The role of the CFO in the marijuana business

The role of the small business Chief Financial Officer (CFO) is typically described in four distinct functions. I describe my own CFO role as filling five functions in the emerging marijuana industry.



The CFO has primary responsibility to assemble, safeguard, manage and store the financial records of the company. This basic but necessary service is best handled by a person focused and experienced on business records. This may sound straightforward, but I find that almost every business faces challenges keeping and managing necessary records.


Internal controls

CFOs add value by designing, monitoring internal controls. This happens to be the area where management tends to have the least experience and so this important function might be otherwise overlooked, leading to financial losses that could have been avoided. Management often underestimates the risk of fraud and misappropriation; the CFO must keep that risk control front and center.


Communication and reporting

The CFO communicates internally to management and to external stakeholders.

A business needs accurate timely data to make good management decisions. The always-changing type of data, the format, timing and the method of delivery are all important components to consider as part of this function. Management may also need to know how the company is doing compared to the competition or benchmarks established by investors. Managers typically want to know the business is doing now compared to earlier periods.

CFOs also oversee duties related to owners, investors and shareholders and are the primary control of risks related to management fraud and disclosing financial information.

Sometimes the CFO must develop forecasts of future performance and utilize industry benchmarking data.



Every company has compliance issues to address with government, and the CFO oversees many of them. Filing and paying taxes is obviously one major burden, but not the only compliance requirement. Marijuana businesses face strict non-financial recordkeeping burdons.


Advocate for management and the industry

The modern CFO is often active as an advocate, negotiator and representative of the company in dealing with new potential customers, government regulators, and investors. I often find myself active through industry associations that leverage the power of small independent businesses.

I am pleased to discuss how an experienced part-time CFO can help your business. Please use the chat box below to send a message or the scheduling link on the right to set a time to talk.

Caution with CBD products

(hold for CBD banner advertisement photo)

I talked with two local small business owners this weekend who recently started marketing CBD products in their shops. One is a local health food drink maker and the other primarily markets beauty products. Both were completely unaware of the risks they take in selling CBD products. They are considered MRB (marijuana related business) under the law. They didn’t know that they are subject to some of the same harsh law enforcement actions as a street corner drug dealer.

The implications of being raided by law enforcement are scary (think about Eric Garner, the unlicensed cigarette seller killed by police in a takedown raid) and the many whose lives were ruined by overly aggressive marijuana prosecutions with slim and questionable evidence. Not even to mention the cases where false evidence was introduced to cover up an officer’s action who initiated an improper action and arrest. Today’s MRB entrepreneurs like to think “this couldn’t happen to me”. I presume that’s what Eric Garner thought before his fatal encounter with law enforcement.

Then yesterday there was a case reported where police in Maryland arrested and jailed a middle aged business guy for more than a month. He had no criminal background and police later admitted what they thought was an illegal substance was simply a bad lab test result. 

So call me paranoid, but I’m concerned that the risk of selling an unapproved product could be worse than the seller imagines.

One otherwise flawless small business had thousands of dollars in merchandise confiscated and their shop left in shambles after a raid during business hours (not to mention the embarrassment and damage to community reputation). Law enforcement is not responsible for financial damages caused by their actions without lengthy, difficult and expensive legal actions. Another young small business owner faces prosecution action by the local health department for introducing a CDB flavored product into his lineup. Either one could possibly lose their insurance, their banking, their business lease, etc.

I say again and again:

  1. Know the law
  2. Know your business position
  3. Be prepared with a risk management plan
  4. Do not expect everyone in government to agree with your position no matter how well legally grounded.

In summary, selling CBD products is not a decision to be taken lightly. DOn;t assume that becasue hemp products are decriminalized where you live that you are ‘in the clear’. I am pleased to discuss the issue with anyone who has concerns.

Sara’s advice for entrepreneurs

My business relationship with Sara Rosenberg, the Connector-in-Chief, is one of my greatest blessings. This excerpt is taken from one of her recent social media post as a sample of why I say this:

“When you’re first starting out, and money is tight (or let’s be real, non-existent), you can do the following things for free, or damn near close to it, if you’re willing to learn:

1. Build a website (Wix and Godaddy are super easy and cheap.)
2. Create marketing collateral. (Canva and MS Publisher!)
3. Build a network and work it. (LinkedIn and Brynne Tillman’s book.
4. Learn a sales process (Book Yourself Solid)
5. Learn how to do social media the right way. (Gary V’s $1.80 Method)
6. Keep everything straight (ASANA or Trello)1
7. Keep track of your money (Freshbooks or Quickbooks)2
8. Everything else…. Google and Youtube are an entrepreneur’s BFFs!!”

Simple, right? In reality there is so much more and Sara stresses constant learning. Aligning with the best people can make a huge difference. All of the people and resources mentioned are top-notch.  

If you are planning a business or trying to ramp up your existing business these tools can be invaluable. I’d love to hear what’s working for you and where you see a need for improvement. Use the chat button below to send a message or use the scheduling link at the right to plan a free, no obligation introductory call.


1 As a small business accountant I spend a lot of time on this topic. It’s the single most important ingredient to business success. In a Microsoft Office 365 environment (mine and most other professional firms) I rely heavily on OneDrive and OneNote to keep information available, safe and organized. Pipedrive and Lastpass are also essential information organizers for me. I’ve written about and offer consults on each of these crucial starting block tools.

2 Yes, I’m Freshbooks and QuickBooks certified. I also offer simpler tools for start-ups. But, bottom line, if you aren’t devoting 1% to 2% of your time and money into financial management then you are headed toward disaster.

All accountants are not created equal

It’s all important, of course, and I’m grateful for these online communities that allow us to collaborate daily.

All accountants are not created equal. That should be obvious.

Some are great at bookkeeping (I’m not. I automate or outsource as much as possible). Some crank out huge numbers of tax returns (I don’t. I do a few, maybe 50 mostly complex ones, and take my time on each one especially the messy or complicated ones). Others are great CFOs, focused on management procedure and internal controls. (I’m good at this but few of my small business clients are big enough to justify hiring for CFO services so I usually offer this service piecemeal incidental to another engagements).

But I notice that I’m stronger in one specific area than most others: business planning. That’s partly a result of formal education. That’s typical core MBA stuff. Then I had the benefit of some great business and tax planners in the Masters of Taxation program. My focus of study at law school was “Compensation Planning”. After that I was drilled in the financial planning strategy mindset through the many training programs on Wall Street and then in the first decade of my solo career. Now decades later, It is so ‘routine’ that I actually had to be reminded of this market position distinction by my marketing advisor.

Nowadays when I’m with other accountants, often in online webinars and group chats, I’m leading the discussion on strategy – focused on asking what is possible – while others focus on tax code requirements and better ways to get things done within the firm. It’s all important, of course, and I’m grateful for these online communities that allow us to collaborate daily.

So where does all this lead? It points to a consensus that I’m a good person to talk with when you are planning a business launch or change in strategy or a major financial move. At this early stage of marijuana industry development, many are seeking early input into financial aspects of their business plan. That’s the reason that offer free 30 minute consults. It gives me a chance to shine as a first impression doing what I do best.

So I encourage you to get a second opinion on your most important small business financial strategies by scheduling a 30 minute call. There’s no obligation and I welcome the chance to learn about your unique business situation. Use the link at the right or the chat box below to plan a time for us to introduce this discussion.