What Montana requires of cannabis and marijuana businesses
Montana singles out one license class for bonding: the testing laboratory. The requirement was first promulgated by the Department of Public Health and Human Services when it ran the medical program, alongside a rule that laboratories carry professional liability insurance with an aggregate limit of at least one million dollars. Regulation of all cannabis licensees moved to the Department of Revenue's Cannabis Control Division when adult use sales began in 2022.
The bond is $25,000. It sits exactly at our application only threshold, so most Montana laboratories are quoted the day we receive a completed application.
| Bond | Penal sum | Who files it | Obligee | Authority |
|---|---|---|---|---|
| Montana Marijuana Testing Laboratory Bond | $25,000 | Licensed testing laboratories | State of Montana | Montana testing laboratory rules (originally DPHHS, now Department of Revenue) |
What the bond guarantees
The bond guarantees that the laboratory will adhere to the security plan the state approved and will not operate in a way that allows or results in theft, loss or diversion of marijuana products. A laboratory holds product from many licensees at once, which is why the state treats custody as the key risk.
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 Montana cannabis and marijuana bonds
Bonds at this size are transactional. For a penal sum of $25,000 or less we underwrite and quote on the strength of a completed cannabis license bond application alone, and most are issued the same business day. Personal credit is one input and the inquiry is a soft pull that does not affect your score. Damaged credit or no credit history does not mean a decline. It routes the file to our non-standard program.
More on cost, credit and collateral.
The parties to a Montana bond
On a Montana bond the principal is your licensed business, named exactly as it appears on the license or application. The obligee is State of Montana. The surety is an insurance company admitted in Montana, placed by Surety One, Inc. as producer and underwriting manager. Who files in Montana: Licensed testing laboratories ($25,000).
Claims, cancellation and renewal in Montana
If State of Montana 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 a Montana bond of this size secures a defined compliance or tax duty, claims are rare and usually follow an abandoned license or an unpaid assessment.
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 marijuana license. We send renewal notices 45 days ahead, and renewing at least 30 days early removes the risk of a gap.
Getting a Montana bond issued, step by step
- Confirm the form and amount. Ask Montana Department of Revenue, Cannabis Control Division 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.
- Receive the quote, usually the same business day. No financial statements are needed at this size.
- 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 Montana bond in good standing
- File and pay every 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 Montana and other state requirements are logged with dates in regulatory updates, and an underwriter is available through the contact page.
What to send us
Send documents to Cannabis@SuretyOne.com or apply online. Confirm the current form and amount with the Montana Department of Revenue, Cannabis Control Division before you file.
A note on vocabulary: cannabis and marijuana are the same plant and, for bonding purposes, the same business. Montana law uses the term "marijuana". Operators look for this bond as a Montana marijuana bond, a Montana marijuana license bond, a Montana cannabis bond and a Montana 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.
Montana marijuana and cannabis bond questions
Do Montana dispensaries or cultivators need a bond?
We have not identified a state surety bond requirement for those license types. The bond applies to testing laboratories.
Does the lab's insurance replace the bond?
No. The professional liability policy protects the laboratory. The bond protects the state. Montana requires both.
Is a Montana marijuana bond the same as a Montana cannabis bond?
Yes. Marijuana bond, cannabis bond, marijuana license bond and cannabis surety bond are different names for the same instrument. Montana law uses the term 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 Montana 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 Montana bonds are rated individually. Quotes are free.
Can I get a Montana 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 .