Financial reporting for cannabis in Delaware has become the single biggest risk for licensed operators. One small mistake with IRS Section 280E or Office of the Marijuana Commissioner (OMC) submissions can cost six-figure penalties or even license revocation.
This is the exact financial reporting system top Delaware cannabis cultivators, manufacturers, and retailers use today to stay 100% audit-proof — without needing a full-time CFO.
What Are the Financial Reporting Requirements for Cannabis in Delaware?
As of November 2025, every Delaware cannabis licensee must submit:
- Quarterly unaudited financial statements – due 45 days after Q1, Q2, and Q3
- Annual audited financial statements – due 90 days after year-end (required for most cultivation and manufacturing licenses)
- 100% Metrc-to-general-ledger reconciliation (available on demand)
- Delaware gross receipts tax returns – monthly or quarterly (15% on retail sales)
Official source: Delaware Office of the Marijuana Commissioner – Financial Reporting Guidelines
How Delaware Cannabis Businesses Survive IRS Section 280E
Because cannabis is still federally Schedule I, Section 280E disallows all ordinary business deductions. The only deductible expense for financial reporting in cannabis in Delaware is Cost of Goods Sold (COGS).
Top operators aggressively (and legally) push 65–80% of total costs into COGS — things like plant-touching labor, nutrients, trim, testing, and packaging. Everything else (rent, marketing, indirect salaries) is non-deductible and added back to taxable income.
Step-by-Step Financial Reporting System for Cannabis in Delaware
1: Set the Correct Reporting Schedule
| Report Type | Frequency | Submitted To | Deadline |
| Internal P&L & Balance Sheet | Monthly | Owners / Investors | 15th of following month |
| Gross Receipts Tax | Monthly or Quarterly | Delaware Division of Revenue | 20th of following period |
| Metrc Reconciliation | Weekly + Monthly | Internal + OMC on request | Ongoing |
| OMC Financial Statements | Quarterly + Annual | Office of the Marijuana Commissioner | Q1–Q3: 45 days after quarterAnnual: 90 days |
| Federal Tax Return (1120) | Annual | IRS | April 15 (or extension) |
Pro tip for financial reporting cannabis Delaware: Run full monthly 280E-adjusted books even when the state only requires quarterly submissions.
2: Track the KPIs OMC and IRS Actually Audit
- True COGS percentage (target 65–80%)
- Inventory turns (8–12× per year)
- Wet-to-dry yield ratios
- Revenue per square foot or per register
- Labor as % of revenue (keep under 20% – non-deductible)
- Cash vs. cashless payment mix
3: Build Properly Structured 280E Financial Statements
- 280E-Adjusted Income Statement Revenue − COGS only = Gross Profit (this is your taxable income) All operating expenses listed separately below the line for management use
- Balance Sheet Requirements
- Separate Metrc inventory categories (Plants, Finished Goods, Waste)
- Prepaid gross receipts tax asset
- 280E deferred tax liability
- Cash Flow Statement – essential when 280E creates huge tax bills despite low cash
4: The Delaware Cannabis Tech Stack Top Operators Use
| Function | Recommended Tool | Why It Works for Delaware |
| General Ledger | QuickBooks Online + Flourish | Native Metrc sync + 280E cost-layer templates |
| Inventory & COGS | Flourish or BLAZE | Automatic 280E COGS allocation & package tagging |
| Tax Compliance | Avalara or TaxJar | Auto-calculates & files Delaware gross receipts tax |
| Payroll | ADP or Gusto Cannabis Edition | Correctly flags non-deductible labor |
| Reporting Dashboard | Fathom or Spotlight Reporting | One-click OMC & investor packages |
Total cost for a $5M operator: $800–$1,800/month — easily pays for itself in tax savings.
Step 5: Work Only with Cannabis-Specialized CPAs
Choose firms that have:
- Filed 50+ federal 280E returns
- Offer monthly Metrc-to-GL reconciliation
- Prepare Delaware OMC submission packages
- Provide IRS and OMC audit defense
Common Financial Reporting Mistakes in Delaware Cannabis (and How to Avoid Them)
- Treating trim labor as operating expense → IRS reclassifies and assesses massive back taxes
- Forgetting to accrue quarterly gross receipts tax → sudden cash-flow crisis
- Using a standard retail chart of accounts → OMC rejects your submissions
- Poor cost layering → failed Metrc reconciliation and automatic flags
FAQ – Financial Reporting for Cannabis in Delaware
When are OMC quarterly financial statements due in Delaware?
45 days after the end of Q1, Q2, and Q3. Annual audited statements are due 90 days after year-end.
Can I deduct normal business expenses under 280E in Delaware cannabis?
No — only direct Cost of Goods Sold is deductible federally.
Does Metrc have to match my books exactly?
Yes, 100%. Any discrepancy triggers automatic OMC and IRS flags.
What is the Delaware cannabis gross receipts tax rate?
15% on retail sales, filed monthly or quarterly.
Do all Delaware cannabis licenses need audited financial statements?
Most cultivation and manufacturing licenses do; retail requirements vary by volume.
Sources & Further Reading
Implement this system today and you’ll keep more money, pass every audit, and sleep easy.
- IRS Section 280E Overview: https://www.irs.gov/taxtopics/tc506
- Delaware OMC Regulations: https://omc.delaware.gov
- Metrc Delaware Support: https://support.metrc.com
Disclaimer: This guide is for educational purposes only and is not tax or legal advice. Always consult cannabis accounting CPA and attorney.
✍️ By Daniel Sabet, Cannabis CFO & Financial Advisor at @GreenGrowthCPAs. Daniel advises cannabis operators nationwide on finance, compliance, and strategy.
📅 Ready to level up your cannabis accounting? Schedule a free consultation to start with confidence.
