What is a CPA Attestation and what is required to be included?

The CPA Attestation is a financial statement listing the assets used to provide the total capitalization amounts that are required by Rule 11 in the Marihuana Licenses Rule Set (R 420.11) must meet the following criteria:

  • 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
  • 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
  • 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 if there is no lien or encumbrance on the asset.

 

The capitalization requirements found in Rule 11 must only be met for the first state operating license for which the applicant intends to apply.  No further capitalization is required for additional licenses that the licensee may seek.    If the applicant decides to change the license type for which it intends to seek initial licensure, capitalization will be reassessed at that time and adjusted, if necessary, to meet the capitalization requirements for that type facility.  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.

 

Additional CPA Resources:
CPA Guidance
CPA Attestation Form
Statement of Money Lender