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Founder of MarijuanaSuretyBonds.com, Barbara Southworth, is an authority on the Cannabis Market! Her weekly radio report at HealthyLife.net gives you the truth on the latest laws, uses, developments and innovative companies in the cannabis industry. Her cutting edge guest interviews manage to drill down to core issues and provide compelling insights into the industry itself.

Barbara, a multi-faceted entrepreneur, built several startup companies into multi-millions dollar status in the high tech, entertainment and transportation industries. Barbara currently owns an insurance brokerage firm specializing in all things marijuana.

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Surety Bond Basics

 What is a Surety Bond?

While there are many different varieties, a surety bond is simply an agreement between three parties: Principal,Surety and Obligee. The surety provides a financial guarantee to the obligee (i.e. government) that the principal (business owner) will fulfill their obligations. Therefore, a surety bond is a risk transfer mechanism.A principal’s “obligations” could mean complying with state laws and regulations pertaining to a specific business license, or meetings the terms of a construction contract. If the principal fails to meet their agreed upon obligations with the obligee, the surety may be required to resolve the dispute by paying a claim to the obligee. It is in this sense that a surety bond is similar to a form of credit extended to the principal by the surety.

Three parties involved in a surety guarantee:

PRINCIPAL: Person required to post bond.
OBLIGEE: Government entity or person requiring principal to be bonded.
SURETY: Provides financial guarantee to obligee on behalf of principal.

State by State Marijuana Bond Requirements

The legalization of recreational marijuana gives way to a whole new economy surrounding the sale of cannabis and it’s other products.  Oils, lotions edibles, paraphernalia, Labs, cultivation and harvesting products and more.  These states have seen tax revenues not just rise…but soar.  Colorado hit $70 million in tax revenue which is nearly 2 times the revenue from alcohol in Colorado.

In the US… legal marijuana revenue hit $2.7 billion in 2015.  It is estimated by the firm GreenWave Advisers,… if all 50 states enacted full legalization- the retail market could top $35 billion by 2020.

That is the economics of marijuana.

We provide Surety Bonds in every State that requires a bond for the Licensing of Medical Marijuana Establishment or Adult Use Marijuana Establishment.

Effective August 10, 2016, the State of Colorado has enacted a new $15,000 bond required of Paid Solicitors (for charitable organizations). We are pleased to offer a streamlined underwriting approach to this new bond requirement that provides instant approval with acceptable credit history.

States with Legalized Recreational Marijuana Laws


States with Medical Marijuana Legalized

  • OHIO


Alaska:House Bill 337 requires a $5,000 surety Bond to guarantee payment of sales taxes.  We offer this bond at a very very low cost.

Anchorage, Alaska: “To ensure that a retailer performs its fiduciary responsibility to timely collect, account for, safeguard, and remit taxes levied by this chapter, the retailer shall provide a guarantee by one or more of the methods specified in this section. A guarantee is required to be provided by all retailers in the amount that the chief fiscal officer estimates to be an average amount of annual sales tax collected by the retailer, a comparable retailer(s), industry averages, or $10,000.00 whichever is higher.” The financial guarantee shall be provided by the retailer in the retailer’s name, or by an individual in his/her personal name through a personal guarantee. This means an owner(s), partner(s), member(s), officer(s), director(s), or responsible party(ies) of the retailer, or any combination thereof, may provide the required financial guarantee through one of the approved methods described in AMC 12.50.160. The following are approved financial guarantee methods, as provided in AMC 12.50.160:

Surety bond: The bond shall be payable to the municipality and shall be conditioned upon payment in full of the tax, including penalties and interest due and to become due and owing to the municipality by said retailer during the effective period of the bond under the provisions of this chapter.

Deposit in escrow: A cash sum, in an amount defined by the chief financial officer, may be deposited with the municipality or in escrow with a responsible financial institution authorized to do such business in the state of Alaska. An escrow agreement shall be filed with the municipality by the retailer, or individual providing the personal guarantee, stating that the funds shall be held in trust until released by the municipality and that the funds will be made available immediately in the case the retailer fails to remit taxes, penalties and/or interest due under this chapter.

Letter of credit: A letter of credit may be provided, from a bank or other responsible financial institution authorized to do such business in the state of Alaska. The letter shall be filed with the municipality and certify that the financial institution irrevocably guarantees the funds and that the funds will be made available immediately in the case the retailer fails to remit taxes, penalties and/or interest due under this chapter.

Alaska’s AMC 12.50.010 defines marijuana as “all parts of the plant of the genus Cannabis…” However, industrial hemp is not considered marijuana. Therefore, the Municipality of Anchorage’s position is that industrial hemp is not subject to the retail marijuana sales tax.

