Yesterday was one of those days the internet went out of its way to keep me laughing at the world’s silliness. Might just be my sense of humor. Or maybe not, so follow along if you wish to see if you can find a few smiles and laughs. Perhaps it is just that I’ve been following the strangling impact of heavy-handed regulation of new industries that these stories are so funny.
Three discussions: Stoner rabbits, marijuana industry as a service niche for CPAs, and Jr Deputy Accountant is back.
The Utah legislators should vote down the medical marijuana proposal because a lot of bunny rabbits and other cuddly little critters will get stoned.
A Washington Post article tells us DEA warns of stoned rabbits if Utah passes medical marijuana. The agent testified against the bill which would allow so-called medical marijuana in the state. He has a 23 year career with the DEA and says he has spent a lot of time eradicating marijuana fields in the back areas of public lands. In doing so he has noticed wildlife that enjoy partaking of the illegal stuff.
You can find an audiotape of the testimony to the committee here, with his testimony starting at about the 58 minute mark. The stoned rabbit comment is at 1:02.
His comments included the following (my transcript):
The cultivation had left even rabbits that had cultivated a taste for the marijuana, where one of them refused to leave us, and we took all the marijuana around him, but his natural instincts to run were somehow gone.
Stoner rabbits as a factor in the medical marijuana debate. Check it out at the 1:02 mark.
(Hat tip @SamAntar.)
Helping CPAs develop a niche to serve the marijuana industry
The AICPA will have a webinar on March 5 to help CPAs assess whether to develop a niche to serve the newly legal marijuana businesses that will be growing (sorry!) in Washington, Colorado, Alaska, Oregon, and D.C. in the next months and years.
Seriously. A webinar on starting a marijuana service niche. This isn’t an April 1st report.
A few of the concerns to be addressed in the webinar: ethics, professional liability, tax compliance, other tax issues, audit & attest issues.
(Hmmm. How do you assess going concern when there is an unmeasurable possibility that a federal raid could shut down your client on any random day in the next year? What’s the contingency note look like when your client announces to the world they are breaking federal law and note 1 to the financials declares the same?)
The promo links to another article: An Issue Brief on State Marijuana Laws and the CPA Profession. The article has 12 pages of double-spaced discussion of the legal background and risks of serving this market.
Here are a few things you might want to think about, according to the article:
Good moral character – It is unknown how working with a client that knowingly breaks federal law would intersect with the requirement for a CPA to have ‘good moral character’ for getting or renewing a license. The risk is some boards of accountancy might have concerns, either today or after headlines hit.
Acts discreditable – Providing services to a client who is breaking federal laws could be considered an act discreditable to the profession. Trip over that issue and you can get mildly disciplined, suspended, or maybe even lose your license.
That might be an even bigger issue if your client somehow manages to offend the feds, gets busted, convicted, and sentenced to many years in federal prison, as happened to the owner of a dispensary in Upland California a couple of years ago.
Many banks are avoiding marijuana businesses because the feds consider that helping people who are breaking federal law launder their drug money is a bad thing. Advising clients about tax strategy or how to conduct business outside the banking system could get a CPA in trouble if the client gets in trouble.
Giving too many good ideas might draw attention from an Assistant US Attorney who drops that ‘conspiracy’ word into the discussion with your client. See also previous two points re: good moral character and acts discreditable.
Catch 22 – Paper points out that New Mexico regs for medical marijuana dispensaries requires the dispensaries to have an audit. A CPA asked the state regulator for advice, who asked the board of accountancy for advice on how the CPA should handle the audit. The board declined to give permission to conduct such an audit since they do not have authority to do so.
Think through what that does to your regulatory exposure and legal liability.
The Arizona board had no suggestions other than to advise CPAs to conduct a risk assessment to determine if they wished to provide services to dispensaries.
Other questions – The issues paper closes with eight questions a CPA might ask.
Some ideas include pondering the risk the DEA will go after your potential client, considering the risk of the firm being prosecuted, assessing chances of being sanctioned by the state board or even lose licenses, and pondering the impact on malpractice insurance and legal liability.
(Maybe it is just my cautious nature, but if the question were to arise whether I might get prosecuted for serving a particular client, there is no need to even consider the answer.)
It’s up to you, but you might want to give those questions several minutes of really serious thought.
The entire paper is presented in the calm, straight forward manner you would expect from the AICPA. There is no hint of rolled eyes and no suggestion of are-you-really-still-giving-this-serious-consideration sarcasm anywhere.
If you still need help in making your risk assessment, feel free to check out the webinar. Might get some good ideas.
If after considering all those issues you can find some way to conclude there is reasonable risk, feel free to jump into the market. Go ahead – plant and cultivate a marijuana service niche.
If that is your conclusion however, you might want to revisit your assessments after you sober up.
(Hat tip Going Concern)
Junior Deputy Accountant is back
Just when I thought it couldn’t get any funnier, Jr Deputy Accountant sent out a tweet announcing she is back. Be advised she is neither junior, nor a deputy, nor an accountant.
Oh yeah. One more thing. She also tends to have a potty mouth. Consider yourself warned.
Before she took a break for cat rescue and actually getting paid for smarty pants writing on the ‘net, she was in a one-woman battle against the Fed’s foolishness. She considered ridiculing Ben Bernanke one of her main goals in life.
The announcement of her return suggests to me that Janet Yellen will soon be the recipient of plenty of ridicule, abuse, sarcasm, and somewhat impolite NSFW cartoons.
Oh, another thing. Don’t cross her. And don’t threatened her. You really, really don’t want to do that.
For an entertaining illustration why you ought to stay on her good side, check out my post from November 2012: Today’s illustration of why it’s such a bad idea to pick a fight with someone who buys pixels by the terabyte.
So yesterday this fun internet thing provided me lots of laughs and entertainment along with the promise of more to come.
Just had another thought for the CPAs out there. If the marijuana service niche is just a bit too risky and you want to back your exposure down just a smidgen, there are still lots of options to expand your audit practice that can keep you awake at night. Think about an SEC or pension audit niche. Maybe retailers in China planning on a reverse-merger. (For the non-accountants, those are a few main areas where CPAs are getting into lots of trouble.)