1 Colo. Code Regs. § 212-3-3-915
Current through Register Vol. 48, No. 1, January 10, 2025
Section 1 CCR 212-3-3-915 - Independent Audit May Be RequiredBasis and Purpose - 3-915
The statutory authority for this rule includes but is not limited to sections 44-10-202(1)(c), 44-10-203(1)(c), 44-10-203(1)(k), and 44-10-1001(1), C.R.S. The Marijuana Code mandates that a Regulated Marijuana Business must pay for an audit when the State Licensing Authority deems an audit necessary. This rule explains when an audit may be deemed necessary and sets forth possible consequences of a Regulated Marijuana Business's refusal to cooperate or pay for the audit. This Rule 3-915 was previously Rules M and R 903, 1 CCR 212-1 and 1 CCR 212-2.
A.State Licensing Authority May Require Independent Audit. 1. When the State Licensing Authority deems it necessary, it may require a Regulated Marijuana Business to undergo an audit by an independent accountant. The scope of the audit may include, but need not be limited, to financial transactions and inventory control measures.2. In such instances, the Division may attempt to mutually agree upon the selection of the independent accountant with a Regulated Marijuana Business. However, the Division always retains the right to select the independent accountant regardless of whether mutual agreement can be reached. The independent accountant shall be a certified public accountant licensed by, and in good standing with, the Colorado State Board of Accountancy.3. The Regulated Marijuana Business will be responsible for all direct costs associated with the independent audit.B.When Independent Audit Is Necessary. The State Licensing Authority has discretion to determine when an audit by an independent accountant is necessary. The following is a non-exhaustive list of examples that may justify an independent audit:1. A Regulated Marijuana Business does not provide requested records to the Division;2. The Division has reason to believe that the Regulated Marijuana Business does not properly maintain its business records;3. A Regulated Marijuana Business has a prior violation related to recordkeeping or inventory control;4. A Regulated Marijuana Business has a prior violation related to diversion.5. As determined by the Division, the scope of an audit conducted by the Division would be so extensive as to jeopardize the regular duties and responsibilities of the Division's audit or enforcement staff.C.Compliance Required. A Regulated Marijuana Business must pay for and timely cooperate with the State Licensing Authority's requirement that it undergo an audit in accordance with this Rule.42 CR 23, December 10, 2019, effective 1/1/202043 CR 21, November 10, 2020, effective 1/1/202144 CR 07, April 10, 2021, effective 5/1/202144 CR 13, July 10, 2021, effective 8/1/202144 CR 23, December 10, 2021, effective 1/1/202245 CR 21, November 10, 2022, effective 12/1/202247 CR 21, November 10, 2024, effective 12/4/2024