Arkansas:In the process of establishing rules.  Current thoughts for Surety Bond requirements are:  In February 2017 meeting the Commissioners discussed adding bond requirements for dispensary applicants. Commissioner Story made a motion to require applicants for cultivating dispensaries to provide proof of assets or a surety bond in the amount of $200,000.00, and provide proof of at least $100,000.00 in liquid assets. Commissioner Roman seconded the motion. The motion passed by a vote of 5-0.

In January 2017 meeting the Commissioners discussed requiring cultivation facility applicants to show proof of assets as part of the application process. Commissioner Story made a motion to add under section 5(c) of the draft rules for cultivation facilities, the following requirements: Applicants must provide proof of assets or a surety bond in the amount of $1,000,000.00, and Applicants must provide proof of at least $500,000.00 in liquid assets. Commissioner Roman seconded the motion. The motion passed by a vote of 5-0.

CA is on schedule to complete its Medical Marijuana Regulations.  Currently, they are only requiring a Surety Bond in the amount of $25,000 to cover the cost of product destruction if determined as failing to meet the state’s requirements.

City of Coalinga, CA:  Accepting applications NOW.  Payment of an  application  fee  ($2,000)  and employee  fee(s)  ($400  per  employee)  are  required  when  submitting  an  official  application  for  a  commercial  marijuana license. Each applicant shall provide a surety bond or letter of credit in the amount of $25,000 in the case of future destruction of product due to non-compliance.

The Business Owner shall at all times carry a comprehensive general liability policy in the minimum amount of One Million Dollars ($1,000,000) combined single limit policy, as shall protect the Business Owner and City from claims for such damages, and which policy shall be issued by an “A” rated insurance carrier.  Such policy or policies shall be written on an occurrence form.

The City Manager, in consultation with City’s Risk Manager, may allow the Business Owner to obtain lesser amount of insurance where multiple Business Owner are operation on the Premises, provided at all times the minimum insurance set forth is applicable to the Marijuana Operations.

The Business Owner shall furnish a notarized certificate of insurance countersigned by an authorized agent of the

insurance carrier on a form approved by City setting forth the general provisions of the insurance coverage.  This counter signed certificate shall name City and its officers, agents, employees and volunteers as additional insured parties under the policy and the certificate shall be accompanied by endorsements evidencing such. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of the carrier to
notify City of any material change, cancellation or termination of the coverage at least thirty (30) days in advance notice of cancellation or change. Primary and Non-Contributing endorsements must be provided.  The policy shall also contain an endorsement for a waiver of subrogation to the benefit of the city.  For the application process, a letter of intent from your insurance company guaranteeing coverage will suffice and proof of insurance shall be provided prior to certificate of occupancy or the license  will be revoked.

Colorado:  The state of Colorado no longer requires a surety bond for Cultivation or Dispensary Licenses.  However, there are local city and county requirements in some locations.  Aka… City of Federal Heights requires a $5,000 surety bond for licensing.  There is also a requirement for a surety bond and specialized General Liability policy for Security Companies transporting marijuana.

Connecticut:  The Surety bond starts at $2,000,000 and is replaced by a $1,500,000 upon completion of the facility buildout.  The $1,500,000 surety bond shall remain in place during the operation of the production facility.


Florida::  Requires a $5,000,000 Surety Bond for a Cultivation/Dispensing License.  The bond face amount is reduced to $2,000,000 upon serving 1000 patients.  This bond has some steep requirements that only an expert in marijuana surety bonds will be able to negotiate with the Surety Carrier on your behalf.  We have negotiated a 1% rate for each of 2 years with full collateral.  We have also offered 50% collateral at higher rates.  If you reach the 1000 patient mark during the two-year term, we will endorse the policy and return unearned premium.  We charge no additional fees to implement these bonds.  The current licensees are:

  • Trulieve (Hackney Nursery) – Northwest Region
  • CHT Medical (Chestnut Hill Tree Farm) – Northeast Region
  • The Green Solution (San Felasco) – Northeast Region
  • Knox Medical (Knox Nursery) – Central Region
  • Surterra Therapeutics (Alpha Foliage/Surterra Holdings) – Southwest Region
  • Modern Health Concepts (Costa Farms) – Southeast Region
  • Grow Healthy Holdings (McCrory’s Sunny Hill)- Central Region

Plants of Ruskin, Inc. and Tornello Landscape Corp., d/b/a 3 Boys Farm are still in a legal battle to be awarded a license.

Illinois:  Requires a $2,000,000 Surety bond for Cultivation.  This bond is reduced over time when the licensee meets certain milestones.  Each reduction is $500,000.    Illinois requires a $50,000 surety bond for a dispensing organization.


