For entrepreneurs involved in cannabis and CBD ventures, the opportunities are enticing. Yet, standards are being forged, tested, and refined as uncertainties surround licensing, tax liability, cash flow, and government regulation. Pioneers are wise to seek the support of professionals with proven backgrounds in accounting, audit, tax, business valuation and advisory.
PKF O’Connor Davies specialists have been integral to the success of companies in emerging industries since 1891. Over the years, we have earned the respect of both clients and colleagues for guiding innovators through early-stage, often first-time, audit and tax filing processes. Our business acumen is invaluable to organizations launching enterprises in uncharted waters.
We deliver the background, experience, knowledge, and insight today’s innovators need to navigate a new world of opportunity.
Audit Capabilities that Add Genuine Value
Securing the support of experienced auditors often proves essential to enhancing the credibility of a business and its ability to attract funding. Our assurance teams provide comprehensive audit, reviews, and compilation services – from financial statement compliance audits to internal control reviews and attestation reports for financing activities. Our teams include both partners and professionals who maintain regular communication to produce reports that meet all industry standards and benchmarks and to keep clients informed of legal and regulatory developments.
As government tries to keep pace with this emerging industry, inconsistencies in federal, state, and local regulations make it difficult for businesses to understand and comply with the new rules. Investors also face hurdles when evaluating the potential of Qualified Opportunity Zones to deliver revenue and capital appreciation as regulators have yet to determine whether cannabis enterprises may participate. Discerning how to operate amid these substantial and unresolved issues demands the elevated tactical knowledge and acuity our teams deliver.
Extensive Tax Insight
From growers to dispensaries, companies involved with cannabis struggle with tax planning and filing because the IRS has offered little guidance in identifying which expenses qualify for deduction. Tax preparation is complicated by the fact that an entity’s tax liability may differ substantially depending upon whether it uses a cash or accrual accounting method. To help businesses forecast, manage and meet tax obligations, we leverage our understanding of how these rules have evolved in the past, watch for opinions and rulings, and apply the insights we’ve gained from working with other entrepreneurial clients.
Advisory Services for Investment Funds
We deliver a unique blend of strengths, in a cost-efficient manner, to the private equity, hedge fund and corporate acquisition communities. With the increased scrutiny on valuations from investors, regulatory agencies and auditors, it is imperative that owners and managers stay abreast of valuation standards and implement best practices. Our valuation team is experienced with cannabis- focused private equity funds and provide valuations of portfolio companies and purchase price allocations. Our transaction advisory services can help clients maximize value, minimize risk, uncover vital data and identify potential partners.
Whether in pursuit of growth through acquisition or capital through divestment, these transactions are complex; they demand superior financial acumen, focused attention to detail, insight borne of success. Our fund administration practice performs investment, entity, partnership, tax and investor accounting and provides complete middle- and back-office services. We prepare custom reports, including financial statements and portfolio performance analytics for stakeholders.
Unlike many of our peer firms, PKF O’Connor Davies offers a broad range of capabilities to support entrepreneurs and investors. Our services include:
- Private Equity Financial Reporting: Portfolio Company Valuations
- Business Combinations: Purchase Price Allocation
- Cost Accounting and Cost of Goods Maximization (280E)
- Outsourced CFO Services
- Monthly and/or Annual Bookkeeping
- Fund Administration
- Corporate Structuring (280E Minimization)
- State and Local
- Operations Reviews
- Internal Control Reviews
- Fraud Risk Assessment
- Business Plan Review
- Due Diligence