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Michigan Cannabis Regulatory Agency (CRA) Issues $116K in Fines To 8 Canabis Businesses For Failure To Submit Corrrect Financial Reports

The Cannabis Regulatory Agency (CRA) began publishing monthly disciplinary action reports related to fines and suspensions issued against Michigan’s marijuana businesses for violating agency rules.

The first publicized report for August included fines to eight businesses equaling up to $116,000 for failure to submit the proper financial reports by the deadline. No other violations were targeted.

“What I’ve heard is the CRA is filing complaints and assessing fines,” said Simon M. Gumma, a certified public accountant and president of Gumma Acho in Troy. “I think they can even suspend or revoke a license for not being compliant. I don’t know that it’s gotten to that point.”

Marijuana businesses are required to submit annual financial reports, similar to audits, conducted by outside accounting companies. The businesses are asked to document and justify their finances.

For instance, the point-of-sale tills should match the sales data in the statewide monitoring Marijuana Enforcement Tracking Reporting and Compliance system, better known as METRC. Companies are asked to verify that.

If they report facility upgrades, they should have the receipts to prove it, said Gumma, whose firm specializes in cannabis industry accounting.

The CRA fined businesses between $8,000 and $10,000 for each overdue statement. They were usually in excess of a month late, according to formal complaints reviewed on the state website. Some had overdue statements for multiple licenses and others were fined for violations that occurred up to ten months ago, related to 2020 statements.

Completing the annual financial statement usually takes between 30 and 60 hours, depending on the size of the business, amount of sales and accuracy of record keeping, Gumma said.

“I think businesses either are not fully aware of the requirements or … can barely afford to stay open, let along hire a CPA that’s going to charge them thousands of dollars to prepare this report,” he said.

MLive requested comment from all of the businesses fined in August. Only one replied.

Read more at https://www.mlive.com/public-interest/2022/09/michigan-marijuana-businesses-to-pay-100000-plus-in-fines-heres-why.html

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