California Combined Cannabis Business Representation Credential – CCCBRC
California Combined Cannabis Business Representation Credential – CCCBRC came to me in a dream last night. Either that, or it was a nightmare. No, it was a dream; the nightmare is the situation that those of us that represent commercial cannabis businesses in California are currently living with. The nightmare is having to deal with somewhere between a half dozen to a dozen different state agencies each of which has different rules and procedures for the representation of individuals and businesses that are involved with the cannabis industry. Don’t forget our thoughts on how NOT to become an expert.
Relevant Definitions – Circular 230 Practitioners
We need to introduce some terminology and background to understand both the problem and a very elegant potential solution. The first aspect is the concept of a relational database, a relational database management system [“DBMS”] and the key element in a database, which is a common unique identifier or “CUI”. The relevant definitions are:
- Relational Database – A relational database, more restrictively, is a collection of schemas, tables, queries, reports, views, and other elements. Database designers typically organize the data to model aspects of reality in a way that supports processes requiring information, such as (for example) modeling the availability of rooms in hotels in a way that supports finding a hotel with vacancies.
- Database Management System [“DBMS”] – is a computer-software application that interacts with end-users, other applications, and the database itself to capture and analyze data. A general-purpose DBMS allows the definition, creation, querying, update, and administration of databases.
- Common Unique Identifier [“CUI”] – is a unique identifying record that has been vetted, verified, and is maintained in a secure repository such that it is accepted as a reliable means to identify an individual or item. The most common examples are social security numbers [“SSN”], driver’s license numbers [“DLN”], and vehicle identification numbers [“VIN”].
There are substantial concerns about the privacy of personal financial information such that SSN and DLN information is not the preferred choice for the purpose that I have in mind. However, the license number for an attorney or certified public accountant [“CPA”] issued by a State, or the registration number issued by the US Treasury – Internal Revenue Service [“IRS”] to an Enrolled Agent [“EA”] are other examples of such numbers.
Each represents publicly available information for a group of individuals that has already been granted the right to represent both individual and business taxpayers in every jurisdiction in the United States [collectively, they are referred to by the IRS as “Circular 230 Practitioners“]. The individuals in this group have had their personal identification verified, usually including US passport, driver’s license or state identification, fingerprints, and in some jurisdictions DNA independently verified by the issuer of their credentials. The academic credentials, and satisfaction of required examinations and experience have also been verified [we note that the deficiency for EA’s is a lack of education and experience requirement, which we have previously discussed and you can read about here.]
Additional CUI’s Which We Rejected
We are aware of additional CUI’s such as:
- Preparer Tax Identification Number [“PTIN”] is an identification number that all paid tax return preparers must use on U.S. federal tax returns or claims for refund submitted to the Internal Revenue Service (IRS).
- California Tax Education Council [“CTEC”] – is a registration which is unique to California [New York and Oregon are examples of additional states which have similar programs]. California law requires anyone who prepares (or assists with) tax returns for a fee, and is not an attorney, certified public accountant (CPA) or enrolled agent (EA), to register as a tax preparer with CTEC.
Both of these CUI’s represent individuals with substantially lower levels of experience, education, validation and verification than Circular 230 Practitioners. As such, while they may have some skills and provide a useful service, they are not appropriate at this point in our analysis.
Circular 230 Databases Currently In Use
Just to provide additional background on relational databases currently in use to verify or validate Circular 230 Practitioners in California that are currently in use, we have:
- Attorney Look Up on the California Bar website.
- CPA License Look Up on the website of the California Board of Accountancy which is part of the Department of Consumer Affairs
- Enrolled Agent Look Up where the IRS provides a procedure to validate EA’s by email.
There are similar search and lookups provided in all of the US states and territories, and the ability to verify firms and professional service entities are available. You can read more about them here. As an outstanding example of how multiple lookups can be combined, we highlight CPAVerify.com, a project of the National Association of State Boards of Accountancy [“NASBA”].
CPAverify is an online central repository of information about licensed CPAs and public accounting firms maintained by the National Association of State Boards of Accountancy (NASBA) to provide a single-search resource covering participating jurisdictions where a person or firm has been licensed. With the widespread adoption of mobility, the need for the general public to be able to determine if a person or firm is licensed and in good standing is more prevalent than ever.
Just to provide an illustration, here is what is returned when I look myself up on CPAVerify.
Inter-Agency Databases In Use Today
There are several states that already provide comprehensive portals where tax professionals can register themselves, as well as individual and business entity clients that they represent, to obtain confidential taxpayer information as well as file tax returns and make payments on behalf of their clients. As an example we highlight several that we consider being the most advanced, secure and well executed:
- New York State Dept. of Taxation and Finance Online Portal for Tax Professionals – tax professional registration of a business entity, registration of an individual taxpayer, and list of types of transactions that can be performed online.
