420Ledger is a cannabis accounting firm serving dispensaries and multi-state operators across 27 states. we handle dispensary bookkeeping, 280E tax compliance, state tax filings, and payroll — with the precision this industry demands.
IRC §280E is the most punishing provision in US tax law. Without a 280E specialist, dispensaries routinely overpay by tens of thousands of dollars — every single year.
Standard QuickBooks workflows and expense categorization are completely wrong for cannabis. The result is massive, preventable overpayment and zero audit protection.
A $2M single-location dispensary can overpay the IRS by $50k–$150k annually from misclassified payroll and expenses. Multi-state operators face $300k–$2M+ in avoidable federal tax. That's money that should stay in the business.
NJ excise tax, METRC reporting, multi-state 280E decoupling, MSO consolidations — this isn't a niche. It demands a firm that was built for exactly this.
We handle everything your dispensary needs to stay compliant and profitable — from daily transaction categorization to year-end 280E tax filings, with cannabis-specific compliance at every step.
Full-service monthly close with cannabis-specific categorization, payroll integration, and reconciliation — every month, on time.
We maximize your COGS allocation and prepare every state and federal filing — documented and defensible for audit.
Audit-ready financials, owner reporting, and a compliance calendar that keeps you ahead of every deadline.
We connect directly to your payroll provider and handle the cannabis-specific categorization standard firms miss entirely.
Get your books set up correctly from day one — chart of accounts, opening balances, compliance calendar, and first-month close.
Running multiple locations across state lines? We handle consolidated reporting, per-location state tax, and intercompany eliminations.
Running dispensaries across NJ, AZ, and beyond means navigating different excise taxes, different 280E decoupling rules, and a federal return that consolidates everything. We built the infrastructure for multi-state cannabis operators.
Each location gets the right state tax rate, excise treatment, and 280E decoupling status for its state — no manual configuration required.
Management fees, payroll allocations, and inventory transfers between locations are tracked and eliminated at the MSO parent level — clean consolidations, every time.
Your MSO entity's federal return requires blended 280E disallowance across all subsidiaries. We compute it correctly — by location, by state, and in aggregate.
Cover page, state tax comparison, per-location 280E workpapers, and intercompany eliminations schedule — one complete document for your CPA.
280E disallows ordinary business deductions for cannabis operators — but COGS is still deductible. The gap between a correct and incorrect 280E strategy is significant: single location operators save $50k–$150k per year. Multi-state operators unlock $300k–$2M+ in annual optimization potential.
We identify every employee and cost that can be legitimately allocated to inventory acquisition and handling — then document it for audit defense.
23 states — including California, Colorado, New York, Illinois, and New Jersey — have decoupled from federal 280E, allowing normal business deductions on state returns. We apply the right treatment automatically per location.
Every 280E decision is documented before the IRS asks. Our audit defense package includes: COGS allocation reports with cost-flow methodology, employee time allocation logs by department, inventory costing support under IRC §471, and written 280E position memos for each entity. The paper trail exists before you need it.
Allocations based on IRS guidance, IRC §471, and applicable case law. Final treatment depends on entity structure, accounting method, and operational facts. This is illustrative only.
Correct 280E strategy changes the entire tax picture. Here's what that looks like across real clients.
COGS reallocation identified an additional $40,000 in deductible inventory costs. Correct allocation of receiving and purchasing payroll drove the full reduction.
Intercompany eliminations and per-location 280E allocation reduced consolidated taxable income by $1.1M. Each location's COGS bucket was optimized independently.
NY state decoupling benefit applied across all disallowed operating expenses. State taxable income reduced by $290,000 — unlocking savings unavailable under a federal-only approach.
Results vary by entity structure, state, and operational profile. Book a free consultation to see what's possible for your operation.
From first call to first close, the process is fast, structured, and built so you never have to explain cannabis accounting to your accountant again.
30-minute call. We review your current setup, identify 280E exposure, and tell you exactly what's being done wrong.
Chart of accounts, opening balances, owner structure, POS integration, and payroll connection — fully configured before your first transaction.
We import your POS, bank, and payroll data, categorize every transaction with 280E treatment, and send you a clean monthly report.
Quarterly NJ excise, federal estimated payments, 941s, and year-end tax package — everything filed on time, with full documentation.
Flat monthly rates. No hourly billing, no surprise invoices. Pick the level that matches where your operation is today.
All engagements start with a free consultation. Book yours →
420Ledger started from a simple observation: cannabis operators were being underserved by a profession that had never taken the industry seriously. Generic tools, generic workflows, and generic advice — costing clients tens of thousands in preventable overpayment every year.
We built the infrastructure from scratch. A purpose-built accounting platform with 280E compliance, multi-state tax logic, MSO consolidations, and payroll integration all native to the system. Then we built a firm around it. No retrofitted QuickBooks. No guesswork.
Not a legacy firm with a cannabis practice bolted on. Every system, workflow, and process was designed specifically for this industry.
Deep NJ cannabis regulatory expertise, with multi-state tax logic for operators expanding across markets.
Dedicated MSO tax engine — consolidated reporting, intercompany eliminations, and per-location state tax in one system.
Every 280E decision is documented before the IRS asks. Full workpapers, allocation schedules, defensible positions on every engagement.
The questions dispensary owners ask us most — answered plainly, without jargon.
IRS Code §280E disallows most standard business deductions for cannabis companies because cannabis remains federally classified as a Schedule I substance. This significantly increases your effective tax rate — often above 70% without proper planning. 420Ledger structures your books to maximize your Cost of Goods Sold (COGS), the one deduction cannabis businesses can legally claim under 280E.
Yes. General accountants are rarely familiar with 280E, state-specific cannabis excise taxes, or the chart of accounts structures cannabis businesses require. Using a generalist often results in missed COGS deductions, compliance errors, and IRS exposure that can cost $50,000–$150,000 per year at a single location. 420Ledger specializes exclusively in cannabis accounting.
Monthly cannabis bookkeeping at 420Ledger includes POS and bank transaction import (Dutchie, Square, Treez), 280E expense tagging and COGS allocation, payroll journal entries (ADP, Paychex, Gusto), bank reconciliation, monthly P&L and balance sheet reports, and client portal access. Reports are delivered by the 10th of each month.
MSO (Multi-Site Operator) cannabis accounting handles the consolidated financials for cannabis companies with multiple dispensary locations across one or more states. It includes per-location state tax compliance, intercompany eliminations, blended 280E disallowance calculations across subsidiaries, and a consolidated tax prep packet covering all locations in one document.
420Ledger's monthly plans start at $1,500–$2,500/mo for the Foundation tier (single-location dispensaries), $2,500–$4,000/mo for the Growth tier (multi-location operators), and $4,000–$7,500+/mo for the Operator/MSO tier. All plans are flat monthly rates — no hourly billing or surprise invoices. Book a free consultation for a custom quote.
420Ledger provides cannabis accounting and dispensary bookkeeping services across 27 legal cannabis states. We are headquartered in New Jersey with deep NJ Cannabis Regulatory Commission expertise, and serve clients nationwide — including MSOs operating across multiple states such as Arizona, California, Colorado, Illinois, New York, and more.
420Ledger is a tax preparation and bookkeeping firm specializing in cannabis. We are not a CPA or EA firm. We focus on cannabis bookkeeping, 280E tax preparation, payroll compliance, and financial reporting for plant-touching businesses across 27 states.
First consultation is free. We'll review your current setup, identify 280E exposure, and tell you exactly what it would cost to fix it.