Maine: No determination has been made for or against Surety bond requirements in Maine as they have not yet developed the rules and regulations. The state website states: Rep. Louis Luchini (D-132) introduced a bill, titled LD 88, in the state legislature near the start of the 2017 legislative session. LD 88 was designed to delay the licensing of retail marijuana facilities until February 2018, with the intent of giving state agencies additional time to craft rules and regulations. Question 1 stated that agencies would begin licensing retail marijuana facilities within nine months of the measure’s certification, which is around September 2017. LD 88 would also clarify that marijuana would be legal for rec-reational use by individuals 21 years of age and older. The bill would allow for the legalization of marijuana cultivation, possession, transportation, and sharing in a private residence to go into effect on January 30, 2017, as Question 1 pre-scribed. The bill would, however, ban the consumption of edible retail marijuana products until February 1, 2018.  On January 26, 2017, the Maine Senate and Maine House of Representatives unanimously approved LD 88. Gov. Paul LePage (R) said he would neither sign nor veto the bill.

New Jersey: Governor Chris Christie has signed Assembly Bill No. 457, which expands the “New Jersey Compassionate Use Medical Marijuana Act,” to include post-traumatic stress disorder (“PTSD”) as a debilitating medical condition for which medical marijuana may be authorized. No Surety bonds are required at this time.
New York: Chronic Pain to Be Added as a Qualifying Condition for Medical Marijuana as of January 2017. The other qualifying con-ditions are: cancer, HIV infection or AIDS, amyotrophic lateral sclerosis (ALS), Parkinson’s disease, multiple sclerosis, damage to the nervous tissue of the spinal cord with objective neurological indication of intractable spasticity, epilepsy, inflammatory bowel disease, neuropathies, and Huntington’s disease. New York does not require a surety bond for Marijuana licensing at this time.

Nevada: A medical marijuana cultivation facility, an independent testing laboratory or a medical marijuana production facil-ity Required two surety bonds for licensure. The City of Las Vegas requires a $250,000 Surety bond for a Medical Marijuana Estab-lishment. The City of Las Vegas requires a $50,000 surety bond for a retail Marijuana License.
Pennsylvania: License application group must put up $200,000, have $2 million in assets and a plan for a secure, indoor growing site by March 20 2017. Applications due by March 20, 2017.
Montana: Has licensed 551 providers as of January 2017. They have no requirements for surety bonds in marijuana licensing as yet.

OHIO:  Financial responsibility requirements for the cultivator license.  These requirements include (a) general liability and products liability insurance coverage with limits determined by the Department, and (b) a surety bond in the amount of $750,000 for Level I cultivators and $75,000 for Level II cultivators, or (c) an escrow account in the amount of $750,000 for Level I cultivators and $75,000 for Level II cultivators. This rule also establishes benchmarks that, if met, reduce the dollar amount of the bond or escrow account.  Cultivator rules are to be adopted by May 2017.

The department reduced the level of surety bond coverage or escrow account balance from $2,000,000 to $750,000 for Level I cultivators and $200,000 to $750,000 for Level II cultivators and included performance triggers that will reduce the amount by $250,000 and $25,000, respectively, for each performance measure achieved, until an escrow/surety bond requirement is no longer present. The Department added an insurance required for coverage related to General Liability and Products Liability to protect patients and licensees from potential liabilities.

Oregon:  Does not require any surety bonds at this time.

decriminalized recreational marijuana making it legal to carry up to two ounces of cannabis and own sWASHINGTON D.C.ix plants. However, it is still illegal to purchase marijuana in the District

Texas:  Accepting Applications for Dispensary/Cultivator Licenses starting Feb 23, 2017  The Texas Compassionate Use Act (Senate Bill 339) was signed by Gov. Greg Abbott and became effective June 1, 2015. The bill requires DPS to create a secure registry of physicians who treat epilepsy for the purpose of prescribing low-THC cannabis to patients who have been diagnosed with intractable epilepsy. In addition, the bill requires DPS to license at least three dispensing organizations by Sept. 1, 2017. The license will authorize the organizations to cultivate, process and dispense low-THC cannabis to prescribed patients.

The department will accept applications for dispensing organization licenses from February 23, 2017 through March 23, 2017.  The proposed application fee for a dispensing organization license is now $7,356.   The proposed license fee for a dispensing organization is now $488,520 for a two-year license, down from $1.3 million. The proposed fee for the biennial renewal of the dispensing organization license is $318,511. The proposed registration fee is $530 for both the original registration and renewals.



Washington:  Does not require any surety bonds for marijuana licensing at this time.

Washington D.C..:  Does not require any surety bonds for marijuana licensing at this time. The District decriminalized recreational marijuana making it legal to carry up to two ounces of cannabis and own six plants. However, it is still illegal to purchase marijuana in the District


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