Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Balancing the Future Ep. 20 - Entrepreneurship & Endless Opportunities in Accounting with Naomi Granger
236 Plays14 days ago
Naomi Granger joins us to share insights from her world as an accountant-turned-entrepreneur. After beginning with a Big 4 accounting firm, she leveraged her accounting skills to become a successful entrepreneur in the cannabis industry. Here, she highlights both the challenges and rewards of building a business in a rapidly evolving sector, encouraging listeners to embrace discomfort as a catalyst for growth and to explore ancillary roles in emerging industries.
Earn CPE by listening to this podcast through a Becker Prime CPE subscription.
Listen to this episode through your Becker LMS platform to complete practice questions, pass the final exam, and earn CPE credit.
Already a Becker Prime CPE customer? Login here.
Have access to Becker CPE through your employer? Earn CPE credit for this podcast however you consume Becker CPE, either through your company’s LMS or via the Becker platform. Not sure where to log in? Check with your CPE admin.
Learn more about CPE Podcasts from Becker: https://www.becker.com/cpe/becker-podcasts
Recommended
Transcript
Introduction of Naomi Granger's Career
00:00:09
Speaker
Hi, my name is Christopher Mitchell and thank you for joining me on another episode of Balancing the Future. i am excited, excited, excited to have Naomi Granger ah just be with us today and just share on her background and all of the amazing things that she's been able to accomplish.
00:00:27
Speaker
I know a lot about her background. I know she worked in big four. She she worked for several of the big four. I won't spoil it because I want us I want her to share with us exactly you know what the trajectory of her career looked like. So welcome, ma'am.
00:00:42
Speaker
And I can tell you this. I know for a fact I didn't share enough. I know you've done a lot, not only within your own firm or for your own firm, but within the community. So please share more.
Transition to Entrepreneurship
00:00:56
Speaker
Awesome. So happy to be here. Thank you for having me. And yeah, just a little bit about my background. So I started my career in public accounting. I've worked for three of the four big four. I actually started right when it became big four, because it was like big five, big eight, big six prior to that.
00:01:14
Speaker
And i started with PricewaterhouseCoopers, and I moved on and worked for a couple of the other firms. And then I moved on and worked for corporate I worked for the Home Depot.
00:01:25
Speaker
I've worked for Morgan Stanley and I've been all over the place. And then at one point in time, I know it was 2009 when Tim Ferriss came out with a book, The 4-Hour Workweek, I decided that's what I wanted.
00:01:41
Speaker
And so bump these 90-hour weeks, I wanted a four-hour one. And so at that point, I started to do research and learn a little bit more about becoming an entrepreneur, ah working online. And I knew that was the past path for me. So I developed my exit strategy and I have been an entrepreneur for the last 10 years.
Working in Big Four Firms
00:02:03
Speaker
That's all very interesting, but I'm going to go back to the three firms. Would you just settle this for now? Is there a difference? When we go from one firm to the next firm to the next, I know we're looking for a different experience. Maybe it's a different solution that we're delivering.
00:02:20
Speaker
Is there a big difference and and in the big four? So ah my um time in the big four, they were different. There were different purposes. It wasn't I left one to go to the next.
00:02:32
Speaker
I started at Deloitte and that was an internship while I was in college. um So I was at Deloitte in their tax department. So that was totally you know different. I was working in their tax department and realized I did not want to do taxes.
00:02:45
Speaker
um But I did that as an intern. Then when I graduated college, I went to PricewaterhouseCoopers as in their external audit department. um So I was there, made it to senior manager. um And then from there, I went to corporate and and worked at, you know, I said the Home Depot, Morgan Stanley.
00:03:03
Speaker
um But then from there, I ended up working for an accounting resources firm, which was the Siegfried Group. And they hired me out to EY, their client, to be as a manager on an external audit because I had such a strong um audit background.
00:03:21
Speaker
So it worked out that I've been to three of the four, but it wasn't because I just left one to see if the grass was greener. um But I can tell you that external audit within PricewaterhouseCoopers and EY was like night and day. It was totally different. And I'm you think It was the same ah level of stress, um but just, yeah you know, what they say, astroturf. is It's just another shade of gray.
00:03:50
Speaker
Wow. Yeah.
Exploring Accounting Career Paths
00:03:52
Speaker
So let let me ask you a question as it relates to options. Because we think about accountants or those that are coming up and through the ranks, think that they don't have options.
00:04:02
Speaker
I have to either do tax, I can do audit, but there's so much more that you can do. I mean, what have you learned just along the way and just the gravity of being able to explore you know various firms and different options as relates to getting that right skill set so you can be successful and take care of yourself?
00:04:20
Speaker
I mean, what did you learn? Yeah, so I mean, when I came into accounting, like I came from the Cosby Show days where these were the careers, either you're gonna be an attorney or you're gonna be a doctor.
00:04:33
Speaker
And then somebody put it in my ear, well, if you like math, you should try accountant. So there weren't very many. I didn't really know about the technology options. I didn't know about, you know, mean I mean, I knew there were actors and things like that, but I just didn't even, and I knew there's support around all of these different careers.
