Case Study: Harborside improves cannabis tax compliance with Cova dispensary POS

Harborside navigates $11 million tax risk with Cova

Harborside, a medical cannabis dispensary, faced a significant financial challenge after a U.S. Tax Court ruling forced them to pay $11 million in back taxes. The IRS's Section 280E disallowed nearly all business deductions, taxing them on gross profit rather than net income and threatening their financial stability. To navigate this complex tax landscape and ensure audit-ready compliance, they turned to Cova and its point-of-sale (POS) system.

The solution implemented by Cova was its specialized cannabis POS system, which integrates tax accounting directly into the retail workflow. This technology provided features like custom tax rules and tax-inclusive pricing, helping Harborside accurately track and collect required taxes at each purchase. By maintaining meticulous digital records and relying on Cova's purpose-built system, Harborside was better positioned to manage its unique tax liability and avoid costly IRS investigations.

Harborside