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June 25, 2015 | 5-minute read (923 words)
EGFS’ first-ever panel event for cannabis entrepreneurs attracted 100 participants. The speakers were: Ambere St. Denis of Crimson Business Insurance; David Ehrenberg, CEO of EGFS; David Kram, Founder and CEO, Relieve; Evan Horowitz, Cofounder of Weed Club; Brian Holmes, Managing Director at First Ascent Associates; Tucker Cottingham, Attorney at Bend Law Group; and moderator Gina Cooper, CEO of Cooper Strategies.
I cover the highlights below. Also stay tuned for the video of the session on an upcoming episode of ABC Family’s Startup U:
What cannabis businesses need to know about getting insurance:
What specific liability issues are there for companies not touching the product?
Tax and compliance issues for cannabis businesses:
VC investment in cannabis businesses
What do VCs in this space look for in cannabis startups?
Legal issues specific to cannabis businesses?
What’s next for the industry?
Ambere — “Companies can spend less money by seeking professional advice and support from the get-go rather than waiting to bring in professional services later to clean up mistakes.”
Kram — “On demand services and marketplace models are hot.” Advice: boards of advisors are the biggest help to founders. With the industry changing every day constant learning is most important.
Evan — “Women are the hottest thing in weed right now." Why? “Female heads of household are the ones making medical decisions for the family.” What's not: “the lack of political leadership [on the issue] from Congress.” Tips for founders: “Do background checks on potential business partners.” Being based in a state with full legalization offers benefits in starting up. Even so, be prepared to have to find workarounds for things like getting your logo and trademarks.
David — Advice: Even though cannabis remains illegal at the federal level, that does not mean you can slack when it comes to tax and accounting compliance. Not knowing your obligations related to tax compliance and not keeping good records can expose business owners to significant financial penalties. Don’t try to muddle through this on your own. Seek out professional financial help early and often.
Parting Shots
Right now the biggest challenge cannabis entrepreneurs face in getting into the space is, not surprisingly, the federal government’s stance on legalization. That said, all our panelists underscored the changes taking place and agreed that it is only a matter of time before cannabis is treated like any other product in terms of regulation.
Deborah Adeyanju is Content Strategist & Social Media Manager at Early Growth Financial Services (EGFS), an outsourced financial services firm that provides small to mid-sized companies with day-to-day accounting, strategic finance, CFO, tax, and valuation services and support. Prior to joining EGFS, Deborah spent more than a decade as an investment analyst and portfolio manager with leading financial institutions in New York, London, and Paris. Deborah is also a Chartered Financial Analyst (CFA) charterholder.
What challenges is your cannabis startup facing? Tell us in the comments section below or contact Early Growth Financial Services for financial and accounting support.
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