CJBS intricately understands the tax and accounting challenges of state-legal medical and adult-use cannabis businesses–and we are here to serve as your partner in navigating those challenges. The cannabis industry is unique, as is your business. That’s why the CJBS Cannabis Team is focused on tailoring solutions to meet your company’s needs.
Whether you operate as a new or established cannabis cultivator, processor, and/or retail dispensary, our experts are here to help you grow and scale your business in today’s ever-competitive environment.
Michigan was the first state in the Midwest to legalize both medical and adult-use cannabis in 2018. Michigan also allows for home growing of cannabis (up to 12 plants).
In 2022 alone, Michigan generated $2.3B in cannabis sales, and is now the nation’s second largest cannabis market.
Cannabis Taxes in Michigan
Cannabis in Michigan is subject to state sales tax. The state of Michigan once allowed for caregivers to grow cannabis, who sold directly to medical patients; however, this program was phased out in 2020. Currently, licensing is unlimited in Michigan; however, due to current supply and demand, a cultivation (grower) licensing moratorium is being weighed.
Consumers who purchase adult-usecannabis from Michigan retailers and microbusinesses must pay a 10% excise tax, in addition to the state’s standard 6% sales tax, as the exemption for food or food ingredients or for drugs legally dispensed by prescription does not apply.
Medical cannabis users in Michigan are required to pay a 6% sales tax on every purchase, as cannabis and cannabis-derived products for medical patients are not eligible for the exemptions for drugs for human use legally dispensed pursuant to a prescription or for food or food ingredients. However, patients do not have to pay an excise tax on medical cannabis.
Seeking For Financial Solutions? We Can Help.
If you’re thinking, “Cannabis taxes get complicated and add up quickly,” you’re not alone. That’s where we come in.
The CJBS team has deep experience in medical and adult-use cannabis tax laws and accounting in the Detroit, Lansing, Southwest Michigan area and throughout the rest of the state. Working hand-in-hand with our cannabis clients, we provide a full suite of services—including compliance expertise, tax-saving solutions, and business strategies—to help you plan for long-term success.
Cannabis in Michigan FAQs
When do I need to hire a cannabis accountant in Michigan?
In the cannabis industry, it is always better to be proactive, rather than reactive. To help prevent your business from costly fees or even greater penalties, you should hire an accountant as soon as you submit your application for licensure.
Are there any financial requirements in the adult-use Michigan license application?
In Michigan, growers of cannabis are subject to a $3,000 application fee, as well as tiered licensing fees. ($4,000 for Grower Class A; $8,000 for Grower Class B; and $12,000 for Grower Class C).
Processors are subject to a $3,000 application fee and a $24,000 licensing fee.
Dispensaries are subject to a $3,000 application fee, and a $15,000 licensing fee.
Secure transporters are subject to a $3,000 application fee, and a $15,000 licensing fee.
Secure compliance facilities are subject to a $3,000 licensing fee, and a $15,000 licensing fee.
What types of tax deductions can cannabis businesses take?
Cannabis businesses are very limited on the types of deductions they can take beyond cost of goods sold (COGS) because of IRS Tax Code Section 280E. In some instances, businesses will be able to take additional deductions, such as the research and development (R&D) tax credit, for example. Nuances like these illustrate why it is important to work with an accountant that is up to date on cannabis tax laws.
Our Core Values Guide Everything We Do
Our three core values — Trust, Collaboration, and Creativity — guide everything we do at CJBS, from our innovative client work to our interactions with each other. Our team has diverse personal backgrounds and specialties, but we share a common culture rooted in these values.
Trust
Trust is essential to all our work, but the stakes can be especially high for cannabis businesses, which face a higher risk of bankruptcy and IRS audits.
Collaboration
Close collaboration with our clients, matched with consistent and proactive communication, ensures that we’re always providing you with the insights, tools, and tactics for your cannabis tax and accounting needs.
Creativity
Creativity allows us to solve our cannabis clients’ unique challenges, such as having few traditional banking options and no bankruptcy protection.
Integrity
Our firm is guided by our employees’ integrity. In a burgeoning industry like cannabis, it is more important than ever to hold ourselves to high ethical standards, and follow through on what we say we’re going to do.
Transparency
We operate with transparency by communicating to our cannabis clients with unwavering candor, honesty, and respect.
Your Cannabis Accounting Expert
Matt Bergman, CPA and CJBS senior partner, has been with the firm since 1997 and has specialized in cannabis accounting and tax services since 2015, when an existing client won a license under the Illinois medical cannabis pilot program. Matt worked hand in hand with them to help grow and scale their business, safely and efficiently. That business grew rapidly and was soon acquired by one of the country’s largest MSOs (multistate operators), and they remain a CJBS client to this day. Matt works with clients from small startups to the country’s biggest MSOs. After growing up in Deerfield, IL and Boston, MA, Matt lives in Wilmette, IL with his wife, two children, and three dogs.
