Accounting, Taxation, and Auditing Issues Following the Legalization of Recreational Marijuana in Canada: Learning from the American Experience

Abstract

Within North American there are several anomalous situations concerning the legality of marijuana either as a medical (legal across Canada but only 23 states) or recreational substance (not currently legal in Canada: legal in eight states and the District of Columbia, however still banned nationally). These situations have led to differences in the business model employed, the recording of accounting transactions on either a cash or accrual basis, and the auditing of public corporations, which may be listed or want to list on stock exchanges. This paper identifies the salient issues and comments on future directions.