Grower and cultivation bond amounts by state
| State | Bond amount | Notes |
|---|---|---|
| Oklahoma | $50,000 minimum per license | Commercial grower bond covering reclamation of the permit area. Exempt if the land has been owned five years. |
| Ohio | $750,000 Level I; $75,000 Level II | Bond or escrow under OAC 1301:18-3-08. |
| Utah | $100,000 on the current form | Cultivation facility performance bond. The program opened at $250,000. |
| Illinois | $2,000,000, reducible | Cultivation centers. Steps down $500,000 per milestone. |
| Arkansas | $500,000 | Cultivation facility performance bond. |
| California | $5,000 per license | Plus county cultivation tax bonds in Humboldt and Trinity and a $10,000 bond in Yolo County. |
| Vermont | $2,500 or $5,000 | By cultivation tier. |
| Nevada | $250,000 | Las Vegas cultivation facilities, unless the City approves less. |
| Massachusetts | Equal to the license fee | Scales with canopy tier. |
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.
Three jobs a grower bond can do
Reclamation. Oklahoma wrote its bond after abandoned grows left farmland full of plastic, chemicals and rotting plant material. The bond covers the area of land within the permit and pays for disposal of unused marijuana, hazardous materials and other waste and for restoring the site.
Tax. Cultivation taxes are assessed by canopy or by weight, often before the crop is sold. Humboldt and Trinity counties bond that tax, and a grower that falls behind will hear from the surety as well as the county.
Performance and supply. Where a state issues only a few cultivation licenses, as in Illinois, Utah and Arkansas, the bond guarantees that the licensee will build and operate so patients are not left without product.
How grower bonds are underwritten
Land, water and power make cultivation capital intensive, and a crop failure can erase a year of revenue. For bonds above $25,000 underwriters look at the balance sheet, whether the site is owned or leased, the term of the lease, the grower's compliance record and, for outdoor grows, the reclamation exposure of the parcel. Owning the land helps: in Oklahoma five years of ownership removes the bond altogether. Thin files go to our non-standard program, sometimes with partial collateral.
Hemp growers
Hemp cultivation is bonded by counties in California, by acreage. See California county hemp bonds. Georgia, Ohio and Colorado bond the hemp buyer, not the grower.
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
How much is a marijuana grower bond?
From $2,500 for a small Vermont cultivator to $2,000,000 for an Illinois cultivation center. Oklahoma requires at least $50,000 for each commercial grower license, and Ohio requires $750,000 from Level I cultivators.
What does the Oklahoma grower bond cover?
The cost of cleaning up and reclaiming the permitted land if a grow is abandoned or loses its license, along with compliance with OMMA rules and money due the state.
Is a cultivation bond different from a grower bond?
No. Cultivator, grower and producer are interchangeable license names.
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 .