00:04:52
Speaker
ah that you can, they need supporting roles. And I didn't know anything about that. So I mean, I'm really glad that I went into accounting because there's always going to be a need for an accountant. um Well, we got AI coming, so we'll see. We'll see about that. But for the most part, there's always going to be a need for an accountant, no matter if the business is doing good, no matter if the business is doing bad, the numbers need to be counted. And that's kind of one of the main things that I learned because some of the corporate ah jobs that I had, they weren't performing very well, but we were still employed because we still needed to let the investors know what was happening and make sure that everything was captured properly and look at the analytics and see if we could turn things around. So
Advancing in Accounting Careers
00:05:36
Speaker
ah there's And now i'm I'm looking and interested in, you know, there's forensic accounting and there's all these things that are going on with court cases and legal cases. And, um you know, you can become an attorney. Like I work heavily with tax attorneys, which I feel like are the most brilliant people on this planet, um but fighting tax court cases and things. Like ah there's a lot of different fascinating things you can do, but it's not until you do something that you don't like.
00:06:06
Speaker
that you realize what you do like. um So it just takes getting out there and trying and and trying your head at a bunch of different roles to see what what sticks and what you like. So there was one role. You said senior manager.
00:06:20
Speaker
You don't get the senior manager in public accounting unless, in my opinion, because I've been a partner and in accounting in an accounting firm, and I know it's a lot of work. How did you get there? And what I mean by that, I don't mean just going up the ladder, but I know it takes a support system.
00:06:36
Speaker
What did your support system look like as you started out here? Well, part of it was to look for people who look like me, request meetings with them and ask questions about, you know, what do, what can I do? What should I do? How, how can I do this? And see if they're my ally. Cause everybody that looks like you won't, aren't all your ally either.
00:06:58
Speaker
um So getting a feel for them, seeing if they are your ally, seeing if there's somebody that you can trust and you you can bounce ideas off of. um But then a lot of times I just looked around and saw what were the people doing in the positions where I wanted to be?
00:07:14
Speaker
um i also looked around to see where can I add value? Where can I create things that have not been created that can propel me and put me in front of people that may not notice me or may not see me?
00:07:27
Speaker
um So I was always the one that was raising my hand and volunteering for the roles that were coming up and that that nobody wanted or people just weren't to aware because a lot of people, you know, you get comfortable with the current role. But I was the one that wanted to learn every single new industry.
00:07:44
Speaker
I didn't want to be pigeonholed into one industry. Once I learned revenue recognition over here, I wanted to learn manufacturing and things over there. um So I was always volunteering. And then where I saw that there was a need ah for maybe additional training and support for the staff,
00:08:00
Speaker
I developed it and proposed it and say, hey, you know, this is really confusing. And um here's a presentation that I pulled together that may make this a little bit easier. And, you know, so I've always been the one. And even today as an entrepreneur, if you can solve people's problems, you're always going to find a way that to make money.
00:08:22
Speaker
You know, that's a nice segue into what an entrepreneur.
Challenges of Entrepreneurship
00:08:25
Speaker
There's a lot of individuals coming out of college today. They want to be entrepreneurs, but there's a lot of work that goes into it.
00:08:34
Speaker
I mean, you just reflected on your background and you said, hey, I started here, three firms, senior manager, and then I decided it's time for me to step out and experience you know what entrepreneurship feels like, looks like, and just dive straight in.
00:08:51
Speaker
i mean, you made the decision, but I want to just spend a few minutes. I mean, what's what's the challenge in being an entrepreneur? Because when I think about it, I've got a couple of companies as well.
00:09:02
Speaker
And I know a business, the run of business is not easy. To title yourself a CEO, it's a lot of work. But you stepped out and you were successful, but what were some of the challenges? What you think about, first of all, that, hey, why am I doing this? And and there's got to be something that you think is probably difficult. to And I know there are pluses and we're going to get to those, but what are some of those challenges?
00:09:25
Speaker
Yeah. And I face those challenges still every day. Like did they never go away. um So some of the main challenges is, first of all, we're not taught to be an entrepreneur. At least I wasn't when I came up through school and I i went and got higher education. So I got my MBA, Masters of Business Administration. But I was taught to be an employee.
00:09:45
Speaker
not an entrepreneur. So the first the struggle was I had to go back to school and learn what entrepreneurship meant. I had to learn how do I market myself? Because as an employee, you don't go out there and get business unless that is your role to market for the firm, but you don't go out there and get business. You know, the partners,
00:10:05
Speaker
and the marketing team, they've they've landed the business, you're just assigned the role. And so you have to first learn how to market yourself, which is completely, you wanna just be in your craft and do accounting, um but now you have to be put on the marketing hat.
00:10:20
Speaker
And then in order to put on the marketing hat, you've got to understand the different levels of marketing. There's social media marketing. There's visual. You need to create visual assets. There's copywriting that's required if you're doing websites or landing pages.
00:10:34
Speaker
um you If you're making brochures, there's copywriting in there. there's You need to be able to understand key pain points and be able to speak to them. There's just so many different skills that I had to learn in just that one piece of being an entrepreneur.
