The general election on Nov. 8 proved to be memorable for many reasons. First and foremost, voters in California, Nevada and Massachusetts voted to legalize recreational marijuana use (a similar measure failed in Arizona). In addition, voters in Florida, Montana, North Dakota and Arkansas all legalized the use of marijuana for medicinal purposes. Twenty-five states and territories have already legalized marijuana for medical purposes and four states had previously legalized it for recreational purposes in the last four years. There is no question that the landscape of the marijuana industry is changing rapidly and it (marijuana) has become a burgeoning emerging business. Navigating the regulatory, tax, accounting and other laws and regulations requires careful consideration as more and more entrepreneurs venture into the fray and seek advice from accountants and lawyers. This article explores some of the ongoing issues, and risks, that arise for professionals planning work with marijuana businesses.
Professionals planning to undertake any professional services for a marijuana business should first consider the ethical implications in the state where they hold a license. Regulators of the accounting profession have issued guidance in a number of states. Thus, CPAs should consider whether the state board in their state has issued guidance and the board has defined “good moral character.” The reason for this is simply that in the absence of a clear directive from the board about providing advice to a marijuana business, a state board of accountancy could consider the provision of accounting services to a marijuana business a basis for disciplinary action or the refusal to grant or renew a CPA license. As of January 2016, only seven State Boards of Accountancy have issued specific guidance for CPAs who want to provide these services. As more states legalize marijuana for recreational purposes, the State Boards of Accountancy will be called upon to address this issue and assist these professionals avoid acts that violate their ethical principles where the federal and state laws regarding marijuana are in clear conflict at this time.
