Facebook Advertising Dings Cannabis Regulators

Facebook Advertising Dings Cannabis Regulators

Facebook Advertising Dings Cannabis Regulators – no misprint there, Facebook bounced one of our ads asserting that it promotes the use of illegal drugs. Let’ see the ad and their comments:

Facebook Advertising Dings Cannabis Regulators
Yep…those are the logos for the California Cannabis Regulatory Agencies.

 

To illustrate the agency pages:

Facebook Advertising Dings Cannabis Regulators
California Bureau of Cannabis Control
Facebook Advertising Dings Cannabis Regulators
California Dept. of Food & Agriculture – CalCannabis

Facebook Advertising Dings Cannabis Regulators

Facebook Advertising Dings Cannabis Regulators
California Dept. of Public Health

 

 

 

Also, the State of California Agencies openly displays that they are open and seeking to engage with the commercial cannabis industry in California. Let’s begin with the Secretary of State’s cannabizfile page.

Facebook Advertising Dings Cannabis Regulators
California Secretary of State’s Cannabizfile Portal

 

 

 

 

 

 

Then we move to the State of California’s CannaBusiness Portal.

Facebook Advertising Dings Cannabis Regulators
State of California Cannabis Portal
Secretary of State Alex Padilla announced today that for the first time, Californians could form their Limited Liability Company (LLC) online through bizfile California,

the agency’s online business filing and search portal. Secretary Padilla also announced Eureka, a new artificial intelligence search assistant, known in the information technology world as a “chatbot,” to help customers easily navigate business resources on the Secretary of State’s website.“The days of only being able to form an LLC in-person at the Secretary of State’s office, or by mail are history with our new, easy online filing option,” said Secretary of State Alex Padilla. “Now, businesses can submit LLC formation documents, submit LLC Statements of Information, or file a trademark or service mark application all online from the convenience of their laptop, tablet or smartphone.”

Over the last five years, LLCs have been the fastest growing entity type registered in California, with nearly 120,000 LLC Formation filings in the 2016-17 fiscal year alone. The new LLC Formation tool was designed and implemented in collaboration with staff from the Secretary of State’s office and the ThinkSmart LLC Platform.

“ThinkSmart is proud to power the LLC Formations online process,” said Troy Bare, VP of Sales, ThinkSmart LLC. “The core values of our technology focus on streamlining processes for the government through automation with the ultimate goal of making it easier than ever to do business in California.”

The Secretary of State’s new chatbot Eureka developed in partnership with Microsoft. It answers frequently asked business entity and trademark questions. Customers can ask a question such as “How do I get a copy of a filed document?” and Eureka will link them to the California Business Search website where they can look up their business record and access documents for free. Eureka responds best to short questions or keywords. The California Secretary of State is the first state-level Department or Agency to use Microsoft’s Artificial Intelligence and bot services to modernize and create efficiencies when providing services to customers.

BioTrack THC – Think Private Blockchain

BioTrack THC – Think Private Blockchain

BioTrack THC – Think Private Blockchain – Patrick Vo – CEO either doesn’t understand how blockchain works, or worse yet deliberately offered misinformation in an article published by Benzinga Pro that you can find here.

 

Our view of the situation is that assuming that the long-term scenario is that cannabis is going to come off of Schedule I and that there will ultimately be inter-state transactions involving marijuana. If the individual states were to maintain vastly different laws governing cannabis within their borders, the issuance of BNDD licenses is going to have to come from a single source. Two examples of this would be the IRS’s issuance of Taxpayer Identification Numbers are centrally issued but used by the entire United States or a specialized issuer such as the current Drug Enforcement Administration [“DEA”]. The DEA’s functions in addition to the commonly perceived law enforcement role include the functionality of its predecessor referred to as the Bureau of Narcotics and Dangerous Drugs “BNDD”.

The functionality of the BNDD currently resides within the DEA’s Diversion Control Division [“DCD”]. The DCD coordinates the gathering of documents an matching of state licenses for practitioners [including MD, DO, DDS, DMD, DVM, DPM], mid-level practitioners [including NP, PA, OD, etc.], pharmacists and all allied business entities as a single “choke point”. DCD is the sole logical issuer of choice to take over Cannabis licensing and it is responsible for every single other controlled substance in the United States.

Either DEA is going to have to remove cannabis from Schedule I, or Congress is going to have to take the step before that kind of a change takes place. There is no practical state level option to accomplish the same task. The choice of DCD would also address the single issuer concerns with private blockchain.  Everyone is going to have to play adult for this to work.

