What Nevada requires of cannabis and marijuana businesses
The Nevada Cannabis Compliance Board licenses cannabis establishments statewide and does not condition a state license on a surety bond. State law does require every establishment to comply with local business licensing, and the two largest cities in Clark County have used that authority.
Las Vegas Municipal Code 6.95.090(G) provides that before a license is issued or renewed, a cultivation facility, an independent testing laboratory or a production facility must provide a surety bond of $250,000, unless the City approves a lower amount. The licensee pays for the bond and must keep it in force for the full license term. North Las Vegas adopted a comparable requirement.
| Bond | Penal sum | Who files it | Obligee | Authority |
|---|---|---|---|---|
| Las Vegas Marijuana Establishment Bond | $250,000 unless the City approves less | Cultivation facilities, production facilities and independent testing laboratories | City of Las Vegas | LVMC 6.95.090(G) |
| North Las Vegas Marijuana Establishment Bond | Set by the City | Licensed establishments in North Las Vegas | City of North Las Vegas | North Las Vegas Municipal Code |
What the bond guarantees
The Las Vegas bond is an indemnity instrument. It guarantees the licensee's obligation, for itself and its agents, employees and subcontractors, to indemnify, defend and hold harmless the City and its officers from claims, judgments, attorney fees and costs arising out of the use of the license or any act or omission of the licensee. That open ended wording is heavier than a compliance bond, so underwriting includes financial statements and a review of the insurance program the City also requires.
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 Nevada 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 Nevada bond
On a Nevada bond the principal is your licensed business, named exactly as it appears on the license or application. The obligee is City of Las Vegas, and on the other bonds listed above the agency, county or city shown in the table. The surety is an insurance company admitted in Nevada, placed by Surety One, Inc. as producer and underwriting manager. Who files in Nevada: Cultivation facilities, production facilities and independent testing laboratories ($250,000 unless the City approves less); Licensed establishments in North Las Vegas (Set by the City).
Claims, cancellation and renewal in Nevada
If City of Las Vegas 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 Nevada 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 cannabis license. We send renewal notices 45 days ahead, and renewing at least 30 days early removes the risk of a gap.
Getting a Nevada bond issued, step by step
- Confirm the form and amount. Ask City of Las Vegas Business Licensing 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 Nevada bond in good standing
- File and pay every cannabis 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 Nevada 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 City of Las Vegas Business Licensing before you file.
A note on vocabulary: cannabis and marijuana are the same plant and, for bonding purposes, the same business. Nevada law uses the term "cannabis". Operators look for this bond as a Nevada marijuana bond, a Nevada marijuana license bond, a Nevada cannabis bond and a Nevada 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.
Nevada marijuana and cannabis bond questions
Do Las Vegas dispensaries need the $250,000 bond?
The bond language in 6.95.090(G) names cultivation facilities, independent testing laboratories and production facilities. Dispensaries have separate insurance requirements under the same chapter.
Can the City reduce the amount?
The code allows the City to approve a lower threshold. A licensee asks for it through Business Licensing, and if granted we issue the bond at the approved figure.
Is a Nevada marijuana bond the same as a Nevada cannabis bond?
Yes. Marijuana bond, cannabis bond, marijuana license bond and cannabis surety bond are different names for the same instrument. Nevada law uses the term cannabis, operators search under all of these names, and the bond form and amount are the same whichever word you use.
How much does a Nevada 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 Nevada bonds are rated individually. Quotes are free.
Can I get a Nevada cannabis 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 .