HomeMy WebLinkAboutLARA Advisory Bulletin - CPA Attestations LALRA
LICENSING AND REGULATORY AFFAIRS
CUSTOMER DRIVEN.BUSINESS MINDED. ADVISORY B ULLLTIN
February 2, 2018
Certified Public Accountant (CPA) Attestations
The purpose of this bulletin is intended to address requests for clarification on the issue of CPA
attestations and capitalization as provided in Rule 11 of the Emergency Administrative Rules filed on
December 4, 2017.
• For clarification purposes,the CPA attested financial statement of assets used to provide the total
capitalization amounts that are required by Rule 11 must meet the following criteria:
1. It must be prepared and attested by an individual who is a CPA in any state or
prepared and attested by a CPA firm from any state. Funds originating from a foreign
country must be attested by the equivalent of a CPA in that foreign country and must
then be attested by a CPA in the United States.AND
2. It must be an attested service as defined in MCL 339.720(1)(a)(v) (or the foreign
equivalent)—meaning it must be an examination, review, or agreed-upon procedures
engagement to be performed in accordance with the statements on standards for
attestation engagement, other than an examination of prospective financial
information. A compilation is not an attested service under MCL 339.720(1)(a)(v)and
does not meet the attestation requirements of Rule 11.AND
3. It must document both the sources and value of each asset used to provide
capitalization and total amount of the applicant's capitalization to operate and
maintain the proposed marihuana facility. Proof must be provided that there is no
lien or encumbrance on the asset.
• The capitalization requirements found in Rule 11 must be met individually for each state
operating license (by type of marihuana facility)for which the applicant intends to apply. Persons
intending to apply for multiple state operating licenses must provide a statement(s) attesting to
assets to meet the capitalization requirements for each state operating license. The value of an
asset may only be used to meet the capitalization for one state operating license.
• The sources of capitalization provided by persons or entities on behalf of the applicant(e.g.loans,
lines of credit) must be accompanied by a Statement of Money Lender, be supported by
documents creating and securing the debt, and must be attested by a CPA as indicated above.
The CPA attestation of those funds may be included in the applicant's CPA attestation of total
capitalization or may be provided by a separate CPA attestation of the loaned funds.
This advisory bulletin does not constitute legal advice and is subject to change.It is intended to provide clarification only as to the
Department of Licensing and Regulatory Affairs'Emergency Administrative Rules which were promulgated on December 4,2017
and 2018 PA 10,Licensees are encouraged to seek legal counsel to ensure their operations comply with the Medical Marihuana
Facilities Licensing Act,as amended and associated Emergency Administrative Rules.
A complete copy of the Emergency Administrative Rules can be found at:
http://www.mich igan.gov/lara/0,4601,7-154-79571_83994---,00.htm I
More information on the BMMR can be found at the bureau's website:www.michigan.gov/bmmr
For more information about LARA,please visit www,michigan.gov/lara
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