BioTrack THC - Think Private Blockchain
BioTrack CEO Botches Blockchain Discussion

We wish that BioTrack THC would get its act together.

 

Let’s talk…we can help.

Directory Sites Need Credential Validation

Directory Sites Need Credential Validation

Directory Sites Need Credential Validation – If you know us well, you will instantly recognize this post as the culmination of a recurring theme. It is truly unfortunate that the topic continues to be an issue given the proliferation of digital tools that can address the problem. Specifically, any website that contains a “directory” or list of credentialed “professionals” whose credentials or licenses that does not verify them before listing the individuals or firms before listing them not only does its members/users a tremendous disservice but undercuts its own public credibility.

We are not going to regurgitate the details of tools available for verifying certified public accountants “CPA’s, attorneys, Enrolled Agents “EA’s and every other type of finance or investment professional you can think of.

If our tools don’t have what you are looking for, the FINRA BrokerCheck page has a very comprehensive list. We have invested significant time in developing additional resources to compliment these basic tools including:

Regulation CPAs Accountants Tax Pros – which details the universe of regulation of tax practitioners.

Confidence Levels Tax Reporting Positions – details the hierarchy of authority within federal tax practice in the United States.

Tax Practice Professional Ethics – covers the professional standards for tax practitioners and AICPA members in the United States.

State Board of Accountancy Guidance for CPA’s Serving the Cannabis Industry – covers exactly what you would expect it to.

California Cannabis License Look Up

Bureau of Cannabis Control [“BCC”]

California Dept. of Public Health [“CDPH” – Manufactured Cannabis Safety Board [“MCSB”]

California Dept. of Food and Agriculture [“CDFA”] – CalCannabis – Cultivation

Examples of Varied Degrees of Disclosure and Validation

Excellent – player to be named

Trying But Could Do Better – Taxlinked.net 

Bottom of the Barrel – Actively Encourages Dishonest & Incompetent Practitioner Listings – James Kaufman and x-cannabis.com

You can learn more about related concepts on our sister sites

aBIZinaBOX Inc – Our Main CPA Practice Site

California Cannabis Chek

 

 

Commercial Cannabis Document Suite – CCDS

Commercial Cannabis Document Suite – CCDS

Commercial Cannabis Document Suite – CCDS was released in Beta today. We are providing a preview of a something that has been in development for close to a year. If you or a business you work with is involved in the commercial cannabis industry in California the changes the game. [At this time, we no intention of expanding development for jurisdictions outside of California [the complexity of compliance requirements are difficult to comprehend].

We have developed a Commercial Cannabis Distribution Suite [“CCDS”] which is fully compliant with California Regulatory Agency [ Bureau of Cannabis Control [“BCC”], Dept. of Public Health – Manufactured Cannabis Safety Board [“CDPH”], Dept. of Agriculture – CalCannabis Cultivation Unit [“CDFA”], Department of Tax and Fee Administration [“CDTFA”].

CCDS will have full integration with Google Cloud’s G Suite for Email, Contacts, Documents, Drive and Sheets, Microsoft Office 365’s Outlook, Word and Excel, Intuit QuickBooks Online, Xero Cloud Accounting, Slack and Adobe Acrobat – each coming online starting 2Q – 4Q 2018.

We are looking at integration with Fishbowl Inventory/Manufacturing and Franwell’s METRC.

If you are interested in the platform, please contact us to be added to our list.

Commercial Cannabis Document Suite

If you would like more information, a demo or to be invited to participate in the Beta, please fill out the requested Contact Information below.

While you are here why not visit us on Facebook, or check out our CPA Services for the California Commercial Cannabis industry.

Our California Cannabis Experience

CCCBRC

Prepackaged Cannabis Business Plan – Just No

Prepackaged Cannabis Business Plan – Just No

Prepackaged Cannabis Business Plan – Just No is a discussion of the first thing that you DON’T want to do when considering investment in a cannabis business.

We started a series about what to look for in a cannabis advisor last week in California Cannabis Biz Check – Consultants. We began by explaining why you need an attorney and a CPA [more on why a CPA and not an EA in the next post.  Then we explained why we believe it is important that a commercial cannabis business which is located in California have attorneys and CPA’s who are licensed in and pay taxes to California. Then we discussed required withholding on payments to contractors who are non-residents of California.

