As the cannabis industry grows, businesses realize that tax compliance is one of the most challenging hurdles to overcome. The web of regulations is vast and confusing, inventory must be tracked meticulously, and failure to comply can mean crippling penalties or loss of license. That’s why every plant-touching cannabis operator needs Monarch – the leading tax software purpose-built for the industry. This article will explore the critical reasons cannabis firms need Monarch to master tax compliance and focus on growth.

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Automation to Conquer Complex Cannabis Taxes

Between state, municipal, and special district taxes, cannabis businesses must manage a mosaic of complex tax obligations. For example, California levies state excise taxes, cultivation taxes, and sales tax – plus local jurisdictions can add their taxes on top. Rates vary based on product type, potency, and more. Manually calculating these cannabis taxes is hugely cumbersome and error-prone. Monarch automates the entire process via flexible tax engines, saving businesses time and ensuring accuracy.

Tax Automation Use Cases

Monarch enables cannabis firms to automate an array of complex tax calculations and workflows:

  1. Multi-tiered excise taxes at state, county, and city levels
  2. Cultivation taxes on flower, trim, biomass
  3. Sales tax exemptions for medical cannabis
  4. Taxes based on potency tiers for concentrates
  5. Credits and incentives by jurisdiction
  6. Custom tax holiday configuration
  7. Tax liability management and payments

This level of automation is a game-changer, providing accurate taxes in seconds versus hours of manual work.

Compliance Monitoring and Reporting

Meticulous compliance reporting is mandatory in the cannabis industry. Monarch facilitates real-time reporting of inventory, sales, and taxes owed directly to state regulators. The platform also monitors license renewals, bond requirements, and changing regulations across multiple entities so businesses stay compliant. Robust transaction matching ensures all product movements and taxes are properly reconciled.

Automated Compliance Workflows

Key compliance workflows automated by Monarch include:

  • Scheduled report and return filings
  • Tax payments on custom cadences
  • Traceability system integrations
  • Inventory and adjustment reconciliation
  • Multi-location and multi-entity consolidation
  • Auditing, transaction logs, and change management

This prevents missed deadlines, delays, and penalties to keep businesses running smoothly.

Consolidated Multi-Entity Management

Many cannabis companies have multiple business entities under one umbrella. Monarch enables users to manage tax workflows across unlimited related entities or locations seamlessly. Real-time roll-up reporting provides a consolidated view of the entire enterprise for efficient management and strategic decision-making.

Unified Data Across the Cannabis Supply Chain

By consolidating data enterprise-wide, Monarch provides actionable insights such as:

  • Real-time visibility into sales trends across dispensaries
  • Inventory status across cultivation facilities
  • Profitability analysis by product lines
  • Identifying high vs low-performing entities
  • Optimizing distribution and supply planning

This enables data-driven decisions to maximize operational and financial performance.

Integrations with State Tracking Systems

To meet mandates like “seed-to-sale” tracking, cannabis software must integrate directly with state regulatory systems like Metrc. Monarch offers out-of-the-box integrations to sync inventory, and sales, and transfer data bi-directionally. This prevents duplicate data entry and ensures inventory and taxes are accurately tracked.

Seamless Reporting and Reconciliation

Thanks to real-time data syncing with Metrc and other systems, Monarch enables:

  • Automatic harvest, sale, and transfer reports
  • Effortless inventory reconciliations
  • Accurate tax calculations using validated data
  • Early warning of discrepancies before audits
  • Compliance peace of mind across the supply chain

This interoperability delivers tremendous efficiency and accuracy benefits.

Cannabis Tax Experts

Taxes in the cannabis industry are extremely nuanced. Monarch provides ongoing advisory services from CPAs and attorneys specialized in cannabis tax law. Customers benefit from expert guidance on topics like the 280E tax code, excise taxes, deductions optimization, and more. Monarch experts also proactively monitor regulatory changes.

Proactive Guidance and Education

Specific advisory services that Monarch provides include:

  • Monthly tax planning and strategy calls
  • Consultations for tax minimization strategies
  • Guidance on new tax regulations and impacts
  • Tax calculators and reference documents
  • On-demand support for complex tax questions
  • Proactive notifications on regulatory changes
  • Access to extensive cannabis tax resources

These services alleviate key pain points for cannabis tax professionals.

Monarch provides the tax automation, compliance tools, integrations, and expertise cannabis businesses need to thrive. To see how Monarch can solve your biggest tax headaches, schedule a demo today at www.monarch.is.