Ryan Guedel, CPA and CJBS partner, has been with the firm for 10+ years, and currently works with clients in cannabis, real estate, manufacturing, construction, and distribution. Ryan coordinates due diligence engagements, carries out audits and reviews, and works on business development and taxation for the firm. A devoted professional, Ryan gives his all with each and every client interaction. His personal motto is “hard work and more hard work.” Ryan currently resides in Wheeling, Ill., with his wife Julie, son Cole Jameson, and rescue dog Pinky. He likes the area for its proximity to the CJBS offices. His hobbies include cheering on the NY Yankees, mixed martial arts, and motorsports.
Stay current on the latest Cannabis industry developments and find out what it means for you and your business.
Opportunities and Challenges of the Illinois Cannabis Market in 2025
Opportunities and Challenges of the Illinois Cannabis Market in 2025
Illinois has cemented its place as one of the leading cannabis markets in the U.S. As of 2024, the state continues to showcase remarkable growth, with cannabis retail sales surpassing $1 billion by July 1—a milestone achieved nearly two weeks earlier than the previous year, reported Ganjapreneur. The Illinois Department of Financial and Professional Regulation
Ohio’s Cannabis Market 2024: Opportunities and Challenges
Ohio’s Cannabis Market 2024: Opportunities and Challenges
After legalizing adult-use cannabis in the November 2023 election, Ohio began adult-use (non-medical) cannabis sales on August 6, 2024. Since launching, Ohio’s new adult-use cannabis market has seen robust growth, with nearly $90 million in sales recorded in the first seven weeks, and a total of $155 million at the time of this writing. The
New Jersey Cannabis Market Overview: Insights for Cannabis Businesses in 2024
New Jersey Cannabis Market Overview: Insights for Cannabis Businesses in 2024
New Jersey’s cannabis market is experiencing remarkable growth, marked by a substantial 38% increase in adult-use sales between Q1 of 2023 and Q1 of 2024, according to NJ.gov. Sales for the first quarter of 2024 alone topped $201 million, and experts predict that the market could surpass $1 billion by year’s end. With more than
Missouri Cannabis Market Overview: Insights for Cannabis Businesses in 2024
Missouri Cannabis Market Overview: Insights for Cannabis Businesses in 2024
The Missouri cannabis market has experienced significant growth since the legalization of medical cannabis in 2018 and the launch of adult-use cannabis in early 2023. In 2023, Missouri’s legal cannabis market size was estimated at $1.44 billion, according to Grand View Research, and “is expected to grow at a compound annual growth rate (CAGR) of
Top Cannabis Industry Events to Attend in Q4 2024
Top Cannabis Industry Events to Attend in Q4 2024
If you’re looking to stay ahead in the fast-growing cannabis industry, these must-attend events in 2024 offer invaluable opportunities to network with industry leaders, gain insights, and keep up with the latest trends shaping the market. In this new, complex, rapidly growing, and still federally illegal industry–in-person connections with industry peers are essential for plant-touching
Data Security Tips for Licensed Cannabis Operators
Data Security Tips for Licensed Cannabis Operators
Data security is important from the very beginnings of your cannabis business. That’s because: – Cyberattacks are rampant in the industry – Operators must stack multiple third-party integrations, making them vulnerable – They have to be compliant with regulations to protect customer information (such as HIPAA) and – Cannabis businesses are criticized more often for
How CJBS Helps Windy City Cannabis Make Quick and Experience-Driven Decisions
How CJBS Helps Windy City Cannabis Make Quick and Experience-Driven Decisions
In the early days of Illinois medical cannabis legalization, licensed cannabis retailer Windy City Cannabis needed assistance in setting up their business for success during the growth of the medical market, and eventually, the launch of the state’s adult-use market. Windy City’s former parent company–while growing rapidly–didn’t have a dedicated in-house finance department, so they
Is Your Cannabis Tax Credit Worth a Higher Likelihood of Being Audited?
Is Your Cannabis Tax Credit Worth a Higher Likelihood of Being Audited?