Prepackaged Cannabis Business Plan - Just No
Stinky EA and Smelly EA

We explained why a CPA should be the professional of choice, and pointed out numerous reasons why, in general, an Enrolled Agent is a poor choice [we noted that there are very rare exceptions to the statement, but they do exist.] Then we should the headquarters of our hypothetical shitty advisors, Smelly & Stinky EA’s. Now, we introduce Stinky EA and Smelly EA to help us continue the discussion. Our discussion continues with a discussion of a group that you should be VERY WARY of they specialize in making words, numbers, and documents look “pretty without understanding what they mean. They would be the purveyors of templates [which is ok if that is what you need and you understand what they are]. When they start offering complete “Business Plans”, “Licensing Packages” or “Business Valuations” we suggest that you RUN LIKE HELL in the opposite direction.

The reason why we say that is that after telling you about everything they are providing you with as an incredible deal, in the next breath, they tell you that they aren’t responsible for anything, and they are not attorneys, CPA’s, financial or tax planners or advisors. Hmm…so what are they besides sellers of “snake oil”.  At least Stinky EA and Smelly EA had to pass a test to hang a shingle. The paragraphs that follow are a sample of the “horseshit” we found on the sites we looked at.

Brand A

We Are Not Financial Advisors – We provide information designed to educate and inform entrepreneurs. We and our Products are not intended to provide legal, tax or financial advice. We are not financial planners, brokers or tax advisers.

Followed by – Complete and professional cannabis business plans, including pro forma financials and projections to help you know how much money it’ll cost to start your business and how much money you can make by starting and operating your 100% legally compliant medical or recreational cannabis business.

Brand B

Record Keeping & Taxes – How to maintain the required records for licensing, auditing & tax purposes. As well as the details about your tax liabilities for your business type and what you can expect to pay in taxes.

Accounting & Tax Mitigation – We can help with suggestions for common accounting practices (GAAP) as well as the regulations that must be met in order to be in total compliance. Since we’re not specialists in this capacity, we urge our clients to seek professional accountants or lean on us for recommendations

We are not a law firm, and the employees of We are not acting as your attorney. Our consulting services are not a substitute for the advice of an attorney.

We are not permitted to engage in the practice of law. This site is not intended to create an attorney-client relationship, and by using us no attorney-client relationship will be created with us. Instead, you are representing yourself in any legal matter you undertake through our services. Accordingly, while communications between you and We are protected by Privacy Policy, they are not protected by the attorney-client privilege or work product doctrine.

Brand C

At this stage, you mainly need a location, a business plan, and to collect all of the required documents to submit for your license. It’s up to you to pick a location and learn the regulations and application requirements for that municipality. Once you do that, come to us for operating plan templates. Most clients prefer not to pay an attorney or CPA >$25,000 to create all of their application materials.  The smart DYI cannabis entrepreneur can save over $10,000 working from templates and having an attorney review everything before submission.

Our next post will start getting into some of the underlying assumptions contained is business plans and what to look for. Remember you can check the license of a California attorney here and a CPA here.

Prepackaged Cannabis Business Plan – Just No

 

California Cannabis Biz – Check Consultants

California Cannabis Biz – Check Consultants

California Cannabis Biz – Check Consultants is our small effort to make sure that any of the advisors that you might be using in your business play by similar rules that the State of California is asking you to accept. Let’s face it, the price you are paying to be a participant in the legal cannabis industry in California is HUGE! Do you think it is unfair is some growers, extractors, distributors or dispensaries don’t play by the rules and there aren’t any consequences? We would be mad as hell about it! 

Our firm is licensed in California, I am licensed as a CPA in California, our firm practices in California thru an entity which is incorporated in

California Cannabis Biz - Check Consultants
aBIZinazBOX Cannabis Practice Group

California.  The rules that apply to the practice of public accountancy in California can be found here. The firm’s entity and I personally are California taxpayers on the income we earn in California.

The State of California Franchise Tax Board [“FTB”] has very specific rules that apply to payments to nonresidents of California. If you have questions or concerns about those rules, you can find answers to most questions here.

  • California Revenue and Taxation Code Section 18662 and the related regulations (18662-1 through 18662-14) require the withholding of California income or franchise taxes from payments made to nonresident independent contractors performing services in California.
  • Withholding is also required on other payments of California source income to nonresident payees and on distributions of California source income to nonresident beneficiaries.
  • Revenue and Taxation Code Section 18668 makes the withholding agent liable for any tax required to be withheld. Revenue and Taxation Code Section 17951 contains the provision requiring nonresidents to be taxed on all income from California sources.
  • Payments made for personal services performed in California are California source income. Where the nonresident lives, the location where the contract for services is entered into, or the place of payment does not determine the source of income from personal services.
  • The source of income from personal services is the location where the services are performed. Nonresidents must include in California gross income the gross payments for all services performed in California.

