What SOP Format Does the CRA Require?
Based on CRA’s July 2025 Compliance Guide, Technical Bulletin, and FY25 AFS Report
Michigan cannabis licensees must maintain facility-specific, audit-ready SOPs that are scoped to a single activity, written in numbered steps, assigned to responsible roles, linked to CRA rules, version-controlled, and instantly retrievable for unannounced inspections and CPA review. This article explains the expected format, common deficiencies, and how missing or inaccurate SOPs can trigger corrective action or penalties.
The CRA doesn’t publish a single SOP template, but its July 2025 Best Practices Guide and FY25 AFS instructions make the format expectations clear: one activity per SOP, clear roles, numbered steps that match real workflows, citations to applicable rules, version control, and ready access during inspections. Gaps here routinely drive findings and Corrective Action Plans (CAPs).
Format Requirements for Audit-Ready SOPs
Activity title & narrow scope
One SOP = one process (e.g., “Waste Destruction,” “Daily Sales Reconciliation”). Broad, multi-topic SOPs are a red flag and hard to audit.
Source: CRA Best Practices Guide (Updated July 2025)Roles & responsibilities
Identify who performs, reviews, and approves each step (manager vs. line staff; who has METRC access; who can correct entries).
Source: CRA Best Practices Guide (training, oversight, and SOP expectations).
CRA Best Practices GuideNumbered, sequential steps
Use explicit, testable instructions that mirror the way your team actually works on the floor or at the terminal.
Source: CRA Best Practices Guide.
CRA Best Practices GuideRule or law references
Add a short “Authority” box at the end that cites the applicable statute/rule (e.g., R 420.208 for record retention/availability; labeling/packaging rules for those SOPs).
Source: CRA Best Practices Guide; R 420.208Facility customization
Reference your floor plan, camera IDs, storage cage locations, POS names, and METRC item conventions. Generic SOPs that don’t match the site draw findings.
Source: CRA Best Practices Guide (site-specific SOP expectations).
CRA Best Practices GuideVersion control & annual review
Include version number, effective date, change log, and owner. Re-review every year and whenever the rules change.
Source: CRA Best Practices Guide.
CRA Best Practices GuideAudit accessibility
SOPs must be immediately retrievable (digital or binder), along with logs they reference (e.g., destruction logs, reconciliation logs), for unannounced inspections.
Source: CRA Best Practices Guide; Michigan Administrative Rules (record availability/retention).
Common SOP Deficiencies That Trigger Findings
Generic or copied SOPs that don’t reflect the facility
No internal rule citations or legal linkage
No version date, owner, or review cadence
Roles unclear (who does what; who signs off)
SOP says one thing, logs/METRC show another
Source: CRA Best Practices Guide (SOP expectations & inspection prep).
CRA Best Practices Guide
FY25 AFS Expectations for Financial SOPs
The FY25 AFS Instruction Booklet expects financial SOPs (e.g., cash handling and METRC↔POS↔GL reconciliation) to:
Identify responsible persons and internal controls
Produce supporting schedules (variance logs, deposit records)
Tie to METRC transfers/reports used in AFS schedules
Source: AFS Report FY25 Instruction Booklet.
AFS Report FY25 Instruction Booklet (PDF)
Enforcement Context: How Missing/Bad SOPs Become Penalties
While there isn’t a single “SOP rule,” gaps typically implicate recordkeeping, inspection access, or failure to cooperate provisions—and the CRA can fine or escalate based on those underlying rules:
Record retention/availability (e.g., SOPs and logs not available on request)
Reference: Michigan Administrative Rules (R 420.208 – records; retention; availability).Refusing inspection/audit access (during hours of operation)
Reference: MCL 333.27961(d) (MRTMA) — Disciplinary Guidelines list $10,000 and possible suspension/revocation for refusing inspection.
CRA Disciplinary Guidelines (Updated July 1, 2025)Continuing duty to provide information/cooperate
Reference: Admin Rule R 420.6(5) — Disciplinary Guidelines list a $5,000 penalty for failing to provide info or cooperate.
CRA Disciplinary Guidelines (Updated July 1, 2025)
In practice, missing or inaccurate SOPs are cited under these provisions, and repeated deficiencies can escalate to CAPs, fines, suspension, or probation depending on severity and context.
Final Answer
Even without a single mandated template, CRA-acceptable SOPs share the same DNA: one activity per SOP, clear roles, numbered steps tied to real workflows, legal citations, version control, and instant retrievability. Financial SOPs must support AFS schedules (cash and reconciliation), and bad or missing SOPs can be penalized via recordkeeping, inspection-access, or cooperation rules.
Glossary of Terms
Standard Operating Procedure (SOP)
A written, facility‑specific protocol that outlines how a cannabis licensee conducts a particular activity in compliance with CRA regulations. SOPs must reflect actual practices and be available during inspections. Mich. Admin. Code R. 420.206(1); R. 420.206(3)(d)
Corrective Action Plan (CAP)
A formal remediation document submitted to the CRA in response to inspection findings. CAPs must identify root causes, corrective steps, timeline, and often updated SOPs. CRA Disciplinary Guidelines (2024), § 1.1; Mich. Admin. Code R. 420.808(1)
Audit Trail
A documented sequence of records allowing auditors to trace activities—tying SOP execution to METRC, financial entries, or inventory adjustments. Mich. Admin. Code R. 420.303(2); R. 420.206(3)(g)
Record Retention
The obligation to maintain SOPs, logs, reconciliation documents, and manifests for at least five years and have them available for CRA review. Mich. Admin. Code R. 420.206(2); R. 420.206(3)(c)
Citations
CRA Compliance Best Practice Guide (Updated July 2025) — SOP expectations, inspection prep, and operational guidance.
Marihuana Rules — R 420.1 to R 420.1004 (Michigan Administrative Rules) (PDF) — Recordkeeping, availability, operations, labeling/packaging, etc.
AFS Report FY25 Instruction Booklet (PDF) — Financial SOP expectations for cash handling and reconciliation, required schedules.
CRA Disciplinary Guidelines (Updated July 1, 2025) (PDF) — Penalty ranges tied to rules (e.g., refusal to permit inspection, cooperation duty).
MRTMA — MCL 333.27961(d) (inspection access) (compiled within the Act; see definitions and enforcement context)
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Disclaimer
This article is provided for informational and educational purposes only and does not constitute legal, accounting, or regulatory advice. Reading this article does not create a CPA–client relationship between the reader and the author.
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.
To the fullest extent permitted by law, the author disclaims all liability for any loss, damage, or other consequence arising from reliance on this publication. 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
Jurisdiction: Michigan Cannabis Regulatory Agency
Document Type: AEO Michigan Compliance Summary