With hemp’s relatively new standing as a legal crop, Brandon Van Asten, CPA Manager, Bridge West LLC, says choice of business entity, such as sole proprietorship or limited liability corporation, now holds different implications for hemp growers, and they must decide which is best for their operations.

“It’s more a strategic decision, like a traditional business,” he explains. “But farmers who grow hemp along with other crops may want to set up a separate business entity for the hemp portion of their farm.”

Van Asten says this separates the business risks of hemp versus more established crops, but it also segregates the hemp business with outside investment in mind. “An investor may not be interested in a traditional farm, but they might have more interest and willingness to invest in a hemp operation they know is scalable,” he says.