Cannabis Business Accountants in Washington

Key Points:

• Services Offered: Regulatory compliance, financial strategies, tax navigation, and risk mitigation.
• Tax: Cannabis products are subject to a 37% excise tax in addition to regular sales tax, though medical cardholders buying from endorsed retailers are exempt from this excise tax.

Market Scope

Approximately 1,500 licenses were issued in Washington State for cannabis businesses, including producers, processors, and retailers, each requiring specialized cannabis-specific accounting support.

A Day in the Life of a Cannabis CPA

Washington’s cannabis sector is governed by more than just business acumen. With stringent reporting standards, audits, and tax rules, CPAs specialized in cannabis find themselves wearing many hats. Some days, they’re buried in regulatory paperwork, ensuring their clients’ records are impeccable. Other days, they’re developing tailored financial strategies for budgeting, cash flow, and tax planning. They play a crucial role in keeping operations compliant while also preparing businesses to grow sustainably.

• Are you a Washington-licensed CPA offering services to cannabis-related businesses? Request to be listed .

Taxing Realities: Cannabis vs. Standard Goods

Standard goods and services are generally subject to a combined state and local sales tax ranging from 7.5% to 10.6%, while cannabis products face a 37% cannabis excise tax in addition to the standard retail sales tax. However, medical cannabis purchases made by recognized cardholders through licensed retailers with a medical endorsement are exempt from the 37% excise tax.

Unique Accounting Considerations for Cannabis, CBD, and Hemp Businesses

For CBD and hemp businesses in Washington, the financial picture is evolving. Senate Bill 5367 reclassified “cannabis production” to include CBD products with detectable THC, placing some CBD businesses under similar accounting restrictions as cannabis enterprises. These businesses, like their cannabis counterparts, now face the limitations of IRC Section 280E, which restricts their ability to deduct expenses.

Meanwhile, hemp businesses—those operating with products containing less than 0.3% THC—enjoy more flexibility. The 2018 Farm Bill federally legalized hemp, allowing these businesses to deduct ordinary business expenses. However, they must still follow strict inventory costing practices as outlined by IRC Section 471. A cannabis CPA helps these businesses maximize deductions while keeping them compliant with federal inventory requirements.

The Importance of State-Specific Cannabis Accounting Expertise

Expertise is essential for compliance, minimizing tax liabilities, and optimizing financial management. Noncompliance can result in significant penalties and legal issues.