Running a Thirteen-Week Cash Forecast
We build a rolling thirteen-week forecast at the transaction level: expected collections by customer, payroll by cycle, vendor payments by term, tax and excise obligations by due date, debt service, and capital commitments.
It's updated weekly and reforecast against actuals, so forecast error becomes a metric you track and improve rather than a permanent excuse.
- Weekly cash position with a thirteen-week forward view
- Collections modeled by customer and actual payment behavior, not average terms
- Tax, excise and local obligations funded on schedule
- Scenario overlays for price compression, slow collections and expansion
Funding the Tax Bill
Because 280E taxes gross profit, an operator can owe substantial federal tax in a year with a book loss. Excise tax collected from customers isn't the operator's money either. Both need to be set aside and funded as they accrue.
We set a funding percentage off the tax model, sweep it on a set schedule, and reconcile the reserve to the projected liability quarterly. This one habit prevents the most common cause of cannabis insolvency we see.
Working Capital and Receivables
Wholesale receivables in Illinois are notoriously slow to collect, and the pain lands hardest on cultivation centers and craft growers selling into dispensaries. Aging discipline, credit limits, deposit requirements and enforcing terms are financial controls, not a customer-service afterthought.
On the payables side, we sequence vendor payments against the forecast, negotiate terms where there's leverage, and stop the habit of paying whoever complains loudest instead of whoever matters most.
Banking and Treasury Constraints
Cannabis-compliant banking runs through a small group of Illinois credit unions and state-chartered banks, and it comes with higher fees, heavy documentation and the standing risk of account closure. Operators should keep a documented banking file, avoid relying on a single institution where possible, and keep cash-handling controls — armored transport, dual control — strong enough to pass a bank's own compliance review.
We prepare the recurring documentation banks ask for and maintain the internal controls that keep the relationship going.
Capital Structure and Debt Service
Cannabis debt is expensive, often secured by inventory or real estate, and usually carries covenants an operator without a forecast can't realistically manage. Before taking on debt, the forecast should show service capacity under a downside scenario, not just the plan case.
We model debt scenarios, weigh sale-leaseback and equipment financing alternatives, and stress-test covenants before signing rather than after a breach.
