Cannabis, crypto, and cash in a vault with Zach Gordon from Propeller Industries

A Venn diagram: the left circle is pale blue with the words 'Zach Gordon, Propeller Industries' and the right circle is Zach's headshot. The circle overlap is a dark blue.

  • Because of ill-defined regulations in crypto and cannabis, Zach set out to define the rules himself. He formed the New York State Society of CPAs’ Cannabis Industry Committee.  

  • Zach thinks that accounting needs a branding makeover. This starts with showing students how accounting is involved in some of the most exciting industries out there.  

It sounds like something out of an old Western film: someone buys an old bank so they can use the vault to store their cash. For Zach Gordon, that was no movie.

Zach is involved at the ground level of cannabis and crypto accounting, two industries with highly contested tax regulations. And one of his cannabis customers kept him on his toes.

“​​Very early on, I dealt with a client based out of California. They literally bought a bank, the physical location, for the safe,” Zach recounts. “They had $30-something million in cash in the vault. I had to go in and do some sort of testing to see if there was actually that much cash on site. Audit guidelines weren't what they are now. So we had to use some calculus.”

But it’s not all cash piles and bank vaults for Zach. 

After getting started in private equity, the desire for better work-life balance led Zach to the startup world. While working on a fitness app with a friend at a WeWork office, he serendipitously rubbed elbows with a retired Wall Street professional who deployed capital into cryptocurrency and cannabis. Where there wasn’t clear guidance, Zach blazed his own trail. 

Zach joins Karbon CEO and host, Stuart McLeod, on episode 57 of the Accounting Leaders Podcast, where he shares his experience in developing crypto guidelines, helping startups thrive, and cannabis accounting. Zach also talks about the lasting impact he hopes to have on accounting.

Braving the wilderness

Zach’s introduction to crypto took place in 2016. As he learned more about the industry, he realized how few CPAs were willing to tackle it. Part of that was because of fear: cryptocurrency regulations and audit requirements were uncertain. But the only way Zach saw to face it was head-on. 

The same goes for Zach’s work in cannabis accounting. The ex-Wall Street magnate from his WeWork office wanted good due diligence for his investments in cryptocurrency and cannabis. Zach worked with him to come up with a framework to evaluate those startups from an accounting perspective. 

“There was very little guidance nor a roadmap. We had to come up with some real procedures to actually figure this thing out. And especially on the cannabis side, we called AICPA, the New York State Society of CPAs, politicians—anyone we could think of for guidance. You have a license to protect. You're touching something that’s potentially federally illegal,” Zach says of the risks with undefined regulations. 

With the New York State Society of CPAs, Zach came away empty-handed—so he took matters into his own hands. He founded the Society’s Cannabis Industry Committee and chaired it for two years. 

“We were able to put together a committee of CPAs, lawyers, finance people, business owners, and operators,” Zach tells Stuart. “There wasn't anything like that [before]. And now pretty much every state has one. I also sit on the digital assets committee. We’re running the line between digital assets and crypto and cannabis.”

Giving startups a leg up

Thanks to his own involvement in the startup world, Zach knows firsthand what helps new business owners most: time to focus on the important stuff. Now, in his role working with numerous startups, his goal is to lighten the load for founders. 

“Having been a former founder myself, I know there are about 7,000 things to think about. We’ll come up with the right investor reporting [for our clients]. We'll take care of the monthly close. We'll make sure the bills are paid. That is a big deal,” Zach explains.

Zach’s work at Propeller Industries is mostly geared toward seed and Series A and B round fundraisers. The firm’s client portfolio is impressive. Recently, a few of their startups combined for around $100 million raised. 

It’s pretty rewarding. If we're talking about quantifying the impact we've had, it’s the clients being excited to give over work and asking what more they can give over.

Zach Gordon, Propeller Industries

Recommended reading: Cannabis accounting: Revealing the complexities with Andrew Hunzicker, CPA of DOPE CFO

The accounting rebrand

Zach wants to change the traditional view of accounting. 

“We need to rebrand. The face of accounting is not the young professional coming out of school into some hotshot new company,” Zach says.

In his work with the New York State Society of CPAs, Zach hopes to introduce a new, modern perspective on the industry. Part of that is showing students what accounting can be beyond the debits and credits. 

It's not just tax returns. You've got people working on AI projects. You've got next generation engagements happening. We're working with big tech.

Zach Gordon, Propeller Industries

According to him, lending visibility to the intersection of accounting with all other sectors is what will push accounting out of its stuffy confines. And it’s going to happen sooner than expected.

Zach and Stuart discuss how some of the Big Four accounting firms announced lowering the mandatory retirement age to 55 from 62. An earlier exit from accounting veterans means more room for the next generation to come in, move up, and make an impact. 

Value beyond the billable

Working with two cutting-edge industries gives Zach a progressive perspective on the future of accounting. By tackling more difficult issues like the taxation and auditing of cannabis and crypto, he hopes to leave accounting in better shape than he found it. 

For starters, Zach’s found opportunities to reduce the amount of hours needed for certain tasks. In one example, he was expected to bill for about $10,000 worth of hours, but ended up only needing to do two hours of work and billing $849.

“I got yelled at by someone—‘Why didn't you bill more hours?Now we're going to have to return the money.’ But to me, why do we do this? I thought the whole idea was to become profitable here,” Zach explains. “That's the dream, isn't it? That we're able to produce something valuable?”

Zach thinks that as fresh new talent enters accounting, efficiency will become increasingly important in creating value. And with that new era will come a new way of pricing services. In short, the tide will turn—and it’s just a matter of time before this new approach becomes the standard.