What Louisiana requires of cannabis and marijuana businesses
Louisiana dispenses therapeutic marijuana through a small number of specially permitted marijuana pharmacies, allocated by region. The Louisiana Board of Pharmacy issues the marijuana pharmacy permit under its controlled dangerous substances authority and its rules at LAC 46:LIII, Chapter 24.
A marijuana pharmacy permit applicant must furnish a surety bond of $100,000. Because the number of permits is capped and each pharmacy serves an entire region, the Board uses the bond to make sure a permit holder remains financially accountable for compliance throughout the permit term.
| Bond | Penal sum | Who files it | Obligee | Authority |
|---|---|---|---|---|
| Louisiana Marijuana Pharmacy Permit Bond | $100,000 | Marijuana pharmacy permit holders | Louisiana Board of Pharmacy | La. R.S. 40:1046; LAC 46:LIII, Chapter 24 |
What the bond guarantees
The bond guarantees the permit holder's compliance with the pharmacy practice act, the therapeutic marijuana statutes and the Board's rules. At $100,000 it sits above our application only threshold, so underwriting includes personal financial statements from each owner and current business financials.
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 Louisiana 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 Louisiana bond
On a Louisiana bond the principal is your licensed business, named exactly as it appears on the license or application. The obligee is Louisiana Board of Pharmacy. The surety is an insurance company admitted in Louisiana, placed by Surety One, Inc. as producer and underwriting manager. Who files in Louisiana: Marijuana pharmacy permit holders ($100,000).
Claims, cancellation and renewal in Louisiana
If Louisiana Board of Pharmacy 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 Louisiana 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 therapeutic marijuana license. We send renewal notices 45 days ahead, and renewing at least 30 days early removes the risk of a gap.
Getting a Louisiana bond issued, step by step
- Confirm the form and amount. Ask Louisiana Board of Pharmacy 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 Louisiana bond in good standing
- File and pay every therapeutic marijuana 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 Louisiana 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 Louisiana Board of Pharmacy before you file.
A note on vocabulary: cannabis and marijuana are the same plant and, for bonding purposes, the same business. Louisiana law uses the term "therapeutic marijuana". Operators look for this bond as a Louisiana marijuana bond, a Louisiana marijuana license bond, a Louisiana cannabis bond and a Louisiana 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.
Louisiana marijuana and cannabis bond questions
Do Louisiana growers need a bond?
Production in Louisiana is limited to contractors working with the state's two licensed university programs, and the contracting terms govern their financial assurance. The $100,000 bond discussed here applies to marijuana pharmacies.
Is the Louisiana bond continuous?
It is written to remain in force for the permit term and is renewed with the permit. The surety must give the Board advance written notice before any cancellation.
Is a Louisiana marijuana bond the same as a Louisiana cannabis bond?
Yes. Marijuana bond, cannabis bond, marijuana license bond and cannabis surety bond are different names for the same instrument. Louisiana law uses the term therapeutic marijuana, operators search under all of these names, and the bond form and amount are the same whichever word you use.
How much does a Louisiana 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 Louisiana bonds are rated individually. Quotes are free.
Can I get a Louisiana therapeutic marijuana 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 .