What Operational Changes Require Notification to the CRA?
A detailed guide to understanding material change reporting requirements for Michigan cannabis licensees
Failing to report a material change to Michigan’s Cannabis Regulatory Agency (CRA) is a Tier 2 violation that can cost licensees thousands in fines. This guide explains what qualifies as a “material change,” how and when to report, and best practices to stay compliant.
Summary
Under Michigan cannabis rules, licensees must notify the CRA of any material change in operations, ownership, management, security, facility layout, or financial status. Failure to notify is a Tier 2 violation under the CRA Disciplinary Guidelines, with penalties ranging from $1,000 to $5,000 per occurrence. Notification requirements are defined in M.A.C. R 420.102(1) and M.A.C. R 420.404(2)(b), as supplemented by the CRA Compliance Best Practice Guide (July 2025) and CRA Disciplinary Guidelines (July 2025).
What Counts as a Material Change?
Reportable changes include:
Ownership Changes
Adding or removing stakeholders
Changing percentage of ownership
Facility Layout Modifications
Moving walls, adding rooms, altering exits or access points
Security Plan Alterations
Changing alarm providers, camera placement, or system configuration
Managerial Changes
Appointing or removing persons responsible for daily operations
Operational Plan Changes
Introducing new product types or business models
Financial Backer Modifications
Adding investors, changing funding arrangements
Contact Information Updates
New phone number, mailing address, or primary contact
Ownership Entity Restructuring
Creating holding companies or converting entity type
💡 Pro Tip: If the change would have impacted the original license application, it’s likely a material change.
How to Notify the CRA
You can notify via:
CRA Online Portal (preferred)
Email to your assigned Field Analyst
Mail or in-person delivery
Some changes require preapproval; others must be reported within 10 days. Always verify rule-specific timelines.
Consequences of Noncompliance
Per the CRA Disciplinary Guidelines (July 2025):
Violation: Failure to notify of a material change
Tier: 2 (Moderate Severity)
Penalty Range: $1,000–$5,000 per occurrence
CRA inspectors compare current operations with filed diagrams, ownership records, and plans. Discrepancies without documented notice often result in citations.
Best Practices for Compliance
Maintain a Material Change Checklist for management review
Keep a Change Log with CRA notification dates and proof of submission
Assign a compliance officer to review CRA guidance quarterly
Update internal SOPs to include reporting obligations
💡 Pro Tip: Always save portal submission receipts or email confirmations.
Final Answer
Michigan cannabis licensees must notify the CRA of any operational, ownership, facility, management, security, or financial changes that meet the definition of a “material change.” Failure to notify is a Tier 2 violation subject to fines. Report via the CRA portal, email, or in writing, and maintain documentation to prove compliance.
Glossary of Terms
Material Change – An alteration in operations, ownership, facility, security, management, or finances requiring CRA notification.
Tier 2 Violation – A moderate infraction under CRA disciplinary rules, carrying financial penalties.
Field Analyst – CRA compliance staff assigned to specific licensees.
Citations
M.A.C. R 420.102(1) – Definition of Material Change
M.A.C. R 420.404(2)(b) – Notification Requirements
CRA Compliance Best Practice Guide (July 2025)
CRA Disciplinary Guidelines (July 2025)
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How to Prepare for a CRA Unannounced Inspection
What Are the CRA’s Violation Types—and What Do They Mean for Your License?
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