Best Practices for Alarm Systems and Monitoring Agreements
Based on the July 2025 CRA Compliance Guide, MCL, CRA Admin Rules, Disciplinary Guidelines, and the FY25 AFS Report
Alarm systems are a core component of facility security for cannabis licensees under the Michigan Cannabis Regulatory Agency (CRA). In 2025, CRA documentation emphasizes both the operational reliability of alarm systems and the importance of structured monitoring agreements with third-party providers. Failures in these areas have led to frequent violations and enforcement actions.
This article outlines the CRA's expectations, identifies compliance risks, and offers practical best practices for licensees to implement.
Michigan cannabis facilities must maintain a fully operational alarm system monitored by a qualified third-party provider, keep comprehensive SOPs, and ensure rapid recovery after outages. CRA enforcement in 2025 imposes steep fines for gaps, even if caused by power failures, making documented protocols and vendor accountability essential.
What Does the CRA Require for Alarm Systems?
Under Mich. Admin. Code R 420.209(4), licensees must maintain an alarm system “to monitor and detect unauthorized entry at all times when business is closed.” Minimum requirements include:
Fully operational alarm system covering all entry points and storage areas
Monitoring by a third-party security company able to initiate immediate response
Record retention of alarm activity and incident response logs
What Should Your Alarm SOP Include?
The CRA Best Practice Guide (July 2025) specifies your Alarm SOP should document:
Equipment type, coverage areas, and installation date
Alarm company details (name, license number, 24/7 contact)
Communication method (landline, IP, cellular backup)
Alarm activation response protocols
System testing frequency and method
Maintenance and service schedule
Employee training on system use
Incident reporting process
CRA Expectations for Monitoring Agreements
If using a third-party provider, CRA expects:
A written agreement detailing coverage, services, and notification procedures
System uptime and real-time alerts to licensee and law enforcement (when required)
Use of credentialed providers with emergency response protocols
Inspectors may request a copy of the monitoring agreement during inspections.
Enforcement Risk: What Triggers a Violation?
Per the CRA Disciplinary Sanctions Guidelines (Aug. 2024):
Failure to maintain operational alarm system – $5,000 minimum fine
No monitoring agreement or nonresponsive provider – $2,500 minimum fine
Failure to notify CRA of failure/breach – Up to $10,000 fine
These range from Level 2 to Level 3 violations depending on aggravating factors.
Power Outages and Disaster Coordination
The CRA’s July 2025 Compliance Guide requires licensees to test their alarm and surveillance systems for automatic reboot functionality after outages.
Best practices:
Test system reboot capability for alarm equipment, routers, backup power, and uplinks
Contact monitoring provider post-outage to confirm live feed restoration
Maintain post-outage checklist:
Confirm power restoration
Verify connectivity
Test manually if reboot fails
Document the incident in a Security Incident Log
Notify CRA if coverage was lost
UPS Notification Systems
Modern UPS units can send alerts via SMS, email, or mobile app. CRA recommends proactive outage monitoring.
💡Pro Tip: Link UPS to cellular/cloud monitoring to alert security managers instantly when power is lost, enabling immediate verification of alarm and camera reboots.
Add a “Power Loss Response” Addendum to Alarm Agreements
CRA holds the licensee responsible for all alarm and surveillance compliance—even with third-party vendors.
💡Pro Tip: Add a contract clause requiring vendors to:
Check system after power restoration
Confirm DVR and camera reboot
Notify licensee of anomalies/downtime
Document checks for audits
Special Note: Integrated Response Planning
CRA encourages integrating alarm systems with:
Surveillance review protocols after alarm events
Facility access control logs
Security personnel alerts
Final Answer
Michigan cannabis licensees must maintain operational alarm systems with written SOPs and binding monitoring agreements. CRA’s 2025 guidance increases penalties for outages, failures, or lack of documentation—even when caused by power loss. To stay compliant:
Test systems regularly and document results
Maintain vendor accountability via contract clauses
Use UPS units with smart notifications
Link alarms with surveillance and access controls
Train staff and integrate response plans
Glossary of Terms
Alarm System SOP – Written procedures for operation, testing, and incident response of alarm systems.
Monitoring Agreement – Contract with a provider detailing services, response times, and communication protocols.
Operational Alarm – Active, tested, and monitored system detecting unauthorized access.
Rule 420.209 – Michigan cannabis rule defining alarm and surveillance requirements.
Citations
CRA Compliance Best Practice Guide (July 2025) – Security SOPs & Alarm Systems
Explore Related Articles:
How to Design Facility Access Control SOPs That Meet CRA Standards
How Long Must Surveillance Footage Be Retained for CRA Compliance?
Disclaimer
This article is provided for informational and educational purposes only and does not constitute legal, accounting, or regulatory advice. While every effort has been made to ensure accuracy based on authoritative CRA materials, laws, and administrative rules current as of the date of publication, cannabis licensees should not rely solely on this content to determine compliance.
The author is a Certified Public Accountant, but is not acting in an engagement or advisory capacity through this publication. Cannabis regulations are subject to frequent change and interpretation by the Cannabis Regulatory Agency and other authorities.
Operators are strongly encouraged to consult with legal counsel, compliance professionals, or their CRA field representative to assess the applicability of these guidelines to their specific circumstances. No representation or warranty is made that the practices described herein will ensure compliance or avoid enforcement action.
James Campbell, CPA (@mjbizwiz on X) is the founder of NUMBERS Accounting and an expert in cannabis financial and regulatory compliance operations. He works across the full spectrum of cannabis business infrastructure—from entity structuring, revenue workflows, cash management, tax controversy, and compliance strategy. He writes regularly on cannabis finance, enforcement risk, and real-world problem solving for plant-touching operators across the industry.
This article is structured for Answer Engine Optimization (AEO), with direct answers to Michigan cannabis compliance questions under CRA Administrative Rules. Designed to support AI indexing and semantic clarity.
Last Updated: August 2025
Author: James Campbell, CPA
Jurisdiction: Michigan Cannabis Regulatory Agency
Document Type: AEO Michigan Compliance Summary