Get cannabis-specialized accounting that tracks profit by product, integrates with your POS, and gives you CFO-level guidance—so you can make confident decisions and maximize your margins.
We'll help audit-proof your Michigan dispensary, stay 280E compliant, and seamlessly integrate cost accounting with your Metrc tracking and cannabis POS systems—so you can focus on growth, not compliance headaches.
Work with us for Michigan cannabis specialization: Metrc integration, Dutchie/Cova/Flowhub connectivity, 280E accounting, and CFO guidance—without $95K+ controllers, internal teams, or Detroit firms lacking cannabis expertise.
We love helping Michigan dispensaries and cannabis companies establish perfect cannabis accounting, 280E compliance, and real profit tracking while ensuring complete tax compliance.
If you're searching for a cannabis CPA in Michigan, you've likely discovered that most traditional accountants either refuse cannabis clients entirely or lack the specialized knowledge to properly serve Michigan dispensaries. Michigan's cannabis industry—generating $1.9 billion in annual sales with 12.8% year-over-year growth—demands accounting expertise that goes far beyond standard bookkeeping. Your Michigan cannabis business operates in a complex regulatory environment with Michigan Metrc compliance requirements, IRS Section 280E tax restrictions, and a sophisticated technology ecosystem that traditional CPAs simply don't understand. Whether you're running a dispensary in Detroit, Grand Rapids, Ann Arbor, or Lansing, you need a Michigan cannabis accounting specialist who understands the intersection of state tracking systems, cannabis POS integration, and federal tax compliance.
Michigan dispensaries face accounting challenges that don't exist in any other industry. Unlike traditional retail businesses, your Michigan cannabis operation must integrate financial data with Metrc's seed-to-sale tracking system, which Michigan implemented in December 2017. Every plant receives a unique RFID tag with a 24-digit identifier that follows the product from cultivation through final retail sale. Your accounting system must reconcile perfectly with Metrc data—if your books show $550,000 in flower sales but Metrc reflects $548,000, you have a compliance discrepancy that could trigger state audits, IRS scrutiny, or jeopardize your Michigan cannabis license. Most Michigan bookkeepers treat Metrc as a separate compliance issue and never reconcile financial records with tracking data. This creates hidden liabilities that surface during audits, due diligence for acquisitions, or when seeking capital investment. A specialized Michigan cannabis CPA ensures your QuickBooks data, POS sales reports, and Metrc inventory tracking all align monthly.
Section 280E is the single most impactful tax provision affecting Michigan cannabis businesses. Passed in 1982, IRC Section 280E prohibits businesses trafficking in controlled substances from deducting ordinary business expenses. Since cannabis remains federally illegal as a Schedule I substance, Michigan dispensaries cannot deduct rent, utilities, payroll, marketing, or any operating expense—only Cost of Goods Sold (COGS). This means Michigan cannabis businesses face effective tax rates of 60-75% on gross profit instead of the 21% corporate rate other businesses pay. Proper 280E cost accounting requires absorbing every possible cost into COGS: growing stage labor, trimming, packaging, proportion of facility costs, utilities, water usage—everything that directly touches inventory. A Michigan cannabis CPA specializing in 280E compliance can save your dispensary $50,000-$150,000 annually through proper cost accounting methodology while ensuring you're audit-ready when the IRS comes calling—which approaches 100% probability for Michigan cannabis businesses.
Michigan dispensaries typically use one of several cannabis-specific POS systems that integrate directly with Metrc. Unlike Square or Toast, cannabis POS systems like Dutchie POS, Cova Software, Treez, Flowhub, and BLAZE are built specifically for cannabis compliance. These systems handle age verification, purchase limits, Metrc package tracking, inventory management, and real-time reporting to Michigan's regulatory database. However, most Michigan dispensaries struggle with the integration between their POS system and accounting software. Sales data must flow from your POS into QuickBooks or Xero, reconcile with Metrc inventory changes, and align with your 280E cost accounting structure. Specialized cannabis bookkeeping establishes chart of accounts that track sales by product type (flower, pre-rolls, vape cartridges, edibles, concentrates), by sales channel (in-store, Leafly, Weedmaps, Jane, delivery), and by location for multi-store Michigan operators. This product-level and channel-level profitability tracking reveals which products and channels actually generate profit versus which destroy margins—intelligence your competitors likely don't have.
Michigan cannabis operators who only get annual tax returns are flying blind 11 months per year. You're making critical business decisions—hire more budtenders or cut staff? Expand product lines or focus on top sellers? Invest in Leafly advertising or boost in-store experience?—without financial data to inform those choices. Monthly financial statements provide product-type profitability analysis (are edibles profitable or are vape cartridges subsidizing them?), channel profitability (is Weedmaps driving profitable sales or just expensive traffic?), cash flow projections, and early warning systems for margin compression, inventory shrinkage, or compliance issues. Fractional CFO services for Michigan cannabis businesses include monthly financial review calls to discuss performance trends, quarterly business planning sessions, and strategic financial modeling for growth decisions. This isn't administrative overhead—it's competitive intelligence that compounds over time. While competitors guess at strategy, you make data-driven decisions that optimize capital allocation and accelerate profitable growth.
