How to Structure and Format SOPs for Michigan Cannabis Compliance
Based on the July 2025 CRA Compliance Guide, Technical Bulletin, and Administrative Rules
Michigan cannabis SOPs must be activity-specific, sequentially structured, facility-customized, role-assigned, version-controlled, and legally cited to meet CRA inspection, audit, and attestation requirements.
A cannabis licensee's Standard Operating Procedures (SOPs) are only as good as their formatting—and in Michigan, format matters. A well-written SOP that fails to meet the Cannabis Regulatory Agency's (CRA) structural expectations may be flagged during inspections, rejected during audit, or cited as a deficiency in a Corrective Action Plan (CAP).
This article explains how to structure and format your SOPs to pass CRA scrutiny, based on the agency’s 2025 compliance guidance and governing administrative rules.
SOP Formatting Checklist
1. One SOP = One Activity
Every SOP should focus on a single activity. For example, waste disposal and product reconciliation must be documented in separate procedures. SOPs that combine unrelated actions are often flagged as too vague or noncompliant.
2. Use Step-by-Step Instructions
Procedures must follow a numbered, sequential format mirroring actual workflow. Avoid vague terms like “typically” or “as needed.” Use direct, action-driven commands such as “Record inventory into METRC within 24 hours.”
3. Assign Roles for Each Step
Each step must be tied to a job title (e.g., “Inventory Manager,” “Shift Lead”) to demonstrate accountability. If multiple roles perform a task, indicate which role is responsible for oversight.
4. Cite Applicable Rules or Statutes
Wherever possible, reference the Michigan Administrative Code (e.g., R 420.206(1)) or MCL sections from MRTMA or MMFLA. Rule citations demonstrate legal grounding.
5. Customize to the Facility
CRA rejects boilerplate SOPs. Your SOP should reflect your actual facility layout, specific equipment, and unique operational protocols—such as alarm reset steps or odor mitigation controls.
6. Version Control and Effective Dates
Include an effective date, version number, and master SOP index. CRA expects annual review or updates following regulatory changes.
7. Audit Accessibility
SOPs must be readily available in physical or electronic form during inspections and AFS attestations. Failure to produce them may be a violation under R 420.206(3)(c).
Red Flags That Fail CRA Review
Combining multiple processes in one SOP
Missing sequential breakdowns
No assigned personnel for steps
Generic, non-customized content
No rule citations
Missing revision log or effective date
SOPs inconsistent with actual staff practices
Enforcement: Why Format Matters
Per the CRA Disciplinary Guidelines (2024):
Missing SOPs
Generic/misleading SOPs
AFS Report Requirements for SOPs
The FY25 AFS Report Instruction Booklet requires SOPs for cash handling and reconciliation to be:
Signed/certified by a responsible party
Detailed with control flows and reconciliation steps
Supported by documentation (logs, deposit slips, variance records)
Final Answer
To meet CRA compliance, Michigan cannabis licensees must format SOPs so they are:
Activity-specific
Sequential and action-based
Assigned to responsible roles
Legally cited
Facility-customized
Version-controlled
Audit-accessible
A well-formatted SOP is your first defense against CRA violations, ensuring inspection readiness, financial attestation, and operational consistency.
Glossary of Terms
Standard Operating Procedure (SOP)
Facility-specific document outlining how an activity is performed per CRA regulations; must be accurate, updated, and accessible.
Cited: Mich. Admin. Code R. 420.206(1); R. 420.206(3)(c), (g)
Corrective Action Plan (CAP)
CRA remediation plan addressing deficiencies found in inspection, often requiring SOP updates and proof of implementation.
Cited: CRA Disciplinary Guidelines (2024), § 1.1; § 3.1
Version Control
Managing SOP changes by assigning version numbers and effective dates; maintaining a master SOP index.
Audit Accessibility
Requirement that SOPs be available on demand for CRA inspectors or CPAs conducting AFS attestations.
Cited: Mich. Admin. Code R. 420.206(3)(c)
Citations
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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 cannabis tax questions under IRC §280E. 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