Internal controls help optimize operations, protect cash flow, and effect good cash management policies.
Managing a cannabis company’s finances is unlike managing those of any other business we have seen before. Since marijuana is federally illegal with no government funding, it is up to the individual company and the state to take the necessary measures to ensure that these businesses are compliant.
A strong internal control environment helps optimize operations, protect cash flow, and effect good cash management policies. The passing of the Sarbanes-Oxley Act (SOX) makes having a strong internal control environment a requirement for public companies. The goal is to protect shareholders and the general public from accounting errors and fraudulent practices in enterprises, as well as improve the accuracy of corporate disclosures.
The strong control environments utilized by public companies in the cannabis industry provide a powerful blueprint for best practices that private cannabis companies can learn