Integrated license bond amounts by state
| State | Bond amount | Notes |
|---|---|---|
| Florida | $5,000,000, reducible to $2,000,000 | Medical Marijuana Treatment Centers. Reduction at 1,000 qualified patients. |
| Alabama | $2,000,000 | Integrated facility license. Letter of bondability at application. |
| Connecticut | $2,000,000 and $1,500,000 | Producer construction bond and operation bond. The operation bond steps down after one and three clean years. |
| Georgia | $1,500,000 Class 1; $625,000 Class 2 | Low THC oil production licenses. |
| New York | $2,000,000 | Medical registered organizations, in place of site documentation. |
| Vermont | $5,000 | Integrated licensees, cessation of operations bond. |
Select a state for the statute or rule, the obligee, what the bond guarantees and the primary sources. States that are not listed do not require this bond at the state level, although a county or city may. See states with no statewide bond.
Why these bonds are so large
A limited license is a public asset. If a state awards one of a handful of vertical licenses to an applicant that never builds, or that stops supplying patients, the program fails in that region. The bond prices that failure. Connecticut's forms are the most explicit: one bond pays the state if the facility is not built on time, and the other pays if supply to dispensaries is interrupted.
Winning the bond before you win the license
Alabama asks for a surety's letter of commitment with the application, and competitive applicants in every state include one, because scoring committees read it as proof of financial capacity. We issue bondability letters after a full underwriting review, so start early. Expect to provide CPA prepared financial statements, personal financial statements from each owner of ten percent or more, the capital plan and the complete license application.
Collateral and step downs
Few new ventures qualify for a seven figure bond on credit alone, and partial collateral is common. It is still far less capital than a cash deposit or letter of credit for the full amount. Plan for the step downs the rules allow: Florida at 1,000 patients, Connecticut after one and three clean years, Illinois cultivation centers at each milestone. Every reduction lowers both premium and collateral.
What to send us
- The online application with the name, home address and Social Security number of each owner
- The amount and bond form your regulator gave you
- For bonds above $25,000: personal financial statements from owners of ten percent or more and current business financials
Questions
What is the largest marijuana bond in the United States?
Florida's $5,000,000 Medical Marijuana Treatment Center performance bond, which may be reduced to $2,000,000 once the center serves at least 1,000 qualified patients.
What is a letter of bondability?
A written commitment from a surety that it has underwritten the applicant and will issue the bond if the license is awarded. Alabama requires one at application.
Will I need collateral for a $2,000,000 bond?
Often, in part. The amount depends on financial strength, experience and the wording of the bond.
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 .