the firm talked to its insurance company first.
by liz gold
cannabizcpa.pro
mark guiley is a tax manager at isler cpa in eugene, oregon. and he’s the point person for the firm’s newly budding cannabis practice.
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though cannabis has been legal in oregon since 2014, the firm recently decided to start serving cannabis clients late last year.
“it’s still considered illegal for federal purposes, which creates a gray area for cpa firms, but we decided to go ahead and start assisting people because the owners of dispensaries and growers needed tax assistance,” said guiley. “so, we started offering services, tax filings, primarily.”
a couple of years out from being partner, guiley oversees the firm’s cannabis clients, providing consulting, tax and general accounting services. isler cpa has one office in eugene and about 20 staff in between their tax and audit departments, with that number inching higher during tax season. their bread-and-butter clients on the tax side include hospitality, manufacturing and real estate companies, while on the audit side, the firm works primarily with indian tribes, municipalities and key nonprofit organizations.
“it was never an issue of us not wanting to help people in this industry,” said guiley of cannabis. “obviously there is still a little bit of stigma for part of the population, but it was more so that we had to turn away a lot of potential clients in the last couple of years because the federal illegality of it posed a high risk and the industry wasn’t quite established yet.”
the firm moved forward in pursuing cannabis clients after a discussion with its insurance company and deciding it wasn’t fair for the cannabis industry to not have access to the services it needed to succeed and comply with tax regulations.
“since oregon has been legalized there are no threats of state penalties for just helping people out and providing tax services, so we decided to just go with it,” guiley said. “we feel that down the road it’s going to be legal everywhere, so we might as well get into it now and start helping these people out and by the time it’s legal everywhere we will have already built these relationships.”
guiley says the firm was proactive about its marketing, reaching out to local dispensaries in the eugene/springfield area and telling them about the firm’s services. it decided to start with dispensaries to launch the practice because well, in oregon, there are a lot of them.
“dispensaries’ tax returns are a little less complex than a grower’s because there are fewer things you can take as expenses with dispensaries,” said guiley. “with growers, it’s a little more in-depth so we thought to get our feet wet and start with dispensaries. and it was easy to create a list of the dispensaries in town by searching some popular cannabis apps.”
guiley said his interest in cannabis is twofold. he saw the tremendous business opportunity in such a growing industry – especially in oregon, where it’s legalized – but he also experienced the powerful medicinal effects of the herb as he recovered from a back injury.
“i had been taking ibuprofen and seeing a chiropractor a lot and then one of our friends introduced me to cbd oil drops and i started taking a couple of drops at nighttime to help me sleep and it completely got rid of my back pain,” he said. “i was more of an advocate because i felt like it could really help people dealing with chronic pain issues.”
as a result, guiley said he wanted to give back to the cannabis community and help them stay in business.
“part of that is having somebody who can help them be in compliance with their taxes and consulting advice and that is something they should have access to,” he said.
in general, he tells his cannabis clients that, at the very least, they need a bookkeeper to keep track of their transactions and to get a handle on the company’s financial condition.
“you can’t ballpark guess your numbers and when it comes time to do compliance filings and tax returns, if you have those things in place it makes everything much smoother,” he said. “you’d be surprised at how many dispensary owners are just putting stuff on a spreadsheet not knowing how to properly classify expenses. we always ask about what their books look like and that is the stepping-off point.”