00:10:50
Speaker
that I was never taught anywhere. So I had to go back to school. And also when I came up, social media and all that stuff wasn't, it was it was just brand new. you know We had MySpace and then Facebook was released before I finished ah college.
00:11:05
Speaker
And then um you know then it expanded from there. But when social media and Facebook was first released, it wasn't there weren't wasn't marketing yet. on those platforms.
00:11:17
Speaker
So we were never taught that. And so I ended up going back to school and I ended up, and it wasn't your traditional university, I ended up finding mentors who were doing what I wanted to do.
00:11:28
Speaker
um So who were already out there doing what I wanted to do. I took online classes and training. um I found communities of people who were already doing what I wanted to do and started networking and going to conferences and events and learning what it is that I need to do to get out there and become an entrepreneur.
00:11:50
Speaker
um And so and um and now we have this whole AI revolution that's going on. So I'm finding new communities and like, okay, what is this? And how is this gonna work for me? And how do I implement this thing? So the learning never
Importance of Learning and Adaptability
00:12:02
Speaker
stops. And in fact, it's going to become a constant.
00:12:06
Speaker
Like we are in the information age. So prior to, I think they say something around like 1996, until the beginning of time. I think from 1996 to 2012, more information was generated than from 1996 through the beginning of time.
00:12:24
Speaker
And so, and that was a stat that Google put out like years ago, now we're in 2025. And we have AI, so I'm pretty sure that's kind of like 10x at this point. So we're in the information age. There's so much information out there.
00:12:40
Speaker
um And I just don't really feel like the universities are going to be able to keep up with, you know, a textbook is going to be outdated as soon as it's finished being written. It hasn't even been published. It hasn't.
00:12:51
Speaker
you know, all that stuff. So um just going out there and and getting more more in information and education on what it is I want to do. And then also giving myself permission to change my mind.
00:13:06
Speaker
um And so that's one of the biggest things. Like if you go into college, you go into university and you decide I want to be this. um And then you've done four years, five years, six years, however many years and whatever advanced degree you get and you get out there and then you realize how.
00:13:23
Speaker
I don't know if I really want to do this. It's really hard to give yourself permission to change your mind and change roles because you've invested so much of your life into this this one thing.
00:13:35
Speaker
um So I had to start giving myself permission to not only change my mind, so also, well, I don't really think failure is ah is a real thing, but also to quote unquote fail and not do that anymore and switch gears and do something else.
00:13:53
Speaker
Awesome. Awesome. So that's a lot. and And I know what goes into starting up in those challenges that are in front of you because I've started multiple businesses and each and every one has been different.
00:14:06
Speaker
And I am I don't consider myself an expert at any particular thing, I grind and I grind away until it's up and running and I'm seeing success. So I can identify with you.
00:14:19
Speaker
So what's that plus what's that plus? Because CEO, that's cool. That's a nice title. It feels good, especially when you put in the work. But what's that positive what's the one or two positives that stick out for you?
Independence and Complexity in Entrepreneurship
00:14:31
Speaker
Okay, so this is a positive and a negative. So I love the idea of being my own boss and I hate being told what to do.
00:14:43
Speaker
I've been like that since forever. i didn't like my parents to tell me what to do. i was like i was very, very independent. In fact, I moved from um Las Vegas all the way to Florida to go to college so that I can be independent,
00:14:56
Speaker
Nobody is telling me what to do. I left home and went as far away and stayed in the United States as far as I could. But um but yeah, so I don't like being told what to do. However, that's also a negative. Sometimes it's just easier to wake up and somebody just tell you, OK, this is your focus for today.
00:15:13
Speaker
um So as an entrepreneur, you have to really understand you know, what's going on and where is, where's the best place to focus your energy each day um and really plan out your day and know where the money drivers are and making sure that you're focusing on those, those different things that are going to move the needle for your business.
00:15:34
Speaker
And sometimes a lot of times, like every single day, feel like everything I do every single day is brand new. It's not like a well-oiled machine where I know it but you know,
00:15:44
Speaker
every day is going to be the same. It's always like, hmm, maybe I should try this now to see if it will you know increase revenues over here.
00:15:55
Speaker
um And so it's it's like um you're just trying things out and so and throwing things against the wall to see if it would stick. um So I like the fact of being able to be my own boss, um being able to take a day off. ah One of the biggest things that I say um when I talk to people about things that I hated about corporate America is that I felt like I was always needing to ask permission.
00:16:17
Speaker
to live life. So, and I understand, like if you're working and you have a bunch of employees, you can't just have this employee, you know, everybody doing whatever they want to do. But I mean, ask permission to take vacation, ask permission if you want to take a doctor's appointment and take half a day or a full day off.
00:16:35
Speaker
ask permission if you just don't feel like sitting in anybody's face today and you want to work from home on your computer rather than working in the office. And back then, i mean, now it's probably a little bit more lax with everything that was going on.
