What Georgia requires of cannabis and marijuana businesses
Georgia's Hope Act (House Bill 324, 2019) created a regulated system for producing and dispensing low THC oil to registered patients. The Georgia Access to Medical Cannabis Commission issues two classes of production license. Class 1 licensees may cultivate in up to 100,000 square feet of indoor space and manufacture oil. Class 2 licensees are limited to 50,000 square feet.
The statute attaches financial assurance to each class. A Class 1 production licensee must furnish a bond or letter of credit of $1,500,000 (O.C.G.A. § 16-12-211) and a Class 2 licensee must furnish $625,000 (O.C.G.A. § 16-12-212). Dispensing licenses are issued separately, and the Commission sets their requirements by rule.
| Bond | Penal sum | Who files it | Obligee | Authority |
|---|---|---|---|---|
| Georgia Class 1 Production License Bond | $1,500,000 | Class 1 production licensees | Georgia Access to Medical Cannabis Commission | O.C.G.A. § 16-12-211 |
| Georgia Class 2 Production License Bond | $625,000 | Class 2 production licensees | Georgia Access to Medical Cannabis Commission | O.C.G.A. § 16-12-212 |
| Georgia Hemp Processor Bond | 2% of prior year purchases, $20,000 minimum, $1,000,000 maximum | Hemp processor permit applicants | Georgia Commissioner of Agriculture | O.C.G.A. § 2-23-6.1 |
What the bond guarantees
The production license bonds secure the licensee's performance under the Hope Act and the Commission's rules, including its commitment to begin and sustain production. These are six and seven figure obligations and are underwritten on full financial statements from the business and each owner.
Like every surety bond, this is a three party agreement and it is not insurance for the operator. If the surety pays a valid claim to the obligee, the principal must reimburse the surety under the general indemnity agreement signed when the bond is issued. Read how the different cannabis bond obligations work.
How we underwrite Georgia cannabis and marijuana bonds
This obligation is larger than, or worded more heavily than, a simple compliance bond, so it is underwritten on financial disclosure: the application, a current personal financial statement from each owner holding ten percent or more, current business financial statements (CPA prepared for the largest bonds) and a copy of your complete state or local license application. A cannabis bond is in substance an unsecured credit instrument. The surety extends its credit to you in front of the regulator, so financial strength, operating experience and the exact wording of the bond form drive both the decision and the rate. Where the numbers are thin, partial collateral can close the gap. No applicant is automatically declined.
More on cost, credit and collateral.
The parties to a Georgia bond
On a Georgia bond the principal is your licensed business, named exactly as it appears on the license or application. The obligee is Georgia Access to Medical Cannabis Commission, and on the other bonds listed above the agency, county or city shown in the table. The surety is an insurance company admitted in Georgia, placed by Surety One, Inc. as producer and underwriting manager. Who files in Georgia: Class 1 production licensees ($1,500,000); Class 2 production licensees ($625,000); Hemp processor permit applicants (2% of prior year purchases, $20,000 minimum, $1,000,000 maximum).
Claims, cancellation and renewal in Georgia
If Georgia Access to Medical Cannabis Commission believes the bonded obligation has been breached, it makes a written claim on the surety. The surety opens a file, asks for documentation and notifies you, and you have the opportunity to respond and to cure. A valid, unresolved claim is paid up to the penal sum, and the surety then recovers that payment and its expenses from the business and the individual indemnitors. Because the Georgia obligation is large or carries performance, decommissioning or supply language, a claim can reach the full penal sum, which is why the indemnity agreement deserves the same attention as a personal guarantee on a loan.
Most forms let the surety cancel on written notice to the obligee, commonly 30 to 90 days. If a replacement is not on file before the effective date, the regulator can suspend the low THC oil license. We send renewal notices 45 days ahead, and renewing at least 30 days early removes the risk of a gap.
Getting a Georgia bond issued, step by step
- Confirm the form and amount. Ask Georgia Access to Medical Cannabis Commission for the current bond form and penal sum, or send us the license type and we will confirm them.
- Apply. Complete the online application. It collects the business details and the name, home address and Social Security number of each owner for a soft inquiry credit report.
- Send financial statements. Personal financial statements from owners of ten percent or more, current business financials and your license application let us quote in about three to five business days.
- Bind and file. Pay the premium and sign the indemnity agreement. We deliver the executed bond to you and, where it accepts electronic filing, to the obligee. Wet signature originals go out overnight.
Keeping a Georgia bond in good standing
- File and pay every low THC oil tax and fee on time. Delinquent taxes are the most common trigger for claims.
- Keep seed to sale records reconciled to physical inventory, and document every destruction event with photographs, witnesses and waste manifests.
- Tell us before you change the business name, ownership, location or license type, so the bond can be amended by rider before the regulator notices a mismatch.
- Protect the personal credit of every indemnitor and keep quarterly financial statements. Both are reviewed at renewal.
Terms such as penal sum, obligee and indemnitor are defined in the glossary. Changes to Georgia and other state requirements are logged with dates in regulatory updates, and an underwriter is available through the contact page.
What to send us
- Cannabis license bond application
- Personal financial statement from each owner of ten percent or more
- Current business financial statements
- A copy of your complete license application
Send documents to Cannabis@SuretyOne.com or apply online. Confirm the current form and amount with the Georgia Access to Medical Cannabis Commission before you file.
A note on vocabulary: cannabis and marijuana are the same plant and, for bonding purposes, the same business. Georgia law uses the term "low THC oil". Operators look for this bond as a Georgia marijuana bond, a Georgia marijuana license bond, a Georgia cannabis bond and a Georgia cannabis surety bond. They are one instrument, and this site uses the words interchangeably. See marijuana surety bonds.
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.
- Georgia General Assembly, legislation search (House Bill 324 of 2019, Georgia's Hope Act)
- Georgia Access to Medical Cannabis Commission
Georgia marijuana and cannabis bond questions
Does Georgia accept a letter of credit instead of a bond?
The statute allows either. A bond usually costs less in tied up capital because the bank will reserve the full amount of a letter of credit against your credit line.
Is the Georgia hemp processor bond part of the medical cannabis program?
No. It is a separate requirement under the Georgia Hemp Farming Act and runs to the Department of Agriculture. It protects growers who deliver hemp to a processor.
Is a Georgia marijuana bond the same as a Georgia cannabis bond?
Yes. Marijuana bond, cannabis bond, marijuana license bond and cannabis surety bond are different names for the same instrument. Georgia law uses the term low THC oil, operators search under all of these names, and the bond form and amount are the same whichever word you use.
How much does a Georgia cannabis or marijuana surety bond cost?
You pay a premium, not the penal sum. The premium is a small fraction of the bond amount and depends on the size and wording of the obligation, your credit and your financial strength. Small compliance bonds carry low fixed annual premiums. Larger Georgia bonds are rated individually. Quotes are free.
Can I get a Georgia low THC oil bond with bad credit?
Yes in most cases. Surety One does not automatically decline any applicant. Files with damaged or limited credit go to our non-standard program, which carries a higher rate and sometimes partial collateral.
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 .