Running a marijuana dispensary requires in-depth knowledge of the local laws and meticulous recordkeeping including retaining copies of each cannabis receipt.
Running a medical or retail marijuana dispensary requires in-depth knowledge of the local laws and meticulous recordkeeping including retaining copies of each cannabis receipt. As of April 2017, 29 states have legalized medical marijuana, which can be used to treat several illnesses, including multiple sclerosis, HIV/AIDS, inflammation, pain, mental disorders and substance abuse, among others. In addition, 9 states have legalized recreational use. That means cannabis retailers are legally operating in more than half of the U.S.
Their businesses can be very different, however, depending on the states in which they are located. One difference is startup costs. For example, annual licensing fees range from $3,000 in Colorado to $75,000 Connecticut. States may also require a minimum of liquid capital, some places as high as $250,000, so it’s imperative you protect your investment with perfect recordkeeping of every transaction. Retaining a copy of every cannabis receipt ensures your dispensary follows state and local laws and protects your business in the event of an audit.
What should the receipt include? How can you prove your business is operating in compliance with state and local laws? The cannabis receipt provided to the customer proves you are collecting all the relevant taxes and dispensing marijuana legally.
If you are considering opening a marijuana dispensary or you want to make sure your business is operating in compliance with your state’s laws and make sure you are correctly formatting and recording cannabis receipts, your point of sale (POS) system is the perfect tool to manage this requirement.
1. Check the Specific Requirements in Your State
Understand your state’s tax laws to ensure you are charging the correct amount. For example, in California, retailers charge a consumer-excise and sales tax, while in Colorado, cannabis is subject to different taxation, whether it’s classified as medical or retail marijuana. It’s important to stay up to date on changing tax laws to ensure you are collecting the correct percentage. Failure to comply could subject your business to fines and added scrutiny.
2. Manage Copies of Cannabis Receipts
Use your POS system to send a backup copy of each cannabis receipt to the cloud or store the backup offsite. If you are issuing receipts with carbon copy paper, staple or clip the receipts together. It’s also a good idea to keep important financial records, licensing information and other sensitive financial paperwork in a secure place outside of the dispensary. Retain all records for a minimum of three years in case of an audit.
3. Include All Required Information on the Cannabis Receipt
Although the exact information you include will depend on your state’s laws, most receipts will include store name and address, the category of taxable products or product category name/product name. Receipts should also include a code or other identifier for the product’s taxes. There may be additional requirements, however. In Oregon, it’s required to list the sale subtotal before tax, amount of state tax, local tax, total sale amount and identifying receipt number. A disclaimer stating that receipts are required for customer tax disputes is also required.
The cannabis industry is promising for dispensaries, but it is tightly regulated by the states where marijuana has been legalized. Give your business the best chance for compliance and success with a POS system equipped with state-of-the-art printers to meet regulatory requirements while providing convenient customer experiences at the checkout.
Contact the experts at Star to learn more about ideal solutions for the cannabis industry.