00:16:48
Speaker
But back when I was in corporate, um even though we had a computer, we were able to log in virtually. It was you weren't just working from home just because for because you didn't feel like coming in that day.
00:17:00
Speaker
ah You needed to get all of that approved. um So, you know, I got tired of of asking permission for those things. So I like the fact that I get to run my own life. If I want to go to Thailand next week for a week, I can figure that out on my own and I don't have to send it through three layers of approval so that somebody could tell me if I can go or not.
00:17:22
Speaker
That's awesome. I mean, that that freedom that comes with having your own business and making your own decisions and even paying the bills and hiring those that are a part of your team. It's all good stuff. So I can definitely identify with that.
00:17:34
Speaker
Now, when I think about your business and I want to pause because I want you to share on what you do and what your firm is all about.
Business in the Cannabis Industry
00:17:41
Speaker
If you wouldn't mind just going deeper and just sharing with the audience what your firm, your niche, I say it's a niche, um but I think it's something that's front and center for a lot of individuals nowadays for whatever the reason.
00:17:54
Speaker
So if you wouldn't mind sharing, would appreciate it. Absolutely. So about eight years ago, I found myself stumbling upon the U.S. legal cannabis industry.
00:18:06
Speaker
And so and I'm physically located in the state of Nevada. And back in 2017 was when Nevada went um live with adult use sales.
00:18:17
Speaker
And so I'm seeing cannabis all over the place, but at that time it was a very, so it was very small industry. Like cannabis first went legal in the United States in 2012 for adult use sales.
00:18:28
Speaker
um So the first couple of states went on board in 2012, and then it kind of picked up a little bit. By the time I learned about it in 2017, we only had about eight states in the whole country that had adult use laws where you can walk into a dispensary and buy cannabis.
00:18:44
Speaker
um And today, contrasting that with today, we have 26. um So it's grown back then in 2017, it was only like an $8 billion dollars market. Today, it's about a $30 billion dollars market.
00:18:57
Speaker
um So it's grown significantly over the the eight years that I've been in the industry, but this is the thing that I've been consistent with in my career. Like i you know I told you, I've kind of been to a couple of accounting firms and couple corporations.
00:19:14
Speaker
um but I've been consistent in the cannabis industry. And the reason is because every day i feel like I'm learning something new. um I get to build the community, the people that I'm around every day, the discussions that I have every day. I'm the one that gets to decide who I'm going to talk to each day and who I'm not going to talk to.
00:19:32
Speaker
um And I surround myself with interesting people, interesting topics, interesting conversations. And then I also, I've also organized my business in in the way where I'm able to do research and learn more about things that are interesting to me, even though, you know, there's always always those admin things and those other, you know, mundane tasks.
00:19:54
Speaker
um But still, for the most part, all the things that I do are things that are just interesting to me. So when I think about the cannabis business and I think about the la legalities of things and how, you from a regulatory perspective, you've got to be on your P's and Q's.
00:20:09
Speaker
I mean, what am I missing when I think about the risk? And i wouldn't even know how to onboard a client. Yeah. And I think that's probably a question that the audience may have. How do you go about managing through that risk and making sure that you're doing what you need to do from a legal and from a regulatory perspective?
00:20:29
Speaker
Yeah, so I get that question all the time. And when I first started in the cannabis industry, the first thing I do, like I've done always, is sought out a mentor and sought out help.
00:20:40
Speaker
um Found somebody who was already in the industry and just started asking questions. ah Started doing my own research and started looking into what was out there. And back then, there wasn't a lot. And so I mean, a lot of the stuff is starting to get out there. And that's part of it is is my doing. I've put a lot of education material out there.
00:20:58
Speaker
um But first getting educated. The next thing was learning. You know, we learn on the job. Everybody is learning this industry. And so I started working with clients, um asking questions and and networking with different people who handle different aspects, like talking to insurance providers and understanding what are the risks associated with my clients and all these things so that I can better understand that when my client comes to me with those questions.
00:21:23
Speaker
talking to attorneys in the industry and understanding what legal court cases and things they're going through so that I can better understand what's out there and what's going on in this industry, talking to investors and understanding what do they look for when they decide to invest in these companies.
00:21:38
Speaker
um And so just getting a ah better understanding of the industry. um But some of the risk, the the main underlining risk is that it's federally illegal and state legal.
00:21:50
Speaker
And that's the only industry in the country that's federally illegal and state legal. And a lot of people, it's hard to wrap your mind around what does that even mean? Because it's hard for us to understand.
00:22:01
Speaker
We don't have that. So it's hard to understand what what's managed by the federal government and what's not, you know, what's managed by the state government. um So what that looks like is when it comes to banking,
00:22:13
Speaker
A lot of the banks are on what's called international rails, credit rails. And so that means that you can use your debit card or you can go to a Chase in any state and deduct money or deposit money and it's going to it's going to work out. you can even It's even international you can use with credit cards. You can use your Visa card, your MasterCard, anywhere, and it's going to work because it's an international rails.
