Fall Season. Back to School.
Back to Business.
The Fall season is just starting, students are back at school, and businesses are shoring up their planning.
In this Newsletter we feature Renata Serban, with a brief follow-up conversation from her podcast earlier this week.*
With such a background and experience, when you advise new and existing entrepreneurs, how do you recommend they plan their finances for profitability, growth, and compliance while capital may be scarce?
A: Renata – My overall recommendation, and many business people will agree with me, is that before you start a business you need a business plan. For some reason, many start-up cannabis operators are ignoring it.
During the process of development of the business plan an entrepreneur will identify and analyze many aspects of business operations. For example, if it’s cultivation, what is the size of the lot or area where the plants will be grown, how many harvests will be during a year, what is the selling price per pound, how many employees are needed, what is the cost of build out, what are the other costs needed for getting the product ready for sale, who are the competitors, who are the potential partners?
When going through all of these thoughts an entrepreneur can have a much better idea how much funding is needed, what compliance is necessary since a business plan has to be tailored to cannabis regulations, and estimate potential growth by predicting how the market will move with time.
Scarce capital is always an issue not just for cannabis operators but for many other industries. Yes, there are more loans available for non-cannabis industries but many banks prefer operational businesses and very often the start-up non-cannabis businesses also struggle with capital raise.
Having a solid business plan with detailed financial projections is a must for any capital raise. Strong consideration also has to be given to strategic partnerships with other businesses.
“My overall recommendation is that before you start a business you need a business plan. For some reason many start-up cannabis operators are ignoring it.”
Once the company becomes operational, the profitability, growth and compliance is really driven by staying on top of the operations. I’m frequently seeing that some business owners in their first months of operations are over-hiring and over-ordering products. I always recommend starting lean with a smaller team and then gradually grow as needed. The same with products, start with small inventory, see how it goes and then increase purchases as needed.
All processes within the business need to be clearly identified so everyone knows their own responsibilities and has tools to perform those responsibilities. Automating as much of business operations as possible is important for efficient operations.
The marketing and advertising regulations in cannabis are a serious issue to consider when developing brand awareness and attracting foot traffic to the store. Dispensary owners need to think about brand development before the store is open, and they must constantly stay on top of their branding strategy once operations begin.
Prioritizing cash flow management, focusing on customer retention, efficient operations and reviewing financial metrics on a regular basis (at least monthly) are really the keys to growth.
“Prioritizing cash flow management, focusing on customer retention, efficient operations and reviewing financial metrics on a regular basis are really the keys to growth.”
Q: CWCBExpo – You have great experience with one of the largest CPA firms that serve the industry, and you now own your own firm, Highly Elevated CPA. What advice can you give to anyone looking to go out on their own after working for a large corporate company? What steps do you recommend for them to take prior to branching out on their own?
A: Renata – The profession of accounting is currently evolving. There is a shortage of qualified accountants which is due to many factors. Some of them are declined enrollment in accounting programs, high educational requirements along with the complicated CPA exam, stress due to complex compliance rules and long hours during the busy season.
My professional accounting background is very diverse and unique. Back in the day, many CPAs working for public accounting firms would eventually move to private accounting where they would work on accounting just for one company. Nowadays, the trend is in the opposite direction. Many public accounting firms prefer to hire accountants from the private sector since these professionals would most likely know not just accounting, but operations as well. This type of work experience is very useful in public accounting firms which makes them great advisors. This was my path decades ago. I moved from being a controller for a realty management firm to being an accountant at a CPA firm.
The size of the CPA firm is also very important and I was fortunate enough to work for small firms, mid-size and larger accounting firms. The experience was very different at each firm due to the size. At each firm I learned a lot.
Starting your own business is a very challenging and a risky task. Having good technical skills is not enough when branching out on your own. As a business owner you also have to understand that you need to bring new clients. So the main recommendation before you decide to branch out is to have a good business network and have your name out there. There are many super smart accountants that don’t know how to do business development.
It’s also important to identify the goals for your firm, who will be the ideal client for the firm, what services should be provided, how many clients are enough, the infrastructure of the firm, etc.**
“As a business owner you also have to understand that you need to bring new clients. So the main recommendation before you decide to branch out is to have a good business network and have your name out there.”
* Visit CWCBExpo’s “Highest: In The Room” podcast to hear more from Renata Serban.
In the September 26 podcast, KymB gets down and real and specific with Renata about rescheduling, business planning, and the critical importance of proper accounting practices.
** Learn more about the technology to consider in your business plan. In this newsletter we feature a hot business topic from the 10th Annual CWCBExpo 2024 Conference: “High Tech: How Technology Can Drive Your Business.” Hear about seed-to-sale software, humidity control, pre-roll machinery, vape battery technology, and of course, the impact these have on the bottom line. This session was moderated by Renata Serban, Founder and CEO of Highly Elevated CPA.
(More info and the link to watch this video are at the bottom of this newsletter.)
