Case Study: Harborside strengthens cannabis tax compliance and audit readiness with Cova POS

Harborside avoids $11 million tax risk with Cova

Harborside, a medical cannabis dispensary, faced a severe financial challenge after a U.S. Tax Court ruling forced them to pay $11 million in back taxes. This was due to Section 280E of the tax code, which disallows standard business deductions for cannabis companies, dramatically increasing their federal tax liability and nearly bankrupting the operation. To navigate this complex tax landscape and ensure compliant recordkeeping, they turned to Cova for its point-of-sale (POS) system.

The Cova POS system provided a solution by integrating tax accounting directly into the dispensary's workflow. Its features, including custom tax rules and tax-inclusive pricing, helped automate and ensure accurate tracking of sales taxes collected. This reduced manual errors for staff and created the meticulous, audit-ready digital records necessary to withstand intense IRS scrutiny, ultimately helping Harborside manage its unique tax obligations more effectively.

Harborside