00:22:41
Speaker
So that's federal federally mandated. And so that's one of the reasons why cannabis businesses aren't able to get banking, because then now we're having cannabis money crossing federal lines, which is money laundering the definition of money money laundering so that's why we're seeing that banks aren't banking cannabis but we do see some of the state chartered banks and some of the credit unions are making cannabis well that's because they're able to manage it within state because cannabis is landlocked so the fact that it's federally illegal
00:23:19
Speaker
And state legal means it's landlocked. It's only the rules and regulations that has to be grown and sold within the state. And it doesn't matter if you are the state of California, which is legal, and the state of Nevada that's legal.
00:23:33
Speaker
You can't cross borders because that's federal grounds now. You can't cross, you can't go over the federal highways. You can't go through the federal airways. You can't go through the federal postal system.
00:23:45
Speaker
That's that that may That's what the federally illegal means. um and And if you think about it, like just think about any agricultural product. you know We have oranges, bananas, avocados and stuff.
00:23:59
Speaker
Imagine if all of the vegetables that you had in your state had to be grown and sold within your state, then you would be very limited to what types of fruits and vegetables you can eat. I'm in Nevada, so we wouldn't have anything um here in the desert.
00:24:16
Speaker
um But that's how cannabis is. And so when you're in, so like the state of Nevada, I have clients in the state of Nevada, and it's very expensive to put together grow facility to grow a plant in the middle of the desert.
00:24:30
Speaker
um You have to, you know, get the water a certain kind of way. And they have all these filtration systems and all these things going on. to get that water into a level where it can actually be fed to the plant.
00:24:44
Speaker
They have greenhouses to make sure that the climate and the environment is perfect. But then you hop over to Oregon and they just have outdoor grows and they use rainwater.
00:24:55
Speaker
And so there's a significant difference between how much it costs to grow that plant and then therefore how much you can sell the plant for as opposed to a grower in Nevada.
00:25:08
Speaker
um So there's some you know risk associated with that in in having it being landlocked. um so So, yeah, so those are some of the the main issues with it just being state legal.
00:25:20
Speaker
You know what I'm thinking about is that you definitely don't want to get into the cannabis of business unless you know what you're doing. and Okay. Is there anything, because I'm thinking about how is it different?
00:25:32
Speaker
Because you're in there and you're doing audits and you're doing financials. I mean, is it different in the way that they're accounting and making sure? Because I know, i knew, well, I know if I go back 10 years that that money wasn't crossing lines.
00:25:45
Speaker
Okay. And that was a big issue for a while. Because some states had a lot of money that they could not move about. But is there something, and I'm thinking about, you know, the gap and the other rules that come into play that is just applicable for that industry? Can you speak to what that might look like?
Compliance and Tax Challenges in Cannabis
00:26:05
Speaker
Yeah. So when it comes to the cannabis industry, it's highly regulated. So the first thing is you need to understand the rules and the regulations. And since it's state legal, the rules and regulations are state specific.
00:26:18
Speaker
So first of all, you need to understand, OK, I'm in you know X, Y, Z state. What are the cannabis rules and regulations for my state? who are the governing bodies for for my state?
00:26:29
Speaker
um And then you have to understand what are the you know fees, the excise taxes, the sales tax, is there a potency tax, is there a weight-based tax?
00:26:41
Speaker
There's so many different ways that they're taxed and it all depends on the state. um Another thing that you have to understand is cannabis is the only industry in the country that has a state mandated inventory system.
00:26:54
Speaker
So the states manage the inventory. It's not like you have your own QuickBooks or some other type of accounting system where you manage inventory and you account for it.
00:27:05
Speaker
the state is accounting for it and that's the source of truth for the state. And so the state has the numbers and it's part of their system. They may pull a report and walk into the dispensary or walk into the cultivator and say, hey, show me this.
00:27:18
Speaker
And so as the accountant, you need to make sure that you've been reconciling to the state records ah with for your client. You're making making sure that the reports are pulled, if there's any spoilage, if there's any shrinkage, If there's any damaged goods or products that need to come off, that it comes off and that you're always constantly reconciling to that to that system.
00:27:38
Speaker
um There's another another issue with the cannabis, which is this is like the number one thing that people talk about, but I don't think this is the primary issue when it comes to keeping a business's doors open.
00:27:50
Speaker
um But it is a big thing, which is called 280E taxes. And 280E is a tax code. It's one sentence in the tax code. And it was implemented back in the 80s, back in the 1980s, when um the government was trying to crack down the war on drugs that we had.
00:28:09
Speaker
um And they were trying to crack down and they realized that a lot of these drug dealers were, you know, they were filing taxes so they couldn't get them for tax evasion. um But they were filing taxes with, it's expensive to run an illegal business. It's expensive to be on the run. It's expensive to get a bunch of hotels in this state and that state and rental cars and all that stuff. So they were writing off all these expenses and they're like, I don't have any income to pay any taxes on.
00:28:34
Speaker
And so the government saw that and they implemented what's called 280E, which is a tax code that says no deductions are allowed for any operating expenses.
00:28:45
Speaker
If you are in the business of trafficking a schedule one or schedule two controlled substance within the meaning of the Controlled Substances Act. And so cannabis still falls as schedule one.
