Are you ready for the annual financial statement report requirements of the Medical Marijuana Facilities Licensing Act (MMFLA) for the fiscal year 2020? This financial reporting for medical marijuana businesses is vital and it takes time to complete.
It’s a lot to consider—but your license depends on it!
Strict compliance with this section of the Act is necessary for all licensees operating under the MMFLA. The report must be received by the Marijuana Regulatory Agency (MRA) by the due date—which varies depending on when your license was issued. Licensees filing a late report will be forwarded to the MRA Enforcement Division for possible disciplinary action, including possible license suspension. The due date for these reports is October 31, 2020 for most licensees or January 31, 2021 depending on when the initial licensure was granted. See the June 3, 2020 MRA Advisory Bulletin for the complete schedule of due dates and additional information.
Hungerford Nichols CPAs + Advisors and Cannalex Law advises all its clients on the importance of maintaining up-to-date financial records, but to clients operating in the cannabis industry they strongly emphasize the importance of detailed record-keeping enough for situations like this and IRS audits.
Very detailed records are absolutely necessary because licensees are required by the MMFLA to submit to the board Annual Financial Statements for their business operations. The financial statements are required to be reviewed by a certified public accountant by performing the agreed-upon procedures established by the state. The details of the reporting are set out in the Advisory Bulletins and in forms available from the MRA. Remember, the CPA firm puts its name on the bottom line of the report. It will not do so until the work is complete and accurate. A report detailing deficiencies will not be good for the business.
This type of attestation engagement requires a large number of resources from a CPA firm. It is also very time consuming to gather the necessary documentation and perform the necessary procedures required by the MRA. Therefore, licensees need to be proactive in planning for this engagement as it may take a CPA firm 3-8 weeks or longer to complete the engagement depending on the size of the licensee and the accuracy of their record-keeping.
Meeting this deadline is necessary for the licensee to stay in good standing with the MRA Therefore we recommend all licensees to contact a CPA and engage their services by the end of August 2020 to meet the October 31, 2020 deadline. Hungerford Nichols has qualified professionals to perform the agreed-upon procedure engagement required by the state as well as experience serving companies in the cannabis industry.
Please contact Andrea Russel, CPA at 616-754-8888 for more information or assistance with your annual financial reporting for medical marijuana businesses.
Thanks to Andrea for this guest blog.