PCAOB Cannabis Audit Services
A cannabis company needs a PCAOB audit when it files financial statements with the SEC. GreenGrowth CPAs is a PCAOB-registered public accounting firm (PCAOB Firm ID 6580) that audits cannabis companies. You can confirm any auditor's registration yourself on the PCAOB's public registry before you sign an engagement letter.
Request a PCAOB Audit ProposalWhich PCAOB-Registered Firms Audit Cannabis Companies?
Only firms registered with the Public Company Accounting Oversight Board (PCAOB) can issue audit reports on the financial statements of SEC issuers. Many registered firms do not accept cannabis clients because of federal law, banking issues, and the tax complexity of IRC 280E. The ones that do tend to have a dedicated cannabis practice.
GreenGrowth CPAs is one of them. We are PCAOB-registered (Firm ID 6580), an AICPA member firm, and we serve cannabis operators in 15 state markets. Our audit and assurance practice is led by Daniel Sabet, who also leads our cannabis CFO practice.
To see which firms audit a specific public cannabis company, look up the company's latest 10-K in SEC EDGAR. The auditor's report names the firm. The PCAOB's AuditorSearch tool shows Form AP filings, which list the engagement partner and firm for each issuer audit.
How to Verify a Firm's PCAOB Registration
- Open the PCAOB's registered firm search (RASR)
- Search by firm name or PCAOB Firm ID (ours is 6580)
- Confirm the status shows the firm as currently registered
- Review the firm's annual and special reports filed with the PCAOB
- Check AuditorSearch for the issuer audits the firm has signed
Who Needs a PCAOB Cannabis Audit
SEC Reporting Companies
Any company that files annual reports on Form 10-K needs a PCAOB audit of its annual financial statements and a review of each quarterly 10-Q. This includes many cannabis companies quoted on OTC markets that file reports with the SEC.
S-1 and Form 10 Filers
A company registering securities on Form S-1, or registering a class of stock under the Exchange Act on Form 10, must include financial statements audited under PCAOB standards. Our cannabis IPO services cover that path.
Uplisting Candidates
Companies moving from the OTC to a national exchange need PCAOB audits, and plant-touching operators often must restructure first. Read the deconsolidation issue in cannabis uplisting before you plan the timeline.
Cross-Listed MSOs
Multi-state operators listed in Canada that also file reports with the SEC need a PCAOB-registered auditor for those filings, in addition to any home-market requirements.
Ancillary Public Companies
Public companies that sell equipment, software, real estate, or services to the cannabis industry are SEC issuers too. Their customer and lease exposure to cannabis creates its own audit risks.
Targets of Public Buyers
A private operator being acquired by a public company may be asked for audited financial statements. Starting with an audit-ready close saves months when a deal appears.
PCAOB vs AICPA Audits
Both are audits, but they follow different standards and serve different readers. Our guide to PCAOB audit requirements covers the rules in more depth.
| Point | PCAOB Audit | AICPA Audit |
|---|---|---|
| Who needs it | SEC issuers and registrants | Private companies, lenders, investors, some state regulators |
| Standards | PCAOB auditing standards (AS) | AICPA generally accepted auditing standards (AU-C) |
| Auditor | Must be registered with the PCAOB | Licensed CPA firm; PCAOB registration not required |
| Independence rules | SEC and PCAOB rules | AICPA Code of Professional Conduct |
| Documentation | Final file assembled within 14 days (AS 1215) | Longer assembly period under AICPA standards |
| Public disclosure | Form AP names the engagement partner | No public filing of the auditor's name |
| Oversight | PCAOB inspections of the firm | AICPA peer review |
Filing an S-1, Form 10, or your next 10-K?
Talk with our audit team about scope, timing, and what your books need before fieldwork.
Cannabis-Specific Audit Risks
A cannabis audit tests the same financial statements as any audit, but several areas carry more risk and take more time. These are the areas we plan around first.
IRC 280E blocks most deductions for adult-use activity. The income tax provision under ASC 740, including uncertain tax positions for any 280E filing positions, is often the largest audit judgment. See our ASC 740 overview.
Under 280E, cost of goods sold (IRC 471, as limited for resellers and producers) is still deductible. Auditors test how costs are capitalized, how inventory counts tie to seed-to-sale records, and how waste and write-downs are recorded.
Tax debts, limited bank access, and price compression can raise substantial doubt about a company's ability to continue for one year. Management must evaluate this, and the auditor must assess that evaluation.
Cash-heavy retail needs strong controls over counts, deposits, armored car transfers, and vault access. Weak cash controls lead to more testing and can lead to reported weaknesses.
Management agreements, real estate leases with owners, and IP licenses between affiliated entities need disclosure and, in some cases, consolidation analysis. See our page on multi-entity cannabis accounting.
State-licensed medical marijuana moved to Schedule III effective April 28, 2026 (91 Fed. Reg. 22714). Adult-use stays Schedule I. There is no IRS guidance yet on splitting costs between the two, so 2026 tax provisions need documented judgment.