00:28:57
Speaker
within the meaning of controlled substance act, which is the most prohibited, like one is the highest five is the lowest in like, like number three is like Tylenol with codeine.
00:29:09
Speaker
Um, just so that you can understand, but number one is like cannabis and cocaine. I think fentanyl is on number two is even less prohibited than cannabis.
00:29:20
Speaker
Um, so. Wow. We've realized as a country that that's an issue. um The president, the former president, Biden, asked actually ah started the movement to reschedule it from one to schedule or just reschedule it. And then there was a it was recommended to move to to to schedule three, although the cannabis community feels like it needs to just be completely descheduled, taken off.
00:29:45
Speaker
just like alcohol, just like tobacco and taxed in in and governed the same way that alcohol and tobacco is governed. um But it's hard for, I mean, I don't think the the government is just going to admit that it needs to go from one to zero. um So we're looking at schedule three, um but that's still in the courts. That's still going and that's still sitting with the DEA. So we don't know where that's going to go.
00:30:09
Speaker
But because of schedule one, that means 280E applies. And because 280E applies, that means no deductions for any operating expenses. And so that means if you're running a dispensary, a retail um store, the only cost, you're paying taxes on grocery seats.
00:30:25
Speaker
And grocery seats is the difference between revenue and cost of goods sold. And cost of goods sold is defined by the cost to acquire the product. So really you're only writing off the wholesale price of that product.
00:30:40
Speaker
And then after cost goods sold is all of your operating expenses. So you have your payroll, you have your rent, you have your advertising, marketing, you have utilities, you have so many other things that you have to pay for.
00:30:54
Speaker
And even if, let's say you made a million dollars and then you had half a million dollars that cost the goods sold, and then you had half a million dollars of expenses, you're paying taxes still on half of this, they call it phantom income because you really you're paying taxes on money you don't really have because you use that to run your business.
00:31:13
Speaker
um And so it it makes the it makes this industry one of the highest tax industries in the in the country. And not only is it the highest tax industry by the federal government, it's federally illegal.
00:31:26
Speaker
So cannabis doesn't get to take advantage of any federal programs that their taxes are covering. So when we were in COVID, they couldn't be protected by bankruptcy laws.
00:31:37
Speaker
um So there's just a lot of, you know, a lot of things going on. um And it's it's just important to understand, you know, 280E, it's at the federal level, it's also at the state level. So you need to know what's happening between, you know, 280E within whichever state that your your client is operating in as well.
00:31:57
Speaker
You know, all that you've shared and i and I have one question, it's probably a very simple question. You may have answered it in some form. But when I think about inventory and I think about managing the flow of things in and out of the inventory, is there any way you can manipulate the system to make sure that other illegal Cannabis that hadn't been recorded is included in your inventory. I mean, is are there controls in place to help mitigate that? And how does that flow? I'm just curious because I'm an internal lot of gun. I'm thinking inventory and can they sneak it in? How would they know?
00:32:31
Speaker
And I'll tell you another reason why i bring it up because I was on vacation not too long ago and I was in a, oh my goodness, in the Caribbean and someone brought in a big box of stuff. Okay. And I don't know whether it was logged or whatever, but it went to the back room. And I know where I was. I was in a coffee shop, but it was different.
00:32:49
Speaker
This was a cannabis slash coffee shop equation. Don't ask me why. I know it well it was weird. But how is that tracked? Because right away, it's my my analytics and my audit brain was like, I wonder if that's something that's illegal that's going on. I just i just don't know. So what what are your thoughts when I mentioned? i know I said a lot, but what are your thoughts?
Growth and Economic Impact of Cannabis
00:33:11
Speaker
No, I totally get it. And here in the United States, it's very controlled. um So like, as I mentioned, cannabis is one of the highest um the regulate highly regulated industries like in the country.
00:33:23
Speaker
And so what happens is they have these state mandated, they call them seed to sale track and trace systems. So the moment you put the seeds in the ground, you it is tracked.
00:33:36
Speaker
And so what happens is you put the seeds in the ground, And let's say you have, um you you have ah ah I guess, I'm not sure what what it's called, but a bunch of seeds and one little plate. um There's a tag assigned to that.
00:33:50
Speaker
And then as those, well, I think once they become like seedlings, don't don't quote me on this. I don't know exactly how how it works, um but it's been it's been explained to me once before. Once they become like seedlings and they're long enough and they're viable,
00:34:04
Speaker
then there there's a tag assigned to it and there's a number assigned to it. um And then as they're growing and as they're split up and things that those tags follow them. And then even once they be they go and they're harvested and they're dried um and they're transported, those tags are still with the dried product.
00:34:24
Speaker
And then from the cultivator, then it's transferred to the reseller. And there's several different reseller licenses. but let's just say there's only two, a cultivator and then a dispensary. um It's transferred within the seed to sell track and trace system. So if my if the cultivator has sold me um five pounds of product in the seed to sell track and trace system, it will transfer from that cultivator's business ID number to the dispensary's business ID number. And now those tags are still attached to those products and they're now in my store in the dispensary. And then once I sell them through the POS system, those it's still attached to those products so that it knows that it was finally sold to an end user.
