The 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, TPT, excise and federal tax obligations by due date, debt service, and capital commitments.
The forecast updates weekly and is reforecast against actuals, so forecast error itself becomes a measured, improving metric rather than a standing excuse.
- Weekly cash position with a thirteen-week forward view
- Collections modeled by customer and aging behavior, not by average terms
- TPT, excise and federal tax obligations funded on a schedule
- Scenario overlays for price compression, delayed collections and expansion
Funding the Tax Obligation
Because 280E taxes gross profit, an Arizona operator can owe substantial federal tax in a year with a book loss. TPT and excise tax collected from customers are likewise not the operator's money. Both need to be segregated and funded as they accrue.
We set a funding percentage from the tax model, sweep it on a defined cadence, and reconcile the reserve to the projected liability quarterly. This one practice prevents the most common cause of cannabis insolvency we see in Arizona.
Working Capital and Receivables
Wholesale receivables run slow across the Arizona market, and the collection strain falls hardest on cultivators and manufacturers selling into retail. Aging discipline, credit limits, deposit requirements and enforcement of terms are financial controls, not customer service niceties.
On the payables side, we sequence vendor payments against the forecast, negotiate terms where leverage exists, and prevent the pattern of paying the loudest vendor instead of the most critical one.
Banking and Treasury Constraints
Cannabis-tolerant banking exists in Arizona but comes with elevated fees, extensive documentation and the ongoing risk of account closure. Operators should maintain a documented banking file, avoid single-institution dependence where possible, and keep cash-handling controls strong enough to satisfy an institution's compliance review.
We prepare the recurring documentation banks request and maintain the internal controls that keep the relationship viable.
Capital Structure and Debt Service
Cannabis debt is expensive, often secured by inventory or real estate, and frequently carries covenants an operator without a forecast cannot manage. Before taking on debt, the forecast should demonstrate service capacity under a downside case, not only the plan case.
We model debt scenarios, evaluate sale-leaseback and equipment financing alternatives, and stress-test covenants before signature rather than after breach.
