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HomeFinanceCannabis: Five questions with Sean Linde & Ryan Brandt of Withum

Cannabis: Five questions with Sean Linde & Ryan Brandt of Withum

Sean Linde & Ryan Brandt

Withum

Senior managers, Cannabis Practice team leaders

What aspect of the cannabis industry does your firm specialize in (compliance, growth, distribution, etc.)?

Sean Linde: "With our depth of experience working with operators for nearly a decade, we know the pain points (and there are many). From raising capital to IRS Code Section 280E and the fluidity of federal, state and local regulations, we provide paths to mitigate the challenges. This includes working alongside operators on their tax and audit compliance. Most importantly, it involves us learning each operator’s business from the ground up and identifying the opportunities and pitfalls. Business valuations, antimoney laundering, outsourced accounting and bookkeeping, and cost segregation studies are a few of the areas where we have highly skilled team members providing tailored services."

Tell us something someone new to the industry needs to know – that they probably haven’t thought of?

Ryan Brandt: "The cannabis industry has a rapidly changing and complex tax landscape. It is truly imperative that you are aware of the tax implications at both the federal and state levels. Section 280E of the Internal Revenue Code disallows a great deal of ordinary and necessary tax deductions that other non-planttouching companies are eligible to take advantage of. It is very important to consider the tax implications on your business profits, so you are able to properly forecast cash flow and plan your budget accordingly."

Give us one element or factor that is key to getting a license.

Sean Linde: "The right professional team is a crucial element in securing a cannabis license. Many applicants hire a professional, typically an attorney or consultant, who does not have a primary specialty in cannabis. This often leads to incomplete or inconsistent information in the application and missed opportunities to score higher with the state’s point system. We encourage entrepreneurs to vet their professional team to ensure they truly know the industry before working together on the application. Many local professionals have extensive familiarity with the industry through the legacy medical market in New Jersey, which may serve as one indicator of expertise."

How do you see the industry growing/changing in the next 12 months?

Sean Linde: "Over the next 12 months, we see the industry’s recreationaluse supply chain beginning to take form. Considering neighboring states are a step behind the Garden State, there will be even stronger demand leaning on the state’s growers, which have been capped for the time being. One has to remember there is no interstate commerce in cannabis unless certain federal legislation occurs, so the entire supply chain will be instate. There also will be significant job growth, as we expect many operators will be up and running in 12 months."

Give us your elevator speech: Why should someone hire your firm?

Ryan Brandt: "In forming and managing your cannabis business, you will need to implement a strong infrastructure and compliance program to thrive in this market. Our expertise in manufacturing and distribution, agricultural/ cultivation and retail sectors gives us a unique perspective when advising established and emerging companies in both plant- and non-plant-touching segments of the cannabis industry, including hemp and CBD. Regardless of the size, stage and plans of your company, it is crucial to have a trusted business adviser to listen and to serve your ongoing needs."

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