The Newsletter’s Aim

Weeding the News – a breakdown of the month’s cannabis news, important events, and top-notch accounting tips – aims to entertain and inform you as we watch the cannabis industry transform before us.

What’s on the Docket

January 16, 2025 / Volume 1, Issue 3

America’s lawmakers can’t make up their minds about cannabis laws (even ones that have seemingly already been approved). Two New York men chose a fatal cannabis fertilizer. And we give KPIs for storefront businesses.

BTA Cannabis CPA Tax logo small

Cannabis in Los Angeles and Beyond

Missouri lawmakers are still hemming and hawing over-regulation concerning hemp products in their state as a series of new bills seek to determine appropriate THC levels and sales stipulations. Read more.

Massachusetts is also going back and forth, debating issues on lounges and event venues. Read more.

Meanwhile, Nebraska may be having a change of heart on election results that legalized cannabis in their state. Read more.

West Virginia is also playing tough love regarding cannabis as their supreme Court upheld a judge’s rule saying the state can refuse to sell medical cannabis to someone on probation, “thanks” to a recent case. Read more.

At least Ohio citizens have caught a break, a bill seeking to outlaw intoxicating hemp products did not make it to the governor’s desk before the legislative session ended. Read more.

However, these same citizens may see less of cannabis as lawmakers have proposed a ban on cannabis advertising. Read more.

As Cannabis sales rake in billions, pulling in record numbers from Michigan to Massachusetts, it’s being reported that cannabis use among teenagers is actually declining. Read more.

The people of Pennsylvania and Wisconsin have reason for hope for cannabis as lawmakers seek to legalize/decriminalize our favorite plant in 2025. Read more.

Cansortium has completed its merger with RIV Capital, establishing an operator that has dozens of dispensaries in four states. Read more.

In California, a proposed bill could pave the way for products with set limits of THC to be legal. Read more.

Californians are also seeing the cannabis industry coming out in force to help with relief efforts concerning the devastating fires that have ravaged the Los Angeles area. Read more.

Got Tax?

FinCEN / Beneficial Ownership Information (BOI)

The Corporate Transparency Act (CTA) is a federal law enacted in 2021 to combat money laundering, terrorist financing, and other illicit activities by requiring certain business entities to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). The law was set to take effect on January 1, 2024, with existing companies required to file their initial reports by January 1, 2025.

However, the implementation of the CTA has faced significant legal challenges:

  1. On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction, halting the enforcement of the CTA.
  2. On December 23, 2024, a 5th Circuit Court of Appeals motions panel granted the government’s emergency motion to stay the injunction, effectively reinstating the CTA.
  3. On December 26, 2024, a merits panel of the 5th Circuit vacated the stay, once again suspending the CTA’s enforcement.
  4. On December 31, 2024, the Department of Justice filed an emergency application with the Supreme Court, seeking to lift the injunction.
  5. On January 3, 2025, Justice Samuel Alito requested a response from the plaintiffs by January 10, 2025.

The 5th Circuit has scheduled an expedited appeal process:

  • Government’s opening brief due: February 7, 2025
  • Appellees’ brief due: February 21, 2025
  • Government’s reply due: February 28, 2025
  • Oral arguments scheduled for: March 25, 2025

Of note: the 4th Circuit has not been directly involved in the recent legal battles over the CTA. The focus has primarily been on the 5th Circuit and the potential Supreme Court intervention.

As of January 14, 2025, the nationwide injunction remains in effect, and reporting companies are not currently required to file beneficial ownership information with FinCEN. However, the situation remains fluid, and affected entities should stay informed about potential changes in the CTA’s status.

Upcoming Events

The Cannabis Chamber of Commerce

The Cannabis Chamber of Commerce, an association dedicated to helping members throughout the U.S. network with expos, forums, job fairs, and other experiences, will host events throughout California.

Los Angeles Monthly Networking Mixer on – Jan 23rd

2025 Virginia Cannabis Conference & Lobby Day

The 2025 Virginia Cannabis Conference & Lobby Day brings experts from various aspects of the cannabis industry to discuss the future of cannabis legislation in Virginia.

Jan 24th to Jan 27th

Total Product Expo 2025

An expo that features an abundance of cannabis products, from vapes to apparel that are at the forefront of cannabis innovation.