Rescheduling
| Rescheduling Update – Prior 280-E Debts Will be Enforced |
In our August newsletter, we highlighted that the Drug Enforcement Administration has delayed Rescheduling cannabis from Schedule I to Schedule III and has set a hearing for December 2, 2024. The stated reason for the delay is that they need to gather more information before a decision is made. Luke Ortner, Senior Counsel, IRS, Office of Chief Counsel, appeared as a keynote speaker in the American Institute of CPAs® and the Chartered Institute of Management Accountants® Cannabis Conference. The senior Counsel was questioned and commented on a variety of issues surrounding the taxation impact on rescheduling. One point made was that the 280-E tax policy will continue to be enforced until rescheduling is completed, and any eventual removal of 280-E is not likely to be retroactive, meaning that any past due IRS debts regarding 280-E are likely to remain collectable liabilities.
New York State Cannabis News
| New York State Office of Cannabis Management, Cannabis Control Board |
This month the NYS Office of Cannabis Management (OCM) announced and issued for use a new tool called the Legal Online Cannabis Activities Locator (LOCAL) Map. It is geared to streamline the licensing process and allow for transparency. It also is trying to save applicants money by not having to engage third party services during the application process. In their announcement, the OCM highlighted several aspects of this LOCAL Map tool including that it helps applicants and businesses to:
- Evaluate retail locations
- Check municipal opt-out statutes
- Access data for cannabis licensing in NYS
The LOCAL Map tool has both an Industry-Focused Map tool and a Consumer-Focused Map tool geared as follows:
- The Industry-Focused Map tool is meant for applicants, licensees and stakeholders, and can provide proximity reports, search licenses and provide the data needed to meet regulatory requirements
- The Consumer-Focused Map tool is a dispensary locator map that locates the nearest legal dispensary in New York
| NYS Market Update |
There is some very positive news about retail sales in NYS. The NYS Cannabis Advisory Board (CAB) held a meeting on September 24th, and John Kagia, the NYS OCM Director of Policy, provided some sales data on the NYS retail market. Kagia asserted that the revenue outlook by year’s end is quite good and could approach $800MM.
- The total retail sales in August closed in on $100MM
- The total retail sales is projected to be over $500MM by the third quarter
Much of the good sales news was helped by the opening of more licensed dispensaries combined with the crack down on illegal shops, which substantially helped the legal dispensary sales.
Congratulations to These Recent Adult-Use Dispensary Openings
It is noteworthy is that as of September 24, 2024, the OCM reported that 197 legal Adult Use dispensaries have already opened for business. They project that 200 total dispensaries will be opened by the end of September.
Valley Greens
PEEKSKILL | 939 Central Ave, Peekskill 10566
Website: https://valleygreensny.com
Greens Greenery
UNADILLA | 54 State Highway 357, Unadilla 13849
High Peaks Canna
SARATOGA SPRINGS | 137 Maple Avenue, Saratoga Springs 12866
Website: https://highpeakscanna.com
Royal Blend Dispensary
KINGSTON | 2223 NY-32, Kingston 12401
Website: https://royalblenddispensary.com
Alto on Chambers
NEW YORK CITY | 110 Chambers St, New York 10007
Website: https://altocanna.nyc
HighLife Health
NEW ROCHELLE | 19 Huguenot Street, New Rochelle 10801
Website: https://highlifehealth.co
ZenZest
STATEN ISLAND | 2343 Forest Avenue, Staten Island 10303
Website: https://zenszest.com
Lifted
JAMESTOWN | 320 North Main Street, Jamestown 14701
Bodega Express***
NEW YORK CITY | This is a Temporary Delivery Only (TDO) location.
No in-person or pre-order sales are allowed at this location.