If you want to know if an entity is qualified to do business in California, you can verify that here.

If you believe that an individual or a business is paying California taxes and should be, you can report that here.

The success of the legal cannabis market depends on everyone…and includes the businesses, business owners, their advisors and consultants, and the agencies that regulate all following the rules.

If we can help your California commercial cannabis business, please contact us. California Cannabis Biz – Check Consultants

aBIZinaBOX Services

 

Post Tax Season Priorities – Cannabis

Post Tax Season Priorities – Cannabis

Post Tax Season Priorities – Cannabis are already bubbling up in the minds of aBIZinaBOX professionals. We won’t have any opportunity to catch our breath once the end of the tax season ends on 4/17. There are three top priorities that we will focus on:

California Dept. of Tax and Fee Administration [“CDTFA”] has released a substantial number of announcements in recent days that relate to the 1Q filings for Cannabis Excise, Cultivation and Sales Tax. We have posted two significant articles on the Excise Tax which are linked at the bottom of this post.

Post Tax Season Priorities - Cannabis
Filing Cannabis Excise Tax Returns

CDTFA has released quite a few notices which we summarize below.

  • Microbusinesses or Cannabis Businesses with Multiple Licenses Cannabis Excise Tax Requirements [em-322] – which reminds Microbusinesses that they are subject to the same cannabis excise tax collection and reporting requirements as an independent, third-party distributor if you are a cannabis business licensed as a microbusiness that is authorized to act as a distributor, or if you hold multiple cannabis licenses to operate as both a distributor and retailer. The continue by stating

“Distributor supplies cannabis or cannabis products to a related/affiliated retailer
It is considered a “non-arm’s length” transaction when you transfer cannabis or cannabis products to the retail portion of your business. In a non-arm’s length transaction, the average market price is the gross receipts from the retail sale of the cannabis or cannabis products. You are, therefore, required to calculate the excise tax based on the gross receipts (all charges related to the sale of the cannabis/cannabis products).”

  • Information for Cannabis Retailers Excise Tax on Cannabis Purchased before January 1, 2018 – If you had cannabis or cannabis products in your inventory on January 1, 2018, you are required to collect the 15 percent cannabis excise tax from your customer when you sell those items and then pay that amount to a licensed distributor with whom you have established a business relationship.
  • Important Information for Cannabis Distributors – provides an overview of the reporting and invoicing requirements for cannabis distributors as well as information on how to avoid substantial penalties for failure to pay the cannabis taxes due.
  • Guidance on How Taxes Apply to Cannabis Inventory Beginning January 1, 2018 – Beginning January 1, 2018, cannabis retailers must collect the cannabis excise tax from their customers on each retail sale of cannabis or cannabis products. The cannabis excise tax applies to all retail sales, including sales of cannabis or cannabis products the retailer purchased prior to January 1, 2018. Cannabis retailers are required to pay the cannabis excise tax to a cannabis distributor. Cannabis cultivators owe the cultivation tax on all harvested cannabis that enters the commercial market on or after January 1, 2018. The cultivation tax does not apply to harvested cannabis a cultivator transferred or sold prior to January 1, 2018. Cultivators are required to pay the cultivation tax to a distributor or manufacturer.
  • Information for Cannabis Retailers How to Collect the Cannabis Excise Tax from your Customers on Retail Sales  –

     

  • Information for Manufacturers of Cannabis Products How to Collect the Cultivation Tax and Pay it to Distributors or Other Manufacturers –

As a cannabis manufacturer, you are required to collect the cultivation tax from cultivators when the unprocessed cannabis is first sold or transferred to you based on the weight and category of the cannabis. You must then pay the cultivation tax you collected to your distributor, based on the weight and category of the cannabis that was used to produce the cannabis product, when the cannabis products are sold or transferred to the distributor for quality assurance review and testing.

If the cannabis product is sold or transferred to one or more manufacturer prior to being sold or transferred to the distributor who arranges for testing and performs the quality assurance review, the cultivation tax must be passed to the next manufacturer who takes possession of the cannabis product until the tax is remitted to the distributor based on the weight and category of the cannabis that was used to produce the cannabis products.

  • CDTFA Video – Filing A Cannabis Excise Tax Return can be found here.
  • CDTFA’s Tax Guide for Cannabis Businesses can be found here.
  • Finally, all three regulatory agencies have released new information about Annual Licenses which we will cover in our next post.
  • Our articles on the calculation of Excise Tax for flower and extraction.

