The state of Oklahoma has gone through a monumental change in 2018 with passage of SQ 788, medical marijuana is now legal in the State. Leading up to the passage of SQ 788, Oklahoma has seen the rise of CBD businesses. Since November 2017, these businesses are selling CBD or cannabinoid in shops across the state. Local news reports out of Oklahoma City highlighted the trend, and is only amplifying further. With that, medical marijuana dispensaries are the next step for these shops. If you are of them, what is the best course of action to make a move?
Why Are Businesses Making the Change?
Businesses want to expand from a CBD shop to a medical marijuana dispensary due to the potential gains in revenue. There is a new and untapped market. CBD shops are now plentiful, meaning the market is a bit saturated.
How Can a Shop Be Opened?
There is a process to follow in Oklahoma to become a legal medical marijuana dispensary. To open a medical marijuana dispensary, you need to have a medical marijuana license. Applications are going to be reviewed and chosen by the State based on applications variables within them.
What to Consider Before Making the Move?
You have to think about a few things before you go from a CBD shop to a medical marijuana dispensary. You have to first and foremost consider the law and regulations in the state of Oklahoma. What is the process you have to go through to become a dispensary? Are there any approval steps before you can open your doors?
Tax implications also must come into play. Be aware of the changes to handling revenue, what expenses you can claim on your tax return, so you can better prepared once it is time to file state and federal taxes. A tax professional can assist.
Accounting policy changes may also have to be incorporated, which is where a professional accountant will come into play. Awareness of needed changes can help keep your books right and the business afloat and prosperous.
How Should I Operate?
This is a decision that should be given intense thought and care. You could operate as a Sole Proprietorship or Partnership, with taxes and liabilities passing through to you as an individual . Or incorporate into the standard C Corporation and pay a lower tax rate, but perhaps face double taxation. Or set up as a Limited Liability Company, with the flexibility to be any one of a number of types of entity for tax and legal purposes. There are many other possible options. Which is best for you?
What's the Most Important Step to Take?
Hire a tax attorney/accountant! This is an easy one as you need to have an expert on your side to tell you what you need to do and also to assist you through some of the more complicated steps of the process. Medical marijuana dispensaries are highly regulated, and it is not as simple as just deciding to open up a shop. It has to be a methodical approach that takes into legal account steps required. Having a tax attorney/accountant can allow you to clear hurdles with ease.
You never want to make a complete change to your business before taking into account things like tax impact, accounting policy changes, regulations, etc. When going from a CBD shop to a medical marijuana dispensary, take into account all factors. Work with a professional tax attorney and accountant, so all bases are clear before you open up your dispensary doors to the public. Call Travis W. Watkins Tax Resolution and Accounting Firm for your Free consultation at 800-721-7054.
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