Costing by license type
A producer accumulates cost by harvest batch: seeds and clones, nutrients, growing media, cultivation labor, allocable facility cost, drying and curing. A processor layers conversion cost onto acquired biomass. A wholesaler carries acquisition and inbound freight. A retailer carries invoiced product cost plus limited acquisition costs. We build the method to the license instead of applying one template across a vertically integrated group.
Absorption costing and the regulations
We apply Treasury Regulation 1.471 principles to determine which indirect costs are properly capitalized into inventory — production supervision, quality control, facility depreciation on production space, utilities allocated by square footage or metered use. Every allocation has a written basis, because an allocation you cannot explain is an allocation you will lose.
Metrc as the physical inventory record
Oregon's tracking system records every package, transfer, conversion and waste event. We reconcile it against the financial ledger each period so shrink, sampling, testing loss and destruction are recognized when they occur — and so a discrepancy is explained internally before anyone else asks.
Documentation built for the exam you may never have
The costing file we maintain includes the method memo, allocation bases, batch cost detail, Metrc reconciliations and period-end valuation support. If an examiner arrives, the answer is a folder rather than a project.