Blockchain Setting Background

Blockchain Setting Background

Blockchain Setting Background
Blockchain.com

Blockchain Setting Background provides a foundation for discussion that the commercial cannabis industry in California needs to have…NOW! The best overview that we have seen was published on the website of intheblack.com which describes itself as:

intheblack.com is a leading source of information on business, finance and accounting, offering key insights into strategic thought leadership by way of expert analysis, commentary and opinion. intheblack.com features articles from Australia’s most-widely circulating monthly business magazine, INTHEBLACK, plus a variety of content, including additional commentary, polls, audio and video, photo galleries and reader comments.

They published a series of articles

Blockchain – How Does It Work?

Blockchain – Everything You Need to Know

Blockchain: the future of record keeping

The United States Securities and Exchange Commission [“SEC”] published a paper entitled A Brief Introduction To Blockchain that is an excellent primer on the topic.

We believe that it is important to be very clear that while “blockchain” is quite often associated with cryptocurrencies such as bitcoin they are vastly different. Blockchain technology is a mainstream business technology of the future, while bitcoin might be viewed as a high tech version of Las Vegas.

Bitcoin – in bitcoin.org’s own words – How It Works

If you prefer your information “dumbed down” there is:

Bitcoin Explained for Dummies

How to Explain Bitcoin To Your Parents

If you are a crypto-genius, you might prefer

Bitcoin – Technical Details

Which brings us to the question of what is the relationship between bitcoin and blockchain?

IBM’s take on the difference is explained in The Difference Between Bitcoin and Blockchain For Business which is part of an excellent blog from IBM on Blockchain Education.

Once again, a dumbed down version can be found at

Our hope is that with the background we have provided in this post, everyone will be better equipped to understand the discussion that will be forthcoming on the role of blockchain in the commercial cannabis market.

There is an excellent article about blockchain in the cannabis industry today on Marijuana Business Daily entitled Marijuana businesses experimenting with blockchain technology, but skeptics persist by Omar Sacirbey. 

Cultivator Annual License Apps

Cultivator Annual License Apps

Cultivator Annual License Apps were published this week by CalCannabis. They tell us

To complete the annual license application you will need to submit Live Scan fingerprints for each person who meets the definition of “owner,” as described in the emergency regulations. We are finalizing the information needed for this process and will post the required “Request for Live Scan” form on our website soon. In the meanwhile, you may begin filling out your annual license application now, and make sure you click the “save” tab on the application so you can include the Live Scan form once it is available.

The newly available forms include:

The Annual License Application states:

CalCannabis Cultivation Licensing (CalCannabis), a Division of the California Department of Food and Agriculture (CDFA), is responsible for issuing licenses for commercial cultivation of cannabis in the State of California. Any person or entity who wishes to engage in commercial cannabis cultivation must submit an application package, which includes a completed application form, all required documentation, and a non-refundable application fee. Once your application is approved, you will need to submit payment for your annual license fee in order for your license to be issued. This document is intended to provide instructions for applying for commercial cannabis cultivation licenses in the State of California and does not provide information on industrial hemp production or non-commercial cultivation.

CalCannabis Cultivation Licensing, a division of the California Department of Food and Agriculture (CDFA), ensures public safety and environmental protection by licensing and regulating commercial cannabis cultivators in California. CalCannabis also manages the state’s track-and-trace system, which tracks all commercial cannabis and cannabis products—from cultivation to sale. CalCannabis is organized into three branches: Licensing, Compliance and Enforcement, and Administration.

We will have more to say about this very soon.

CalCannabis Licensing

 

BCC Subcommittee Materials

BCC Subcommittee Materials

The BCC Subcommittee Materials from meetings in Sacramento on February 13 are almost 500 pages. aBIZinaBOX submitted five items which are reproduced in the reports.

The Cannabis Advisory Committee will be holding a series of Subcommittee Meetings on Tuesday, February 13 in Sacramento. Ten Subcommittees will meet to discuss and develop recommendations to the state cannabis licensing authorities’ formal rulemaking packages.

MEETING NOTICES: The Meeting Notices and Agendas for each Subcommittee Meeting will be posted on the Bureau of Cannabis Control’s website – www.bcc.ca.gov – at least 10 days
prior to the meetings. A webcast will not be available for the meetings. All Subcommittee Meetings are open to the public.

Bureau of Cannabis Control

CA Cannabis Licensing