Website: https://bodegaexpressny.com
Sparkboro
WASHINGTON HEIGHTS | 704 W 177th Street, New York 10033
Website: https://sparkborony.com
High Stone*
*Transitioned from Temporary Delivery Only (TDO) to Brick & Mortar location
STATEN ISLAND | 1938 Clove Road, Staten Island 10304
Website: https://highstone.nyc
State of Mind Dispensary
LATHAM | 521 Troy Schenectady Road, Latham 12110
Website: https://itssom.com
Gotham Hudson
LATHAM | 260 Warren Street, Hudson 12534
Website: https://gothamnyc.com
White Atmoss
NEWBURGH | 136 Lake Street, Ste 2, Newburgh 12550
Website: https://whiteatmoss.com
Nuna Harvest
MT VERNON | 696 Locust Street, Mt Vernon 11552
Website: https://nunaharvest.com
Beleaf BK
BROOKLYN | 1077 Atlantic Ave, Brooklyn 11238
Website: https://beleany.com
Leaf Plug
AMHERST | 3341 Sheridan Drive, Amherst 14226
Website: https://leafplug.com
Brooklyn Bourne
BROOKLYN | 2223 Church Avenue, Brooklyn 11226
Website: https://brooklynbourne.com
Bleu Leaf Dispensary
BRONX | 2034 Jerome Avenue, Bronx, NY 10453
Website: https://bleuleafdispensary.com
Ether
BUFFALO | 5100 Genesee Street, Buffalo 14225
The Highly Connected Dispensary
ITHACA | 423 Franklin Street, Ithaca 14850
Website: https://thehighlyconnected.com
Etain Kingston
KINGSTON | 445 State Route 28, Kingston 12401
Website: https://etain.com
Reef Dispensary
GREENFIELD CENTER | 2532 Route 9N, Greenfield Center 12833
Website: https://reef-dispensary.com
Satisfied Mind
NORTH TONAWANDA | 31 Webster Street, North Tonawanda 14120
Website: https://wnymind.com
Frass Box
BRONX | 3633 Kingsbridge Avenue, Bronx 10463
Website: https://frassboxcannabis.com
Luxus Botanica
ROME | 8234 Turin Road, Ste 1, Rome 13440
Website: https://luxusbotanica.com
Verilife East Syracuse
EAST SYRACUSE | 5841 Bridge Street, Ste 100, East Syracuse 13057
Website: https://verilife.com/ny/locations/east-syracuse
Sweetlife
MANHATTAN | 1662 First Avenue, New York 10028
Website: https://sweetlife.nyc
New Jersey Cannabis News
New Jersey Seeking Stakeholder Input on Medical Cannabis
Coming up on October, 1, the New Jersey Cannabis Regulatory Commission will have its final virtual session to seek input from stakeholders of medicinal cannabis. They seek participation from healthcare providers, patients, and business owners. They already held three such virtual meetings. These meetings are run by the Product Safety, Packaging, and Labeling Committee , and Permitting and Licensing Committee, and are scheduled as follows:
- All meetings are currently scheduled for 11:30AM – 12:30PM each of those dates
- These sessions are being organized by the NJCRC’s Commission on Public Engagement and Education Committee
- The final roundtable session, scheduled for October 1, will be focused on Permitting and Licensing Committee issues.
If you want to participate, click here. Invitations are required in order to participate, and you will need to fill out an invitation request form.
New Jersey Governor Phil Murphy Signs Hemp Bill
Governor Phil Murphy signed a bill that regulates the hemp market for intoxicating hemp products and prohibits the unauthorized sale to anyone under the age of 21.
National Cannabis News
DOOBIE Act
This month, the Senate Homeland Security and Government Affairs Committee approved the DOOBIE Act: Dismantling Outdated Obstacles and Barriers to Individual Employment. The DOOBIE Act is important because it limits the ability for federal agencies to use past cannabis usage against applicants getting security clearance or getting federal employment. This will certainly help to minimize the discrimination that applicants who use cannabis get when applying for federal jobs that require security clearances. Those applicants can no longer be disqualified solely due to prior cannabis use.
State Ballot Measures this November
Many states have cannabis ballot measures in this election and with early voting, things are already started. All cannabis industry businesses should stay up to date on the various measures that are now being voted on.
Nixon Recordings
The War on Drugs that Nixon unleashed needlessly created decades of injustice to people of the United States. Recently, it was uncovered that Nixon recorded, in his own words, his acknowledgment that marijuana is not dangerous. This revelation was recently found in his recordings that he kept private.
Pickleball Anyone?
Truleive Cannabis Corp. announced in a press release they forged a partnership with the Professional Pickleball Association (PPA), and with MLP by Margaritaville (Major League Pickleball).
This is an early example of a cannabis company sponsoring a sports league.
Germany Cannabis News
Germany’s Legalization
| In our February Newsletter we highlighted that Germany legalized limited recreational use. Their plan sought to make it accessible through regulated cannabis non-profit groups with stringent rules regarding possession, age requirements, and grow restrictions among the members. It seems that the illicit markets there, are having a boom of their own while the German plan gets implemented. Several factors have impacted Germany’s legal recreational market. |
THIS MONTH’S CWCBExpo NY 2024 ARCHIVED VIDEO
High Tech: How Technology Can Drive Your Business
This is a discussion about how technology should figure into your cannabis business. We explore how technology affects your ROI and the aspects that can make a difference.
The session is brimming with cannabis business innovators, technologists, and entrepreneurs discussing how technology could impact your business plan and how it can make a difference for your business success. Moderated by Renata Serban, Founder and CEO of Highly Elevated CPA, and joined by iconic leaders from various sectors, this session delivered a very energetic and informative approach on how tech can and will drive your business.
Moderated by Renata Serban, Founder, CEO, Highly Elevated CPA, with: Dawne Morris, CEO and Co-founder of PROTEUS Business Solution; Anthony Pagni, Founder & Co-Owner Perfectionist Rolling Equipment, Managing Partner, Aephex, Automated Pre-Roll System; Dr. Sandra Shen, Founder, ATMOSIScience Inc; Luna Stower, Chief Impact Officer, Ispire Vape Technology.
Don’t miss out. Get prime exhibit space now.
June 4 – 5, 2025
Javits Convention Center, NYC
