What the Georgia hemp processor bond is
The Georgia Hemp Farming Act, O.C.G.A. § 2-23-1 et seq., makes it unlawful to process hemp in Georgia without a hemp processor permit issued by the Department of Agriculture. Under § 2-23-6(b)(3) the permit application must include a surety bond as described in § 2-23-6.1. The figures on this page reflect the amendments made by Ga. L. 2024, p. 455 (Senate Bill 494), effective October 1, 2024. They replace the $300,000 minimum that applied from 2021 through September 2024 and the $100,000 figure in the original 2019 Act, both of which are still widely quoted online.
A processor is a person who converts an agricultural commodity into a legally marketable form. The definition at § 2-23-3(22) excludes merely placing raw or dried material into another container, and it excludes traditional farming practices such as drying, shucking and bucking, storing, trimming and curing. If your operation extracts, refines, isolates, formulates or otherwise converts hemp biomass into a saleable article, you are a processor and you need this bond.
How the bond amount is set
The Commissioner sets the amount. It may not exceed two percent of the dollar value of hemp the permittee purchased from Georgia hemp grower licensees in the most recent calendar year. The minimum is $20,000 and the maximum is $1,000,000. An applicant with no purchase history posts the minimum. A processor that bought $3,000,000 of hemp from Georgia growers last year should expect a requirement of up to $60,000. If the Commissioner later decides that an approved bond has become insufficient, he may demand an additional bond by written notice and fix the time to furnish it.
| Penal sum | Not more than 2% of prior calendar year purchases from Georgia grower licensees; $20,000 minimum; $1,000,000 maximum |
|---|---|
| Character of the penalty | Aggregate and non-cumulative |
| Term | Continuous from the stated commencement date until terminated |
| Cancellation | Written notice by registered mail to the Commissioner; liability ends 90 days after receipt |
| Surety eligibility | Surety corporation authorized in Georgia and approved by the Commissioner; certificate of good standing from the Commissioner of Insurance filed with the bond |
| Filing office | Georgia Department of Agriculture, Plant Health Division, 19 Martin Luther King, Jr. Drive S.W., Suite 210, Atlanta, GA 30334 |
| Permit fee and period | $500 to $2,000 as set by the Commissioner; one calendar year |
Two promises in one instrument
The statute conditions the bond to secure the faithful accounting for and payment to hemp grower licensees for hemp purchased by the permittee, and also to secure the permittee's compliance with the Hemp Farming Act. The first promise is a payment guarantee of the agricultural dealer type, economically the same undertaking as a grain dealer or produce dealer bond. The second is a conventional license compliance guarantee. One instrument carries both, which is why we rate this bond as credit and not merely as conduct. Loss is driven by the processor's solvency and working capital cycle far more than by regulatory misconduct.
Growers are direct beneficiaries
The Department's form binds the principal and surety to the Commissioner of Agriculture and to any person who may be injured by a breach of the bonded duties. A Georgia grower who delivers hemp and is not paid has a direct claim and, under § 2-23-6.1(d), may bring an action against the principal and the surety in his or her own name if the Commissioner's ruling does not satisfy the claim. A processor cannot rely on the Department as a gatekeeper.
An aggregate penalty and pro rata sharing
The parties are bound in the aggregate sum stated on the bond. That sum is the ceiling on the surety's total liability for all claims, and it does not stack from year to year even though the bond runs continuously. Where valid grower claims exceed the penalty, § 2-23-6.1(e) lets the Commissioner divide the proceeds pro rata among the growers. Growers selling to a large processor should understand that the bond is a backstop and not full credit insurance.
Ninety days to cancel, no days to lose the permit
The surety may cancel by registered mail, and its liability ends 90 days after the Commissioner receives the notice. Claims that arise before that date survive whether they have been presented or not. The consequence for the processor is severe. Under § 2-23-6.1(a), if the bond is cancelled, or if a demanded additional bond is not furnished in time, the permit is immediately revoked by operation of law without notice or hearing, and the former permittee may not reapply for four years. No Georgia licensing obligation we write carries a harsher consequence for a lapse. Treat the continuity of the bond as the continuity of the business.
The claim process
- A person who claims damage from a breach files a written complaint with the Commissioner within 180 days of the alleged breach.
- If the complaint shows a breach on its face and cannot be resolved amicably within 15 days, the Commissioner publishes a solicitation for additional complaints in not less than five consecutive issues of the publications he selects.
- Additional complaints must be filed within 60 days of the first publication.
- The Commissioner investigates, may hold a hearing, and reports findings. The parties then have 15 days to satisfy his conclusions.
