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

October 30, 2024/Volume 1, Issue 1

Hemp’s in trouble, but Harris boards the “legalize it” train. Is AI coming to help our growers? A deadly shooting at a dispensary. Here we answer some questions that haven’t been frequently asked (but should be).

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Cannabis in Los Angeles and Beyond

Stoner icons Cheech and Chong (among others) may have seen their hemp plans go up in smoke after a Los Angeles judge shot down a temporary restraining order. The order pertained to a ban restricting hemp in food products with detectable THC levels. Read more.

Nebraskan Cannabis fans may have to wait until after the election to see their state’s ruling on two cannabis ballot measures. Read more.

A Bean Town-based start-up is developing a hydroponic growing device that uses AI to cut down on all the work humans normally pour into cannabis cultivation. Read more.

Delaware is moving forward with plans to issue recreational cannabis sales in March in a state lottery. Read more.

Republican presidential candidate Donald Trump has voiced support for the rescheduling of cannabis from a Schedule 1 to a Schedule 3 list controlled substance and has indicated that recreational use should remain determined by each state (10th Amendment).

Democrat presidential candidate Kamala Harris has stated, on the other hand, that she would support full descheduling, full federal legalization of cannabis use.

However you feel about the presidential candidates, if you feel something for cannabis, do that thing that millions don’t, but so many marched and fought for (read: vote).

Got Tax?

FinCEN / Beneficial Ownership Information (BOI)

The U.S. Department of Treasury and FinCEN want to know everyone “who directly or indirectly owns or controls a company,” (which applies to cannabis companies). This applies to anyone who owns at least a quarter (25% or more) of a business. The terms were announced on October 16. Read more.

Internal Revenue Service Updates

We know taxes aren’t the sexiest thing to read about. But unless you want to go the way of Al Capone (the tax problems, not the syphilis) then staying abreast of tax news is in your best interest, especially if you own a cannabis business.

It seemed like 2024 was the year for cannabis rescheduling. The DEA appeared open for a common period in July. But instead of leaving the station, the train stalled in its tracks.

So, for the upcoming year, all cannabis-related companies (at the federal level) will operate just like they did in 2024.

Year-End Planning

It’s that time of year. Several cultural milestones are upon us. Halloween. Thanksgiving. Christmas. And Tax Season. 2025 is around the corner, and it’s time to take some important steps. See below for how you can protect yourself.

  1. Project net taxable income to the end of the year.
  2. Project the cash position of the company (if you have one) at the end of the year.
  3. Project income taxes for the year.
  4. Develop a “hit list” of things that may be used to reduce the taxes for the year.
    Examples may include:

    • Purchase equipment that may be new or used.
    • Pay bonuses to employees.
    • Pay expenses a month or two ahead of the due date.
  5. Consider what expenses or costs are contemplated: some may not reduce net income. An example is buying more inventory which adds to the company’s assets but does not reduce taxable income.
  6. Determine how much cash you want to use to reduce income taxes.
Attendees at a Weed Conference

Upcoming Events

This month has already seen several important cannabis events come and go, but several more are ahead.

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: San Diego Region – October 30th.

MJBizCon

The 13th annual MJBizCon is coming to Las Vegas, December 3-6. Cannabis professionals from all aspects of the industry will be present for forums, exhibits, and conferences.

Hopefully, we’ll see you there as we’re attending both the pre-show associations day and the Vegas conference.

The Situation Report

An L.A. dispensary saw one person killed and one injured after a disagreement with a third party turned violent. Read more.

17 individuals in Baltimore, Maryland were indicted for money laundering and allegedly possessing 2,000 pounds of cannabis. Read more.

Curaleaf International, a medical cannabis company, is demanding the U.K. crackdown on illegal online sales of cannabis. Read more.

A group of New Mexico cannabis businesses has filed a lawsuit against U.S. Customs and Border Protection (CBP), claiming the CBP has been unconstitutionally seizing cannabis products and illegally detaining employees. Read more.

Similarly, some Texas hemp businesses are suing the DEA in Allen, Texas, for what they are saying was an illegal raid, which included putting a 70-year-old man in shackles for two days. Read more.

In San Francisco, two burglars broke into a dispensary with sledgehammers and pry bars. The shop owner, Duncan Ley, says his dispensary has been targeted multiple times since opening in 2021. Read more.

Multiple people in Stoughton, Wisconsin, presumably got decently baked when the pizzeria they visited accidentally served them THC-infused pizza. From Monday October 21 to October 24, pizza was served with THC in it. Read more.

Industry Insight

“Artificial Intelligence and Cannabis are dually burgeoning industries, that, when combined, will behold the most transformative and profitable business opportunities in modern history. Those who are aware of this wave that is coming, and possess the foresight to prepare and the experience to execute, should consider it a disservice to their own legacy if they don’t have their entire arms deep into this technology. Waiting to adapt in a market saturated with misinformation and dying from a lack of accountability holds their fate: this will be the difference between profitability and receivership in 2025.” – Beth Myers, CEO CannManage.ai

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.