Timeline and What to Have Ready
A first-year PCAOB audit usually takes longer than a recurring one. The auditor must accept the client, understand the business, and audit opening balances. For an S-1 or Form 10, smaller reporting companies typically need two years of audited financial statements, so the work often covers two fiscal years at once.
The biggest cause of delay is books that are not ready. Months of reconciliations done during fieldwork push the report date back. A pre-audit readiness review fixes this first. Our article on what auditors notice in cannabis audits lists the common gaps.
Once you are public, the calendar is set by SEC filing deadlines. Your quarterly reviews and annual audit must fit inside them every year. See our public company audit services for how we plan recurring engagements.
Have These Ready Before Fieldwork
- Closed and reconciled books for every period under audit
- Inventory counts tied to seed-to-sale (for example, Metrc) data
- Cash count and deposit records by location
- 280E calculation and supporting cost allocations
- All management, lease, and IP agreements between related entities
- Debt agreements, cap table, and equity records
- State license documents and regulator correspondence
Auditor Independence
SEC and PCAOB independence rules limit what your auditor can do for you. An auditor of an SEC issuer cannot keep your books, prepare the financial statements it audits, or make management decisions. If GreenGrowth CPAs provides bookkeeping or outsourced CFO work to a company, a separate independent firm must audit that company's SEC filings, and the reverse is also true. We check independence before we accept any engagement. Read more in mastering independence rules in auditing.
What Drives the Cost
Audit fees depend on scope and risk. We quote after a scoping call, and the main drivers are listed here so you can plan.
Main Cost Drivers
- Number of entities, licenses, and locations
- Number of years to audit (first-time S-1 or Form 10)
- Inventory volume and count locations
- Quality of the books and reconciliations
- Complexity of 280E and the tax provision
- Consolidation, VIE, and related party issues
- Debt, warrants, and other complex equity
How Our PCAOB Audit Process Works
Scoping and Acceptance
We confirm the filing, periods, entities, and independence, then send a proposal.
Planning
We assess risk in 280E, inventory, cash, related parties, and going concern, and share a request list.
Fieldwork
We test balances and controls, observe inventory, and work through open items with your team.
Report and Filing
We issue our report for your SEC filing and complete documentation within PCAOB timelines.
PCAOB Cannabis Audit FAQs
Which PCAOB-registered firms audit cannabis companies?
A limited number of PCAOB-registered firms accept cannabis clients, usually those with a dedicated cannabis practice. GreenGrowth CPAs is a PCAOB-registered firm (PCAOB Firm ID 6580) that audits cannabis companies. To see who audits a specific public cannabis company, check the auditor's report in its latest 10-K on SEC EDGAR or search the PCAOB's AuditorSearch tool.
How do I verify that an audit firm is registered with the PCAOB?
Search the firm's name or Firm ID in the PCAOB's public registered firm search, which is part of its Registration, Annual and Special Reporting (RASR) system. Confirm the firm shows as currently registered. GreenGrowth CPAs can be found under PCAOB Firm ID 6580.
Does a private cannabis company need a PCAOB audit?
No. A private company that does not file with the SEC can use an audit under AICPA standards for lenders, investors, or state regulators. A PCAOB audit is needed once the company files financial statements with the SEC, such as in a Form S-1, a Form 10, or annual and quarterly reports.
What is the difference between a PCAOB audit and an AICPA audit?
A PCAOB audit follows PCAOB auditing standards, must be performed by a PCAOB-registered firm, and is used for SEC filings. An AICPA audit follows generally accepted auditing standards for private companies. PCAOB audits also carry stricter documentation timing, SEC independence rules, public Form AP disclosure, and PCAOB inspections.
How does 280E affect a cannabis company's audit?
IRC 280E disallows most deductions for adult-use activity, which raises taxable income and often creates tax debts. The auditor tests the ASC 740 income tax provision, including uncertain tax positions, and how costs were capitalized into inventory and cost of goods sold. Since state-licensed medical marijuana moved to Schedule III on April 28, 2026, companies with both medical and adult-use activity must also document how they split costs, because the IRS has not issued guidance on that yet.
Can the same firm do our bookkeeping and our PCAOB audit?
No. SEC and PCAOB independence rules prohibit an issuer's auditor from keeping its books or preparing the financial statements it audits. You can use one firm for accounting and CFO support and a separate independent firm for the audit.
How much does a PCAOB cannabis audit cost?
Fees depend on scope. The main drivers are the number of entities and locations, the number of years audited, inventory volume, the condition of the books, the complexity of the 280E tax provision, and consolidation or related party issues. GreenGrowth CPAs provides a quote after a scoping call.
Need a PCAOB-Registered Auditor for Your Cannabis Company?
GreenGrowth CPAs audits cannabis companies that file with the SEC. Schedule a scoping call to discuss your filing, timeline, and readiness.
Schedule a Consultation