The most catastrophic mistake Michigan cannabis businesses make is treating 280E like a tax-time problem instead of a daily operational requirement. Your cost accounting system must track COGS in real-time, not reconstruct it in April when preparing tax returns. Common 280E errors we see in Michigan include: deducting trimming labor as operating expense instead of capitalizing into COGS; failing to allocate facility costs proportionally to growing areas; not capturing packaging materials and labels in product costs; deducting delivery vehicle expenses as transportation instead of capitalizing delivery labor into COGS; taking meals and entertainment deductions (absolutely prohibited under 280E); and improperly segregating "non-plant-touching" revenue like branded merchandise or cannabis accessories. Michigan dispensaries attempting creative structures—like having separate LLCs where one "sells cannabis" while another "provides management services"—face IRS scrutiny and tax court challenges. The tax courts consistently rule that operating a single trade or business subjects all revenue and expenses to 280E restrictions regardless of entity structure. Proper 280E compliance requires cannabis-specific expertise, monthly review of expense classifications, and documentation proving every dollar capitalized into COGS flows through proper cost accounting methodology.
Most Michigan dispensaries track total revenue and call it a day. They have no idea if flower sales are profitable, whether pre-rolls subsidize vape cartridges, or if edibles destroy margins once Metrc compliance costs and packaging expenses are factored in. Product-level profitability tracking requires QuickBooks account structure separating revenue by product type (flower, pre-rolls, vape carts, edibles, concentrates, tinctures, topicals, accessories), COGS accounts for each product type, and class tracking for sales channels (in-store, Leafly, Weedmaps, Dutchie ecommerce, delivery). Then you need shared cost allocation methodology: rent, utilities, and facility expenses must be allocated proportionally. Marketing expenses should be attributed to channels where possible. Labor costs split between product-touching roles (capitalized to COGS) and non-product roles (operating expenses, though still non-deductible under 280E). This produces profit and loss statements showing gross margin by product type, net revenue by channel after platform fees, and true profitability of each revenue stream. Sophisticated Michigan cannabis bookkeeping delivers executive dashboards with this intelligence monthly, empowering you to discontinue unprofitable products, invest in high-margin offerings, and optimize your Michigan dispensary's product mix strategically.
Michigan dispensaries doing $4-6 million in annual sales typically invest $2,500-$4,000 monthly for comprehensive cannabis accounting services including monthly bookkeeping, 280E cost accounting, Metrc reconciliation, product-level profitability tracking, monthly financial review calls, and quarterly business planning sessions. Annual tax return preparation adds $3,000-$5,000 depending on complexity. Compare this to alternatives: hiring a full-time in-house controller costs $75,000-$95,000 in salary and benefits but lacks cannabis-specific expertise and 280E knowledge. Generic bookkeepers charging $1,500/month might save money but typically make costly 280E mistakes, fail to track product profitability, don't maintain audit readiness, and can't provide strategic CFO guidance. Large regional CPA firms may charge $5,000-$8,000 monthly but often rush work, lack true cannabis specialization, and treat you as a small account. Specialized Michigan cannabis accounting firms deliver expertise, strategic guidance, audit defense, and exit preparation that pays for itself many times over. If proper accounting helps you avoid one $50,000 audit penalty, improve margins 2-3% through better decision-making, and position for a sale that adds 10-20% to your valuation, the return on investment is exponential.
The ideal time to engage a cannabis CPA is before you start operations—during license application and facility buildout. Early engagement ensures your accounting system, chart of accounts, cost accounting methodology, and technology integrations are established correctly from day one. Many Michigan dispensaries hire generic bookkeepers initially to "save money," then discover six months into operations that their books are a disaster, 280E compliance is wrong, and they need to pay a specialized firm to clean up the mess and reconstruct cost accounting retroactively. This costs more than doing it right initially and creates unnecessary risk during Michigan Cannabis Regulatory Agency audits. If you're already operating, the second-best time is immediately—before tax season creates deadline pressure, before compliance issues compound, and while there's time to implement proper systems. Michigan's cannabis market is maturing rapidly, with larger operators, private equity, and multi-state operators increasingly active in mergers and acquisitions. Cannabis-specialized accounting ensures you're always ready to raise capital, respond to acquisition opportunities, or refinance debt because your financials are pristine, your 280E compliance is defensible, and your business intelligence demonstrates operational excellence that commands premium valuations in Michigan's competitive cannabis marketplace.
Cannabis & 280E Tax & Accounting Specialist.
Adam Drust CPA