- A civil action on the bond may not begin sooner than 120 days nor later than 547 days from the first publication.
How we underwrite it
At the $20,000 minimum the bond is written on the application and the credit of the key participants, usually the same day. At larger penal sums we review business financial statements, prior year purchase volume and the written grower agreements that § 2-23-7 requires every permittee to keep in place and file with the Department within ten days of signing. Collateralized and partially collateralized structures are available for start ups and for impaired credit. No application is declined at the door.
Other Georgia hemp licenses
Senate Bill 494 also created a manufacturer license ($5,000 a year, waived for a processor permit holder), a wholesale consumable hemp license ($500 to $10,000), a retail consumable hemp establishment license ($250 per location) and a registered laboratory registration ($250 once). None of those carries a statutory bond. A hemp grower license costs $50 per acre up to $5,000. Georgia's separate low THC oil production licenses do carry financial assurance, which we cover on the Georgia cannabis page.
A bond is not insurance for the hemp business
A surety bond is a three party agreement among the principal (your business), the obligee (the agency or county) and the surety. It protects growers and the public, not the principal. If the surety pays a valid claim, it recovers the payment from the principal and the individual indemnitors under the general indemnity agreement signed at issuance. That is why underwriting looks at credit and working capital, and why paying growers on time and testing early are the cheapest risk controls a hemp operator has.
The federal backdrop
The Agriculture Improvement Act of 2018 removed hemp, defined as Cannabis sativa L. with no more than 0.3 percent delta-9 THC on a dry weight basis, from the Controlled Substances Act and let states run their own production plans under USDA approval. Congress revised the federal definition in late 2025, with changes scheduled to take effect in November 2026 that narrow the market for intoxicating hemp derived products. Fiber, grain and compliant cannabinoid operations continue, and so do the state and county bond rules described here. Processors of finished cannabinoid products should review their product lines with counsel.
What to send us
- The completed online application, or the cannabis and hemp license bond application (PDF), with the name, home address and Social Security number of each owner
- The bond amount the agency or county has given you, and its bond form if it uses its own
- For bonds above $25,000: a personal financial statement from each owner of ten percent or more and current business financial statements
Four steps to a filed bond
- Apply. Online in a few minutes. Review and quoting are free.
- Confirm the amount. We check the penal sum and form against the current rule.
- Bind. You approve the quote, pay the premium and sign the indemnity agreement.
- File. We deliver the executed bond to you, and to the obligee where it accepts electronic filing. Originals are sent overnight when a wet signature is required.
Questions? Call toll free (800) 373-2804, reach an underwriter at (919) 859-5294 or write to Cannabis@SuretyOne.com.
Forms
Primary sources
Official texts behind this page. We link to citation based addresses on legislature, code and agency sites because those are the least likely to move.
- Rules of the Georgia Department of Agriculture, Chapter 40-32, Hemp (Georgia Secretary of State)
- Georgia Department of Agriculture
- Agriculture Improvement Act of 2018, H.R. 2, 115th Congress (Congress.gov)
- 7 U.S.C. § 1639o, hemp definitions (Office of the Law Revision Counsel)
Regulator: Georgia Department of Agriculture. Confirm the current amount and form with the regulator before you file.
Georgia hemp bond questions
How much is the Georgia hemp processor bond in 2026?
Not more than two percent of the hemp you bought from Georgia grower licensees in the most recent calendar year, with a minimum of $20,000 and a maximum of $1,000,000. New processors post $20,000.
Is the Georgia hemp processor bond still $300,000?
No. The $300,000 minimum applied from 2021 until September 30, 2024. Senate Bill 494 replaced it with the two percent formula and a $20,000 minimum on October 1, 2024.
What happens if my Georgia hemp bond is cancelled?
The permit is revoked immediately by operation of law, without notice or a hearing, and you cannot reapply for four years. Replace a bond before the 90 day cancellation period runs.
Can a grower sue on the bond directly?
Yes. The bond runs to any person injured by a breach, and the statute lets a hemp grower licensee maintain an action against the principal and surety.
Does a hemp grower need a bond in Georgia?
No. The bond requirement applies to the processor permit.
Written and reviewed by C. Constantin Poindexter, MA, JD, CPCU, AFSB, ASLI, ARe, AINS, AIS, CPLP, CICS. Founder of Surety One, Inc., Cannabis Insurance Coverage Specialist, attorney and surety underwriter for more than thirty years. Author of The Contractor's Guide to Surety Bonds. View his cannabis insurance credentials. Last reviewed .