00:35:07
Speaker
um One good thing about that is we're dealing with a medical product. So if there needs to be any type of recall or anything like that, we We have access, we know exactly where it went, um but then we also see it going through that entire system. And so there's no um interfering with that process.
00:35:26
Speaker
If anything um needs to be damaged, and also not only do they have the seed to sell track and trace system with the tags, um but a lot of states have require cameras that the states can log into and see what's going on inside of your facility.
00:35:42
Speaker
And so they tap into those cameras and and it's really locked down in the state of Nevada. They tap into those cameras and they're able to see if you brought in a box and put it in the back and tried anything like that.
00:35:53
Speaker
And not only that, these products are also lab tested. They're laboratory tested so that we can know exactly how much THC, how much CBD, the terpines, you know, we know exactly what's in the product that we're consuming, which is a good thing. And that's kind of why we want a legitimate legal business so that we can know what we're putting into our body.
00:36:14
Speaker
um But they're they're laboratory tested and then that's reported and attached with the tag number. And then if something were to come up and any product had to be destroyed, the product has to be destroyed in front of the camera.
00:36:28
Speaker
So it's not like you put it out the back door to the to the illicit market. You put Clorox over that product and you destroy it in front of the the camera and they have a whole system um that you you show that you've actually really destroyed that product. And even then, here in Nevada, they have to Clorox every single product and put it in a bin that's locked.
00:36:51
Speaker
People still break into those bins and get that product and try to sell it within the illicit market. Yeah. Yeah, but there's no slipping through the cracks. and so That's a good thing.
00:37:03
Speaker
You know, when I think about the the trajectory of this industry, OK, and I think about, you know, opportunity. yeah What are you seeing? What do you think is happening? And is this on the right trajectory? Because I know there's rules and regs in place and you know the accounting. It seems like it's very complicated.
00:37:22
Speaker
you i don't know why anyone would want to be in it, because I think at the very beginning, I think everyone could see the opportunity. I know that's a tremendous opportunity. I know it's a growth area um for this country and others.
00:37:34
Speaker
So, I mean, what do you think is ah the actual trajectory of the industry as a whole? Because I know you're tied to your link to and you've been in it for a while and you wanted to keep on that trajectory. But what are your thoughts?
00:37:48
Speaker
OK, so it's definitely here to stay. It's not going anywhere. It was happening prior to legalization and it will continue to happen after if legalization were to go away. So I think the country, the ah governmental bodies are aware and awake that whether we legalize this or not, it's still going on within our state.
00:38:09
Speaker
ah We did notice during COVID that it became and it went from illegal to essential. um And so it was an essential product. So the cannabis operators were able to keep their doors open while the rest of the operators, restaurants and stores within the states had to close their doors.
00:38:28
Speaker
um And so we still were able to earn tax dollars, state tax dollars through this and this industry. And you know it was deemed essential during a global pandemic. So that gives me um the ah makes me feel like it does have some staying power.
00:38:43
Speaker
ah So I don't feel like it's going anywhere. And not only that, I feel like it's actually growing. I actually just saw some stats recently that so for every dollar spent, I know this has been a stat since I since i began.
00:38:57
Speaker
So every dollar spent in a dispensary adds about two and a half dollars to our economy. And and the way the reason for that is because it costs money to operate a store. You have to pay payroll.
00:39:11
Speaker
You have to pay rent. You have to find real estate. You pay taxes. You need marketing. You need market photography. You need an attorney. You need an accountant. There's so many other supportive, ancillary like we call them ancillary businesses.
00:39:25
Speaker
that support this industry. So for every dollar that's generated, it creates ah two and a half more dollars into the economy. um But the most recent stat that I saw said that it's about a $33 billion dollars industry, and it's created $123 billion dollars in economic impact um in our country this year.
00:39:46
Speaker
And it's anticipated to get to $200 billion dollars of economic impact in like the next um four to five years. um So it's it's just only only growing. And if you think about it, and this is what I like to equate it to when you think about when the car was first created,
00:40:03
Speaker
you know, we have this new mobilele automobile, which we can get places further. Well, first of all, now we need roads in order to drive this automobile on. So now we have this huge industry where we're creating roads all over and construction all over the country. And then if you're going on a long long road trip, you need a place to stop and stay. So now we have this huge motel industry that's created because a car was created.
00:40:28
Speaker
um And then you also need to get gas. And so now we have this huge oil, multi-billion dollar oil industry created on the back of just a car being created.
00:40:39
Speaker
And then you have steel industry. You have the rubber industry for the tires on that car. You have a leather industry for the seats and the leather inside those cars. You have the engines and all the materials that go into just creating a car.
00:40:54
Speaker
And I feel like the same thing is happening in the cannabis industry. We've created a new industry, but you need a lot of support in order to make that industry viable. um And so that's why I'm seeing from on the rooftops that if you do wanna get the industry, start as an ancillary,
00:41:13
Speaker
If you're an accountant, start as an accountant. Don't just say, oh, well, I have to become a grower. I have to open a dispensary in order to be a part of the industry. um as they As they say, you know not every miner struck gold, but every single one needed a shovel.
