How to Record Dispensary Lease Deposits
Recording the payment of security deposits for retail dispensary locations, which are often higher in the cannabis industry.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Security Deposits | Asset | 15,000.00 | - |
| Cash | Asset | - | 15,000.00 |
💡 Accountant's Note
Security deposits are non-depreciable assets. Because cannabis businesses are high-risk, landlords often require 3-6 months of rent as a deposit.
Practitioner & Systems Framework
💻 ERP Architecture
Set as a long-term asset in the fixed asset or general ledger module.
⚠️ Audit Flags
Discrepancies between lease agreements and balance sheet deposit amounts.
📄 Required Documentation
Executed lease agreement and proof of wire transfer.
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Related Journal Entries
Cannabis & Regulated Substances
IRC §280E — Complete Disallowance of Ordinary Business Expenses (Cannabis-Specific Tax Law)
Cannabis & Regulated Substances
§471 Inventory Cost Capitalization — Maximizing COGS for Cultivators Under §280E
Cannabis & Regulated Substances
Biological Assets — Growing Cannabis Plants at Fair Value (IAS 41 for Canadian Companies)
Discussion & Community Questions
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