The Michigan Regulatory Agency issued an advisory bulletin on October 3, 2019 to outline the requirement of the annual financial statements required as part of the marijuana licensing renewal processes for licensed medical marijuana facilities. The requirement initially applies to facilities that were licensed prior to August 1, 2018. The annual financial statement reporting is required to be an Agreed Upon Procedures report performed by an independent CPA which could include seven tests to cover the following areas:
Testing two monthly revenue transactions against supporting documents
Comparing two monthly disbursement transactions to supporting documents
Testing payroll tax compliance
Review employment and contractor relationships
Identify equity distributions and compare to respective ownership interest of each equity owner
Further review of licensing agreements
Testing of excise tax compliance (for provisioning centers only)
Certain procedures are applicable on an individual license basis while others are on a collective basis. The due date of the initial submission is December 31, 2019 for those licensed prior to August 1, 2018. Entities licensed between August 1, 2018 through July 31, 2019 will be required to submit their reports with renewals prior to December 31, 2020.
We have a team of experienced professionals specializing in the cannabis industry. We can assist with the specific procedures required for a license renewal.