As a cannabis entrepreneur, you already know the excitement of being part of a booming industry. But you also understand the heavy compliance burden that comes with it. That’s where cannabis accounting makes all the difference. At Hudson & Empire, we specialize in helping cannabis businesses like yours manage tax planning, financial reporting, and compliance with confidence—so you can focus on growth while we handle the numbers.

Why Cannabis Accounting Is Critical for Your Business

Operating a cannabis business in the U.S. is unlike running any other kind of company. Even though states like California have legalized medical and recreational cannabis, it remains illegal at the federal level as a Schedule I controlled substance. This federal-state conflict creates serious tax and accounting challenges—especially around Section 280E of the Internal Revenue Code.

Section 280E: What You Need to Know

Section 280E disallows most deductions that regular businesses take for granted—like rent, salaries, and advertising. For you, that means fewer write-offs and a much higher tax bill. The exception? Cost of Goods Sold (COGS). While you can’t deduct ordinary expenses, you can reduce your gross income by accurately reporting your direct production costs.

That’s where we step in.

At Hudson & Empire, we help you maximize COGS legally and effectively. From inventory acquisition and packaging to allowable indirect costs, we ensure every expense that qualifies is properly documented and allocated—so your taxable income goes down, and your business stays compliant.

Customized Cannabis Accounting That Works for You

You need more than general accounting—you need a firm that truly understands the cannabis space. Our cannabis accounting solutions are built specifically for dispensaries, cultivators, manufacturers, and vertically integrated companies like yours.

Here’s what you get when you work with us:

✔ Inventory Management

We track your inventory down to the last bud and pre-roll, ensuring accuracy for COGS reporting and helping you meet all regulatory standards.

✔ Cash Flow Management

With banking restrictions still in place, you’re likely handling a lot of cash. We’ll show you how to manage it securely, stay audit-ready, and maintain clean, accurate records.

✔ California & Multi-State Compliance

Whether you’re navigating California excise tax, sales tax, or local city taxes—or expanding into other legal states—we’ve got the experience to guide you through it all.

✔ Vertical Integration Strategy

If you cultivate, manufacture, and sell your own product, we’ll help you structure your business to take advantage of expanded COGS opportunities and reduce your overall tax burden.

Real Cannabis Accounting Results That Matter

Dispensary COGS Strategy: We helped a dispensary reclassify expenses and fine-tune their COGS approach, resulting in a 25% increase in allowable deductions—and major tax savings.
Entity Restructure for Vertical Integration: One vertically integrated client cut their effective tax rate by strategically reorganizing their business entities with our help. The result? More efficiency and more money in their pocket.

Stay Ahead with Hudson & Empire

The cannabis regulatory environment shifts quickly—and your ability to stay compliant depends on staying informed. We constantly monitor state and federal updates so you don’t miss out on tax credits, deductions, or changes that could impact your operations.

You won’t just be reacting to compliance changes—you’ll be proactively adapting with our expert guidance.

You Deserve a Cannabis Accounting Firm That Gets It

If you’re in the cannabis business, you can’t afford generic tax advice. You need cannabis accounting specialists who understand Section 280E, inventory complexity, cash handling, and multi-layered state regulations.

At Hudson & Empire, we take care of your accounting, so you can take care of your business.

Reach out to Hudson & Empire today for a consultation. Whether you’re just getting started or looking to improve your current structure, we’ll help you reduce risk, lower your taxes, and build a stronger financial foundation.

Frequently Asked Questions (FAQs)

What is cannabis accounting, and why do I need it?

Cannabis accounting focuses on managing the unique tax and compliance issues that come with operating a cannabis business. With strict rules like Section 280E, specialized accounting is essential to reduce your tax liability and stay legal.

How does Section 280E impact my taxes?

It prevents you from deducting typical business expenses, which raises your tax bill. However, maximizing COGS within legal boundaries can help you lower your taxable income.

Can you help me manage cash if I don’t have access to traditional banking?

Yes. We’ll provide best practices for cash handling, internal controls, and record-keeping—even when banking access is limited.

Why is inventory management so important in cannabis accounting?

Because inventory costs feed directly into your COGS. Accurate tracking lets you legally reduce taxable income while meeting compliance obligations.

What should I look for in a cannabis accounting firm?

Experience with cannabis laws, deep knowledge of Section 280E, and the ability to provide tailored, proactive guidance specific to your business model.

Cannabis Accounting: Specialized Tax Solutions for a Rapidly Evolving Marketplace