Cannabis Brands
Accounting for California Cannabis Brands
Brands typically outsource cultivation and manufacturing and invest in product development, packaging and marketing — precisely the costs federal law treats as non-deductible. That makes structure, contract economics and margin discipline unusually important.
Financial challenges specific to this license type
Marketing is non-deductible
Brand building is the core activity and, at the federal level, none of it reaches cost of goods sold for a reseller.
Co-packing and contract manufacturing
Costs are governed by agreements with third parties, so landed unit cost depends on contract terms, yield assumptions and shrink responsibility.
Licensing and royalty income
Royalty arrangements raise questions about whether the brand entity is trafficking, which drives entity structure and tax exposure.
Inventory held at partners
Product sitting at a manufacturer or distributor is still inventory, and reconciling it across partner systems is a persistent problem.
How we work with cannabis brands
- Landed unit cost modeling across co-packing agreements
- Entity and royalty structure analysis documented in advance
- Third-party inventory reconciliation across partner systems
- Contribution margin by SKU with true after-tax cost of promotion
Services most relevant to this operator profile
Entity Structuring
Entity selection and multi-company structure designed around 280E, licensing, liability and exit.
Read moreFinancial Reporting
GAAP-aligned statements, investor reporting packages and KPI dashboards for licensed operators.
Read more280E Tax Compliance
Defensible cost-of-goods-sold positions, inventory capitalization and year-round planning under IRC Section 280E.
Read moreBusiness Advisory
Expansion analysis, licensing economics, transaction support and internal controls for scaling operators.
Read more
Consultation
Speak with a California cannabis CPA
Bring your license types, current books and open deadlines. We will tell you what needs to happen first and in what order.