This SOP provides standardized procedures for cash handling, accounting, and disbursement of monthly overhead payments across all Red Run Cannabis retail locations.
It ensures timely payment of prioritized financial obligations, accurate reconciliation with Intuit Enterprise Suite (QuickBooks Online), and full compliance with IRC Section 280E requirements for COGS separation.
Every retail location maintains five (5) primary cash bags. These bags are the foundation of Red Run's cash segregation system. No cash should exist outside of these designated bags.
| Bag | Designation | Purpose | Target |
|---|---|---|---|
| Bag #1 | Sales Tax | Holds collected sales tax. Funded from daily revenue, rounded up to nearest $20. | Variable |
| Bag #2 | 280E | 280E allocation. Net revenue × 0.15, rounded up to nearest $20. | Variable |
| Bag #3 | Payroll | Payroll obligations only. Do not draw for any other purpose. | $15,000 |
| Bag #4 | Overhead | Monthly overhead: rent, utilities, CC reimbursements, insurance. | $6,000 |
| Bag #5 | COGS | Cannabis vendor payments. Cash on delivery. 280E deductible. | Variable |
The 280E bag (#2) is funded daily using this formula:
Then round UP to the nearest $20.
| Gross Revenue (Dutchie) | $5,847.00 |
| − Sales Tax | $347.82 |
| = Net Revenue | $5,499.18 |
| × 0.15 | $824.88 |
| Round UP to $20 | $840 → Bag #2 |
Each location follows this priority order for monthly overhead payments.
| Priority | Payment Type | Timing |
|---|---|---|
| 1 | Cannabis Vendor COGS | On delivery (typically Thursdays) |
| 2 | Rent | By the 5th |
| 3 | Utilities | By due date |
| 4 | Credit Card Reimbursements | By the 10th |
| 5 | Loan Payments | Per agreement |
| 6 | Payroll Taxes (941 + AKSUI) | By the 15th |
Every Monday, the supervisor counts all five primary bags and updates both the CannaOps digital ledger and the hardcopy bank ledger.
| Step | Action |
|---|---|
| 1 | Count each primary bag (#1–5). Record exact balance of every denomination. |
| 2 | Enter balances into CannaOps: Retail → Cash Management → Weekly Count |
| 3 | Update hardcopy bank ledger. Both records must match. |
| 4 | Compare to previous week. Document explanation for any discrepancy >$20. |
| 5 | Count secondary bags (if active). |
| 6 | File completed Cash Count Form. Retain for 7 years per IRS requirements. |
Critical: Each location routes to its correct Intuit Enterprise Suite company account.
| Location Code | Legal Entity | QB Company Account |
|---|---|---|
| RRCo-5455 | Red Run Cannabis Company LLC | Red Run Cannabis Company |
| RRCo-Reds | Red Run Cannabis Company LLC | Red Run Cannabis Company (Reds) |
| RRCo-KBR | KBR Retail LLC | KBR Retail |
| RRCo-910 | Red Run Anchorage Holdings LLC | RRCo-ANC — 910 categories |
| RRCo-225 | Red Run Anchorage Holdings LLC | RRCo-ANC — 225 categories |
| RRCo-36A | Red Run Anchorage Holdings LLC | RRCo-ANC — 36A categories |
Quiz Complete!