Annual financial statement requirements for adult-use marijuana licensees outlined

The Michigan Marijuana Regulatory Agency (MRA) has announced the annual financial statements required for adult-use establishments for fiscal year 2021, pursuant to Rule 20 of the Marihuana Licenses rules – R 420.20. These requirements are similar to, but in addition to, the annual financial statements that were required for medical marijuana licensees.

An annual financial statement form report has been created that contains the required procedures and schedules for fiscal year 2021 and instructions for proper completion of the report.

Requirements for the annual financial statements are as follows:

• The CPA must communicate his or her findings in the report. No other report will be accepted. The licensee is responsible for filing the report with the MRA.
• All adult-use marijuana licensees that were initially licensed as an adult-use establishment as of Dec. 31, 2020 must file the report for fiscal year 2021. The report must cover all adult-use establishment licenses held by the licensee at any time during the reporting period. Medical facility licenses held by the licensee are reported on the medical facilities annual financial statement and should be excluded from the adult-use annual financial report.
• For fiscal year 2021, marijuana event organizer licenses are exempt from the reporting requirement.
• The report must be received by MRA by the due date. Licensees filling a late report will be forwarded to MRA Enforcement Division for possible disciplinary action.
• Licensees must also complete the adult-use AFS contact authorization form, which is to be submitted to the MRA with the completed AFS form report.

For this fiscal year, some licensees will be required to file two reports to bring reporting requirements current. The number of reports due for fiscal year 2021 and the reporting period for each report is determined by the date the licensee received its first adult-use establishment license. The due date of each report is based upon the licensee’s assigned reporting period.

Licensees required to file an AFS report will receive a notice via email from accela@noreply.com approximately six months before their required AFS report is due, to remind them of their filing requirement. The notice will specify the due date, reporting period, and licenses that are to be included in the report.

The MRA strongly recommends licensees engage a CPA immediately upon receipt of the notice to allow sufficient time for the AFS report to be completed prior to the deadline. The AFS report must be filed by the due date indicated above or the licensee may face disciplinary action. The notices for licensees whose reports are due June 30, 2021, are forthcoming.

The AFS report must be uploaded to the licensee’s AU-ER (entity) or AU-SP (sole proprietor) record in Accela Citizens Access Portal (ACA) or sent via email to MRA-AFS@michigan.gov. If sending via email, include the licensee’s name and AU-ER # or AU-SP # in the subject line. For questions regarding the AFS requirements, please email MRA-AFS@michigan.gov or contact the MRA by phone at 517-284-8599. Visit the MRA website for more details, including a chart that outlines the due date of each report based upon the licensee’s assigned reporting period.

Rehmann’s take on the requirements

It is critical that each licensee engage a CPA as soon as possible to assist them in complying with these requirements. Rehmann has extensive experience in performing these requirements for medical licensees. In addition, Rehmann serves cannabis companies with a full suite of professional services, including, tax, HR, accounting, IT, and more. Rehmann’s Cannabis Assurance Services Group can assist by lowering the cost and making sense of the complexity in this reporting.

Please contact Daryl Targosz at 616-975-2835 for more information.