Jan 29th to Jan 31st

Hawaii Cannabis Expo

The 8th annual Hawaii Cannabis Expo features seminars and networking opportunities for cannabis professionals.

Jan 31st to Feb 2nd

The Situation Report

San Bernardino authorities seized more than 90,000 pounds of cannabis worth an estimated $100 million dollars from a five-acre ranch in Hesperia. Two days and 51 truckloads were required to remove all the cannabis from the property. Read more.

Two sisters in Los Angeles have filed a lawsuit against a Los Angeles cannabis brand, alleging the company did not sufficiently notify them of how strong the brand’s cannabis products were, which, according to them, has led to cannabis-induced psychosis. Read more.

Two men in New York learned the hard way that bat feces makes a terrible (indoor) cannabis fertilizer. Both men died after developing a fungal lung infection called Histoplasma capsulatum after their home-growing attempts went awry. Read more.

A Pennsylvania couple is being charged with child endangerment after their nine-month-old child was hospitalized for what police allege was the consumption of a cannabis gummy. Read more.

New information has emerged in a San Diego case involving the murder of seven people and the seizure of over 1,000 pounds of cannabis. Authorities say it was a focused attack on Laotian gang members. Read more.

Abroad

Japan has tightened its cannabis laws, following what they say is an uptick in cannabis consumption among the country’s adolescent population. Violators of the laws now face up to seven years in prison whereas previously there was no penalty for cannabis consumption. Read more.

A raid on a fish meal factory in Morocco turned up 3.6 tons of cannabis bound for Belgium. Read more.

Nigerian officials have arrested six people allegedly smuggling cocaine, amphetamine, opioids, and “loud” cannabis (a highly potent form of the plant) from Canada to Nigeria. Read more.

Industry Insight: KPIs for a Retail Storefront Operation

The following is a series of key performance indicators for a retail brick-and-mortar operation. The top 10 KPIs are categorized under operations and sales-oriented indicators.

10 Operation KPIs to Consider for a Retail Cannabis Storefront Operation

(Inventory + Material Purchases + Other Direct Costs)
  • Indicative of Gross Profit, which ideally is a “keystone,” or a full 100% markup. A keystone is typically what mainstream retailers want to have as a markup over wholesale, more realistically the percentage will sit around 45-55% in this industry.

  • Indicative of retail staffing, the more sales associates and fewer managers, the more agile and high-performing the staff.

  • Indicative of your top budtenders’ sales by dollar amount, summary, typically by week or by month.

  • Indicative of your top budtender’s average basket/ticket amount, summarize by week or by month, by budtender.

  • Indicative of maximized efficiency of the sales floor with vertical shelving, end-caps, displays, and or stands.

  • Indicative of shelf contracts signed for shelf space in contrast to the active sales of units of product.

  • Indicative of how long it takes for a highly regulated and monitored activity, with no room for error. This takes staff off of sales duties and is mandatory for start of shift, end of shift, start of day, and end of day.

  • Indicative of sales volume by visitor metric, valuable in determining traffic to the store. Managers can make decisions on outbound marketing campaigns or have pulse-promotion sales activities scheduled.

  • Indicative of the time to turn over/around a customer, valuable for calculating min and max customer bandwidth.

  • Indicative of your best patrons, by average dollar amount per basket by customer.

*Make sure you are on top of your KPIs, regardless of industry vertical.*

Much-Needed FAQs

Instead of answering questions that have been asked all the time, we offer a few questions that should be asked. If asked, the questions would save you a lot of time and trouble. Trust us.

A: To obtain a copy of your IRS transcripts, you have several options (that will cost nothing, too).

  1. Online: Visit the IRS website (www.irs.gov) and use the “Get Transcript” tool. You can view and download your transcript immediately after verifying your identity.
  2. Phone: Call the IRS automated phone transcript service at 800-908-9946 to request a transcript be mailed to you.
  3. Mail: Complete and submit Form 4506-T or Form 4506T-EZ to request a transcript by mail.
  4. Mobile App: Use the IRS2Go phone app to order a transcript.

A: With our recent activities, audits, and involvement with the IRS / BSA audits, we’ve determined that the IRS / BSA is interested in the cannabis industry.

Effective January 1st, 2024, generally, all 8300 filings must be electronic. Additionally, be aware that there are special year-end considerations for reporting 8300s issued during the year.