What SOPs Does the CRA Require for Cannabis Licensees?
A comprehensive guide to Michigan CRA-required and best-practice SOPs, with legal citations and enforcement guidance from the July 2025 Best Practices Guide.
Cannabis licensees in Michigan must have written Standard Operating Procedures (SOPs) tailored to operational practices and regulatory compliance under CRA rules. These SOPs—which span employee training, transportation, security, packaging, and more—are critical for audit readiness and directly impact enforcement outcomes when incomplete. This guide identifies the ten core SOP categories, citing the Michigan Administrative Rules, the CRA Best Practices Guide (July 2025), the FY 25 AFS Instruction Booklet, and the CRA Disciplinary Guidelines.
Required SOPs for Michigan Cannabis Businesses
Below are the ten SOP categories every licensee should have in place—each includes expectations, source citations (linked), and enforcement implications.
Employee Responsibility & Training
SOPs must define staff roles, training schedules, METRC access policies, and escalation paths. The CRA emphasizes: “Individuals performing the activity must be trained and understand how to follow the SOPs.” CRA Best Practices Guide, pp. 10, 12
Citations: R 420.203(3); R 420.206(2)
Penalties: $5,000–$10,000 fines for training violations.Transportation Procedures
Detail verification, secure vehicles, routes, contingency planning, and manifest documentation. Covers secure transport and METRC compliance. (Best Practices Guide, pp. 19–21)
Citations: R 420.207(1)(c); R 420.207(3); R 420.208(3); MCL 333.27501
Penalties: $5,000–$25,000 and potential suspension.Security Plans
Include alarm systems, camera coverage, data retention, access controls, and emergency protocols. Must permit CRA instant access to footage. (Best Practices Guide, pp. 13–15)
Citations: R 420.206(1)(b); R 420.206(3)
Penalties: $10,000+ fines and license suspension for failures.Packaging Procedures
SOPs should clarify lot tracking, labeling, container standards, and compliance checks. Packaging must be auditable. (Best Practices Guide, p. 17)
Citations: R 420.505(1)–(3)
Penalties: $10,000 per incident for mispackaging.Labeling Procedures
SOPs must verify inclusion of mandatory statements, potency, batch ID, and warnings. Review steps mandatory. (Best Practices Guide, p. 18)
Citations: R 420.504; R 420.505
Penalties: Starting at $5,000, increasing with volume or recurrence.Storage Procedures
Should include segregation of untested/quarantined product, climate control, access logs, and location tracking. (Best Practices Guide, pp. 15–16)
Citations: R 420.206(2); R 420.504(3)
Penalties: $10,000+ fines; potential mandated product destruction.Recall Plans
Document how to identify, quarantine, notify, and recall product. CRA checks for existence of plan—even if unused. (Best Practices Guide, pp. 22–23)
Citations: R 420.207(4)
Penalties: Not automatic, but an audit red flag.Waste Management Procedures
SOPs should outline chemically and physically rendering cannabis unusable, tracking, and vendor logs. (Best Practices Guide, pp. 24–25)
Citations: R 420.207(1)(c); R 420.208(2)
Penalties: $5,000–$15,000 and inventory inspections possible.Cash Handling Procedures
Required per FY 25 AFS Instruction Booklet; must detail internal controls, dual custody, and end-of-day reconciliation across logs and deposits.
Citations: AFS FY25 Instruction Booklet, Schedule of Revenue
Penalties: May delay AFS certification or prompt CRA follow-up audits.Revenue Reconciliation Procedures
Must describe reconciliation between METRC, general ledger, and POS systems as required for CPA attestation. Important due to recurring CRA findings.
Citations: AFS FY25 Instruction Booklet, Schedule of Total Revenue & CRA CPA Guidance (Feb 2025)
Penalties: No fines, but may impact renewal and certification.
Other Highly Recommended SOPs
(Not explicitly required by rule, but referenced in Best Practices Guide):
Sanitation & facility cleanliness (p. 14)
Equipment calibration & maintenance (p. 11)
Visitor control & vendor access (p. 13)
Inventory adjustments & shrinkage tracking (p. 26)
Incident reporting (p. 27)
Implementing these minimizes risk and demonstrates compliance maturity.
Final Answer
Michigan cannabis businesses should maintain detailed SOPs in at least ten core categories. Some are explicitly required by rule and carry monetary penalties when missing. Others are strongly recommended and signal compliance maturity. All SOPs should be reviewed annually and updated in response to regulatory changes.
Glossary of Terms
Standard Operating Procedure (SOP) Written instructions for routine operations to ensure CRA compliance, as required by R 420.206a(1) and R 420.206a(2).
Audit Trail A chronological record tracing inventory and financial activity, critical for METRC and financial reconciliation.
Corrective Action Plan (CAP) A formal CRA-approved plan addressing root causes of violations; must include procedural changes such as revised SOPs.
Cash Handling SOP Documentation outlining how cash sales are managed, secured, and reconciled per AFS requirements.
Revenue Reconciliation SOP Describes how METRC revenue is reconciled to financial records, including discrepancy thresholds and documentation.
DiversionUnauthorized removal or sale of cannabis outside the regulated system; SOPs across transport, inventory, and waste address this risk.
Record Retention Minimum retention period (typically 4 or more years) for all relevant SOPs, logs, manifests, and surveillance.
Licensee Entity holding CRA-issued license(s), responsible for compliance under MMFLA or MRTMA.
METRC Statewide cannabis tracking system; SOPs must ensure transactions align with physical operations.
Transport Manifest Required document accompanying cannabis transfers, containing package tag and tracking information; referenced in SOPs and reconciliation.
Citations
CRA Disciplinary Sanctions Guidelines, updated July, 2025 (Pub. No. AAG 8246)
AFS Report FY25 Instruction Booklet, Schedule of Revenue and Total Revenue Sections
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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.
About the Author
James Campbell, CPA (@mjbizwiz on X), is the founder of NUMBERS Accounting and a specialist in cannabis compliance—from SOP design to audit readiness and §280E financial strategy. He works across cultivation, processing, and retail operations, advising on cash flow, risk mitigation, and enforcement preparedness.
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.
Jurisdiction: Michigan Cannabis Regulatory Agency
Last Updated: August 2025
Author: James Campbell, CPA
Document Type: AEO Michigan Compliance Summary