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18 Worcester Business Journal | May 13, 2019 | wbjournal.com W ith cannabis businesses steadily entering the main- stream, it can be easy to lose sight of how difficult it is to launch and oper- ate an organization in a quickly evolving industry. e regulatory scrutiny and tug of war between state and federal leg- islation creates a delicate environment. Initially, nuances put restrictions on company growth and hamper players from entering the market. Without the right financial backing and partners to get through this formative stage, navigating the additional expenses and challenges can be a major struggle. Cannabis business owners may be- lieve they have a handle on the account- ing, but there is no room for error in putting a solid finance function in place to overcome these unique hurdles. Taxes Sorting out federal tax is difficult in a straightforward setting. For cannabis, a number of pitfalls arise because the core business is still viewed as trafficking in an illegal substance. ere are strategies to help maximize deductible business expenses, but owners need a sound fi- nancial accounting system to gauge risks and capitalize on opportunities. Banking e sale of marijuana remains a federal crime, so any money tied to cannabis operations can expose banks to significant risk. As a result, only a hand- ful of financial institutions will work with distributors. Locally, GFA Federal Credit Union in Gardner has taken the leap into the recreational market, but its overall operations are restricted geo- graphically. Other institutions are slowly jumping in, and help may be on the way in the form of the SAFE Act (Secure and Fair Enforcement Banking Act of 2019) under consideration by Congress. e act would clear the way for banks to work more traditionally with licensed cannabis operations. For the time being, operators are faced with security issues coming along with tracking and moving large amounts of cash. ey need to handle the added expenses associated with secure trans- port and insurance. Financial statement audits are signifi- cantly more onerous. A different set of risks must be examined as auditors ver- ify cash on hand, review safeguards and processes to manage cash. and ensure employees are not skimming. Financing Small businesses oen live and die by financing vehicles to provide enough cash flow for them to achieve stability. In the cannabis industry, though, tradition- al paths to financing are blocked. With no bank backing, there are no available lines of credit or long-term debt facili- ties. Owners have little recourse but to seek third-party financing from friends, family or angel investors. at usually means higher rates and tighter terms. Payroll As with banking, few major payroll providers will work in the cannabis industry. Owners are limited to smaller, more local companies. Even then, complications arise in how payments must be made to the federal government, driving costs higher. Until federal restrictions ease, standard business operations like taxes, banking, financing, and payroll will put unique burdens and added expense on cannabis operations. When the playing field becomes level, new concerns will arise: It will be easier to enter the market, increasing competition and lowering prices. In the meantime, cannabis operators who have a strategic plan in place and the right advisors will overcome these hurdles and set the pace in Mass. 1 0 T H I NG S I know about . . . ...Internship programs By Julia Becker Collins Julia Becker Collins is the chief operating officer at the Westborough digital marketing agency Vision Advertising. She can be reached at julia@vision- advertising.com. 10) You get out what you put in. Make a real effort, treat interns like valued staff, and you get amazing results. Minimal effort on your part will produce minimal results – and disappointed interns. 9) Make sure you've got the time to run the program. Regardless of pay, the most significant cost to you will be time. You need to put aside time for training, mentor- ing and work review. 8) Design intern-ready projects. Before your interns' first day, you need to make sure you've got work to benefit both par- ties. Find (or make) work for interns, from basic work to those research projects you never have the time for. 7) Find the teachers in your staff. Find the team members passionate about teach- ing and empower them to work with your interns. Win-win. 6) Small businesses craft the best internships. Small businesses are more agile, and you can pass this flexibility on to your interns. They will have access to the staff, all in one place, and learn from each from the multiple hats they wear. 5) Do the paperwork. Make sure you know about school paperwork requirements in advance and review internship agreements and harassment policies during orientation. 4) Always ask for feedback. If you want to run a successful internship program, you've got to know what works. Get feedback from interns regularly and make sure to have an exit interview. 3) Set high expectations upfront. A great internship means hard work on both sides. Be transparent about the level of work from the start. This will lay the foundation for highly motivated interns and help unsuited candidates self-select out of the process. 2) It's okay to challenge interns. Interns can do more than they expect, but only when they get the right training and feedback. Involve them in many facets of your work so they can learn and have their voice heard. 1) Provide an education. If college is book smarts, work is street smarts. Teach interns how to apply their skills and edu- cate them on how day-to-day operations really work. Remember they aren't the only people learning: You'll build confidence in your staff from intern training. K N O W H O W Pot firms must overcome financial hurdles 10 1: R E C R U I T I N G T A L E N T BY DAVE MCMANUS Special to the Worcester Business Journal BY SUSAN SHALHOUB Special to the Worcester Business Journal H iring the right employees on the first try saves money and time. Finding a new employee to join your company – done correctly – can provide a valuable asset to your business' culture and team mo- mentum. It doesn't always have to mean relying on an expensive recruiting firm to help out, either. Here are some things you may want to try to build a strong gathering of talent. Connect with local universities. Reach out and maintain relationships with area colleges. It helps to get the word out about job opportunities like intern- ships but also full-time positions aer graduation. Volunteering to speak about your industry and fostering relationships with career-resource center directors links your company to talent. "Focus on building strong partnerships with key academic departments, student clubs and faculty members," advises Recruit- ing.com, getting specific with entities who have students with skills in demand at your workplace. Involve employees. "Organizations that fail to use employees to assess potential employees are underutilizing one of their most important assets," writes Susan M. Heathfield at eBal- anceCareers.com. Employees can help with hiring in three ways, she says, with employees recommending candidates to your company; assisting in reviewing resumes; and helping interview potential candidates to see if they would be a good fit for the company. "People who participate in the selection process are committed to helping the new employee succeed," she adds. Keep up with your company's social media content. Blogs, Facebook, Linke- dIn are all valuable recruiting channels, offering information about your firm, its success and culture. Sam Holzman of Entrepreneur.com cites a study showing 80% of employers say social recruiting helps them find passive candidates (great candidates who happen to already be employed). Don't only use social media to share job openings, but use it to gener- ally build your brand as a great employer, spotlighting company core values. Dave McManus is the co-managing partner at Westborough accounting firm AAFCPAs. W W W