to COGS under Section 263A, this does not fully mitigate the impact of 280E.

Financial and Operational Challenges

Cash Flow: The inability to deduct business expenses reduces cash flow, limiting the ability of cannabis companies to invest in growth, research, and employee benefits.

Compliance Issues: Frequent late filings and penalties due to complex tax compliance issues are common in the industry.

Legal and Regulatory Challenges

Constitutionality and Litigation: Challenges to 280E. Some companies are challenging the constitutionality of 280E, arguing it is a penalty rather than a tax. However, previous legal challenges have in the main failed to create meaningful change to the existing status quo.

Refund Claims: Companies are advised to file protective refund claims in case 280E is declared unconstitutional, allowing them to potentially recover past taxes.

Regulatory Uncertainty

Rescheduling Cannabis: If cannabis is rescheduled from a Schedule I controlled substance, 280E might no longer apply. However, this change is uncertain and could take time.

Banking Reform: Efforts like the SAFE Banking Act aim to improve financial access for cannabis businesses but have faced significant delays.

Strategic Planning

Tax Planning: Cannabis businesses should maintain detailed financial records and consult with tax professionals to optimise their tax strategies within the current legal framework.

Investment and Growth: Companies must balance growth strategies with the financial constraints imposed by 280E, focusing on cost management and strategic investments

Section 280E poses significant financial and operational challenges for cannabis businesses, limiting their ability to deduct business expenses and resulting in high tax rates. While there are ongoing efforts to challenge and reform this provision, businesses must navigate these complexities through careful tax planning and strategic financial management.

Sean Hocking
Editor – Top 200 Cannabis Accountants
info@cannabislaw.report