00:41:30
Speaker
And so you need that support in order to you know get to the to the riches. And so there's opportunities for a lot of different industries to to grow out of this one industry.
00:41:41
Speaker
You know, when I think about all that you mentioned and I think about because we were talking about what path that I need to take if I'm going into accountancy. And, you there's so many things that you can do. There's so many pluses.
00:41:56
Speaker
And I, you know, when have someone like you on a show and I started thinking about the takeaways. that someone needs from this particular experience and listening to you.
00:42:07
Speaker
i mean, what do you want to share? What are those two or three things that you want to share with the audience just to to help them understand? I mean, you've shared a lot. You've said, OK, if you're not doing this, there's something wrong. That's what I hear, because it seems like it's a it's a market that's headed in the right direction. It seems like you know it's not going to slow down. But what's those other takeaways? Because someone doesn't go from public accounting to being an entrepreneur and all these other things, there's a lot that you're going through and you're thinking about and you're doing the right balance.
Embracing Discomfort and Challenges
00:42:40
Speaker
And what I mean by balance of you know personal and professional. So what are what are your key takeaways um that you want to leave with this particular audience?
00:42:52
Speaker
um One of the things and one of the best of business advice that I got while I was still in corporate America and from the owner of the company that I worked with, we would have our corporate meetings and he would always say, get comfortable being uncomfortable.
00:43:10
Speaker
And that's always stuck with me. And that also was part of the reason why I made the decision to leave the firm. um was like, I'm way too comfortable here. It's time for me to get uncomfortable.
00:43:21
Speaker
um So every day i'm doing something like even this interview. I mean, I've done a lot of interviews. but I'm introverted. So going into it, I was a little nervous. I was thinking, oh my gosh, am I going to say something wrong? Is he going to ask me a question that I don't know what to say? like That's always, no matter how much you do it, that's always going to come up.
00:43:42
Speaker
And if it stops stop coming up, then maybe do something different that challenges you. um And so that's why I've been in this industry so long, because every single day it continues to challenge me.
00:43:53
Speaker
There's something new coming out every single day. And that's something that I i enjoy doing. So um I like to stay in that um that zone of of being comfortable ah being uncomfortable.
00:44:05
Speaker
yeah I'm going
Specialized Training for Cannabis Accountants
00:44:06
Speaker
to ask one more question. Normally, I try and wrap it with that. But is there a certification, any unique certification that goes along with the business? I'm just curious. And maybe you can speak.
00:44:17
Speaker
I actually offer a certification within my business for accountants who want to start. So I do training and education. I've worked with over 700 accountants across the country over the last eight years um to help them.
00:44:30
Speaker
We don't teach you how to be an accountant. We teach you how to transition your existing. So you need to have at least, you know, two years of experience doing accounting and understand debits and credits and all those things.
00:44:41
Speaker
um So we help you transition your existing skillset into this industry so that you can understand what to do if you want to service clients in this industry. Fantastic.
00:44:52
Speaker
You know, this has been a pleasure. You talk about learn. I've been learning all day and listening to you and understanding your background and how you've been successful in the business. And there's just so much opportunity out there. I think right now everyone's centered on AI.
00:45:08
Speaker
And AI is going to impact this business. It will. But you've got find at its core, the business is not going anywhere. And you've got to align yourself with that business and continue to capitalize on those opportunities that are in front of you. So it's been fantastic. Can you be on the show? You're coming back.
00:45:25
Speaker
I know you are. Yeah, I'll be back. Conversation that we have. And the reason I say that, because there's other things that are going on that I think that you can share as it relates to the profession.
Opportunities in Entrepreneurship
00:45:36
Speaker
and just graduate folks as to what those steps look like to truly be successful. and okay I just wanted to know some stuff about the risk. That's why I asked about inventory and all these other things. But um that's just my curiosity. But I know that there are others out there that are curious about the business side of things and how they can lay the right foundation for success for themselves. So thank you for being a part of today's conversation.
00:46:00
Speaker
Thank you so much for having me. all right, I'm going to take a moment just to say this to the audience. There's incredible amount of opportunity out there. Don't be afraid. Don't be afraid to take risk. Don't be afraid to leave an organization. Now, wait a minute. Make sure you're trained.
00:46:15
Speaker
Make sure you're comfortable. Make sure you you are a good manager. But as an entrepreneur, it exposes you to so much more. So don't be afraid to dive into something that is completely different than what you've done.
00:46:30
Speaker
ah You won't know until you arrive. And when you arrive in whatever situation that is, believe me, it'll feel different. It may be a little scary, but I promise you it'll be a plus. No matter what happens at the end of the day, it will be a plus for you.
00:46:45
Speaker
I want to thank you for being a part of today's conversation. And don't forget, check out the link below if you need CPE, because we definitely want to be able to serve that up in the right dose for you.
00:46:56
Speaker
So endure the rest of