Marijuana use is now legal in several states across the country. Recreational marijuana is legal in 9 states, while medical marijuana is legal in 31.
According to a report published by Arcview Market Research and BDS Analytics, last year, legal marijuana sales reached $9.7 billion in the country. Furthermore, the legal marijuana market is expected to hit $24.5 billion in sales by 2021.
As more and more states are beginning to allow the growth, sale, and consumption of marijuana, marijuana dispensaries, cultivators, suppliers, and retailers must obtain a surety bond.
Marijuana Surety Bond: A Brief Intro
Marijuana bonds are surety bonds for the marijuana industry. The purpose of the bond is to ensure that marijuana businesses operate according to state laws and regulations.
A surety bond is part of the legal requirements for starting a marijuana business. It also serves as a guarantee that these businesses will file and pay taxes on time.
Different Parties in a Marijuana Surety Bond
The three main parties in a marijuana bond include:
- The principal (the marijuana business owner buying the bond)
- The obligee (the state requiring the bond)
- Surety agency (the bond underwriting company)
If the principal is unable to fulfill the state requirements, the obligee (the state) can file a claim against the bond. If the claim is valid, the surety agency will offer financial compensation to the obligee. The principal will then need to repay the surety agency.
Different Types of Marijuana Bonds
- Medical Marijuana Dispensary Bond: This bond is for marijuana cultivators, dispensaries, and nurseries.
- Medical Marijuana Business: If you own a marijuana shop, you need a medical marijuana business bond. This bond involves licensees of medical marijuana.
- Retail Marijuana Excise Tax Bond: This bond is for marijuana shops and it guarantees the payment of taxes.
- Retail Marijuana Performance Bond: This bond is for cultivators, dispensaries, and retailers. It serves as a guarantee that the principal will perform their responsibilities and tasks ethically.
Analyzing the Cost of A Marijuana Bond
While the cost of the bond will differ from state to state, it’s usually around 1 to 15 percent of the total bond amount. That being said, the cost will also depend on the principal’s financial strength i.e. their credit score, financial circumstances, and more.
How to Obtain a Marijuana Bond
Before applying for a marijuana bond, you need to understand your state’s requirements. With the assistance of a surety agency, you can obtain a marijuana bond.
If you are planning on setting up a medical marijuana establishment in your state, get in touch with us. BondPro, Inc. offers medical marijuana and other surety bonds at the best possible rates in 50 states.