- California Franchise Tax Board [“FTB”] – the FTB website permits a Tax Professional to access and initiate the following:
- Account information:
View account balance and tax year details.
View estimated payments and credits before filing a return.
Verify the exact business entity name to use when filing a return.
View payment history.
View a list of tax returns.
View images of tax returns.*
View a list and images of notices and correspondence.
Update contact information.*
View proposed assessments.
View California wage and withholding information – individual clients only.
View FTB-issued 1099 information – individual clients only.
- Online services:
Calculate a balance due for a date in the future.
File a power of attorney (POA).
File a nonresident withholding waiver request.
Protest a proposed assessment.*
Respond to a proposed assessment to request a 30-day deferral to file a tax return.*
- Options to communicate with us:
Chat with an FTB representative about confidential matters.
Send a secure message with attachments to FTB.
- Further, FTB makes the following services available to Tax Practitioners that can be reviewed here.
California Dept. of Tax and Fee Administration [“CDTFA”] – Form CDTFA-392 is already in use and common to CDTFA and the California Employment Development Department [“EDD”] though at this time, the current requirements require a separate form even if identical information is provided be provided to each agency. Further, CDTFA already has an electronic services portal that Circular 230 Professionals can access for multiple individuals and business entities after completing a Power of Attorney registration process for each. A snapshot of the main Online Services screen appears below.
California Cannabis Regulatory Agencies – Combined Access
The triad of California agencies with direct regulatory oversight of the commercial cannabis industry –
- California Bureau of Cannabis Control [“BCC”] – Distribution and Retail Licenses
- California Dept. of Public Health [“CDPH”] – Manufactured Cannabis Safety Board [“MCSB”] – Manufacturing and Testing Licenses
- California Dept. of Food and Agriculture [“CFDA”]
have already integrated their Online Licensing and Registration Portals and share all kinds of information for all kinds of licenses. The information is on the BCC website:
when a prospective applicant takes the next step and selects the Online Licensing Portal for ANY license they are taken to:
Once the log-in and authentication process is complete, BCC presents the applicant with the choice that involves all three distinct agencies:
All of which illustrates that the inter-related relational database concept linking multiple agencies is not only possible, but the California cannabis regulators have already implemented the baseline version.
What Additional Features Should CCCBRC Include for Implementation?
If you have stayed with this and gotten this far, permit us to present “CCCBRC Nirvana”.
Let’s start with the BCC Online Licensing Portal and Add:
Basic Necessities – List 1
- Franchise Tax Board
- CDTFA for Taxes
- EDD for Employees
- California Secretary of State Cannabizfile Program – we note that CASOS fully understands the overall concept, and has cannabis legend Cheech Marin engaged and is stumping for their program.
- State Bar and Board of Accountancy for Circular 230 Professional Online Validation of Attorneys and CPA’s [sorry Enrolled Agents you are gonna have to send in paper forms until IRS modernizes the EA verification process]
- METRC Track and Trace – so online training is added to the platform.
Second Tier State Regulatory Agencies – List 2
The second tier list adds California State Agencies that are involved with some subpart of cannabis regulation such as water and pesticides.
- California Water Board
- California Dept. of Fish and Wildlife [“CADFW”]
- California Dept. of Pesticide Regulation
- California Highway Patrol
- California Dept. of Environmental Protection
- California Attorney General – Campaign Against Marijuana Planting [“CAMP”]
Third Tier County and Municipal Agencies – List 3
Having taken you this far, now we swing for the fences and use Humboldt County, CA to illustrate the importance of county and municipal governments in the California cannabis regulation scheme, starting with zoning and land use which is an absolute requirement that an approval be obtained for many of the California state level licenses.
- Humboldt County Track and Trace – yes, the county has its own program which will continue to operate even with METRC coming online.
- Cannabis Services Division for County Permitting, Land Use, and Environmental
Finally, if Humboldt County doesn’t seem quite sufficient, what about land use and Chapter 5 of the Code in Los Angeles. If you would like another 4,000 words to read, you can go here.
We would really appreciate your thought and comments, particularly if you are a California Cannabis CPA or other Circular 230 Professional serving California cannabis industry clients, please consider joining our Facebook Group for Circular 230 Cannabis Industry Professionals. There you have it, the dream or nightmare of a California Combined Cannabis Business Representation Credential. Back to reality, let start by getting BCC, CDPH and CDFA to permit Circular 230 Professionals to represent licensees and applicants, and yes you can read about that issue here.