![]() ![]() Regular physical audits of inventory should be a part of all cannabis organizations that are subject to “seed to sale” tracking as one of the first and principal duties of any cannabis company should be to hold on to its license. Indeed, in many states, accurate usage is linked to licensure which means cannabis companies could potentially lose their license due to a material misstatement. While we wait for states to improve upon their software or even third party solutions to help us integrate, we are expected to accurately input values into these trackers. These softwares are often difficult to use and don’t naturally integrate into most common accounting softwares, making them the bane of our existence. A few benefits your company would get from installing this procedure include more accurate seed to sale tracking, an increased accuracy in your stated cost of goods sold and inventory accounts as well as a better trained and monitored staff.Īs we know, every state with legalized recreational marijuana use requires companies to use state software to track cannabis in its inventory from “seed to sale”. Although it can be a pain, taking both time and money to perform, the behavior it instills in an organization will pay off in spades. So, what are some of the most important internal controls every cannabis company should have?Ī regularly scheduled physical audit of inventory should be a no-brainer in this industry. This could mean developing physical controls, video surveillance, segregation of duties and good old fashioned spreadsheet tie-outs.įor purposes of this article, we’ll take a look at internal controls that secure assets other than cash, Unfortunately, until the SAFE act or a similar piece of legislation passes, cash will require its own series of articles to discuss at length. As we continue to tread the waters of finding reliable merchant services to handle cash receipts in a safe and consistent manner, we must pay extra attention to the account. Traditionally, cash is an account with a great deal of emphasis from an internal controls perspective, but it takes front and center stage in the cannabis industry. Given a large percentage of cannabis companies are funded by external investors, it seems realistic that folks would want assurance that their investment is being correctly monitored.īy far the biggest problem on everyone's mind is cash. A company's internal controls are procedures followed in order to protect the organization's assets. Should they though? Well, ask almost any CPA and the answer would be.almost certainly. Did I mention the rules of compliance can change literally at a moment’s notice? Given their unique situation, it's understandable why cannabis organizations don’t have a robust internal audit team reporting operating inefficiencies to their board of directors. In addition, they are at the mercy of a compliance quagmire consisting of downright conflicting federal, state and local laws. In total, the company is connected to 1 other companies through its directors.Internal controls - what’s the big deal for the cannabis industry specifically? Most cannabis companies are in the early stages of becoming a viable, profitable, long-term business which means the vast majority of their attention is being put to scale their operations. Pandaraparambil Appu Chandran has the largest number of other directorships with a seat at a total of 2 companies. The most recently appointed director is Ezhuthachan Krishnan Narendran, who was appointed on 29 December, 2021. They have been on the board for more than 15 years. The longest serving directors currently on board are Pandaraparambil Appu Chandran, Muralee Balagangadharan Karayil and Vasudevan Valapil Kolangara who were appointed on 08 September, 2007. The company has 5 directors and no reported key management personnel. ![]()
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