Taking credits can raise flags with the IRS–and audits can be time-consuming and costly. Here’s what to consider before opting to save a little extra at tax time. Should you take a tax credit if it means your cannabis business will have a greater chance of being audited? “It depends,” says CJBS Partner Ryan Guedel,
16 Tax Tips for Cannabis Operators in 2023
16 Tax Tips for Cannabis Operators in 2023
A comprehensive round-up of tax pointers for plant-touching businesses in the cannabis industry from CJBS Senior Partner Matt Bergman, CPA. Cannabis’s federal illegality and stringent regulations for state-legal businesses make taxation in the cannabis industry difficult to navigate–and that’s an understatement. CJBS Senior Partner Matt Bergman, CPA, knows these complexities well, having operated in the
How Cannabis Operators Can Improve Their Data Security
How Cannabis Operators Can Improve Their Data Security
Internal controls are procedural safeguards put in place to protect access to financial information and transactions. Setting up internal controls is critical for any business to prevent fraud, but it is even more important for cannabis operators–as the industry is especially susceptible to fraud. We discuss internal controls in detail in this webinar with Partner
Adult-Use Cannabis Is Now Legal in Minnesota: Here Are Some Business and Financial Tips for Hopeful Operators
Adult-Use Cannabis Is Now Legal in Minnesota: Here Are Some Business and Financial Tips for Hopeful Operators
On May 30, Minnesota joined 22 other U.S. states in legalizing adult-use cannabis. Building off of a strict medical cannabis program with only two operators and 15 dispensaries, hopeful cannabis business owners will have the opportunity to enter an uncapped license market to provide adult-use cannabis to adults aged 21 and older. By 2027, annual
Cannabis Fraud Prevention: Internal Controls Businesses Should Never Operate Without
Cannabis Fraud Prevention: Internal Controls Businesses Should Never Operate Without
The cannabis industry is especially susceptible to fraud, not only because of the stigma the industry still faces, but also because state-legal businesses are still so new and are growing quickly. Yet when fraud hits your business, it can be devastating to your finances as well as your reputation. Fortunately, there are steps you can
Proper Internal Controls Are Key to Preventing Cannabis Industry Fraud
Proper Internal Controls Are Key to Preventing Cannabis Industry Fraud
Here, we outline ways your cannabis business can safeguard against internal and external fraud attempts. Cannabis is still a nascent industry—yet cannabis businesses throughout the United States have already seen their fair share of fraud. You may have heard the stories of internal theft, duped investors, cyberattacks, or inflated THC percentages on lab tests—the list
Your Cannabis Business Tax Planning Checklist
Your Cannabis Business Tax Planning Checklist
As the cannabis industry continues to grow, so does the need for proper tax planning. With constantly changing regulations and laws, it can be challenging for cannabis companies to stay up-to-date on their tax obligations. To ensure your cannabis company is maximizing their tax benefits while minimizing your liabilities, here is a comprehensive tax planning
How Cannabis Businesses Can Navigate Tax Season
How Cannabis Businesses Can Navigate Tax Season
Navigating tax season in a federally illegal industry can be complicated. The CJBS Cannabis Practice Team is here to help. In this 20-minute webinar recorded in February 2023, CJBS Senior Partner Matt Bergman, CPA and LKP Impact Consulting Principal Laurie Parfitt discuss what cannabis businesses need to know as they structure their business and prepare
Matt Bergman and Ryan Guedel: Cannabis CPAs Who Care
Matt Bergman and Ryan Guedel: Cannabis CPAs Who Care
CJBS’ Cannabis practice isn’t simply an add-on service to our accounting firm. We are deeply committed to helping cannabis business owners succeed in this emerging, challenging, and quickly evolving industry. Our team is immersed in this space, not only in Illinois’ medical and adult-use markets, but throughout the country. We’re constantly networking with industry leaders,
How CJBS Customizes Solutions For Your Cannabis Business
How CJBS Customizes Solutions For Your Cannabis Business
Whether you’re just starting out in the cannabis industry or are a multi-state operator — and whether you’re a cultivator, processor, or dispensary — our experienced cannabis experts tailor solutions to your specific challenges. Learn more from Matthew Bergman, CPA and Senior Partner below.
Growing Your Cannabusiness: Boosting Operational Efficiency — and Your Bottom Line
Growing Your Cannabusiness: Boosting Operational Efficiency — and Your Bottom Line
If you work in the cannabis business, you already know how fast-paced and complicated the industry is. Contending with tricky tax law and a high risk of IRS audits, along with limited banking options, are some of the constant challenges. One challenge you might not be aware of is just how fast your cannabusiness is
How CJBS Helps Your Cannabusiness Manage Your Challenges
How CJBS Helps Your Cannabusiness Manage Your Challenges
Dear Clients & Friends, There’s no doubt that cannabis is a big business, and the industry continues to grow by leaps and bounds. A recent study forecasts that legal cannabis sales in the U.S. will reach $43 billion by 2025. Also by 2025, 42% of the total annual U.S. demand is projected to be met
Legal marijuana has gone mainstream, and the cannabis industry is experiencing a boom that shows no signs of slowing down anytime soon. In 2020, global cannabis sales reached $19.7 billion. In the U.S. alone, sales hit a record $17.5 billion last year, according to cannabis market research leader BDSA. Despite those huge numbers — and the
