What Ohio requires of cannabis and marijuana businesses
Ohio has the most complete bond schedule in the country. When voters approved adult use in 2023, regulation of medical and non-medical cannabis was consolidated in the Division of Cannabis Control within the Department of Commerce, and the Division's financial responsibility rule now sits at Ohio Adm. Code 1301:18-3-08.
Every licensee must maintain commercial general liability insurance covering products liability and, in addition, either an escrow account with a chartered Ohio financial institution or a surety bond executed by a corporate surety licensed in Ohio and authorized under Revised Code chapter 3929. The amounts are fixed by license type.
| Bond | Penal sum | Who files it | Obligee | Authority |
|---|---|---|---|---|
| Ohio Level I Cultivator Bond | $750,000 | Level I cultivators | Ohio Division of Cannabis Control | Ohio Adm. Code 1301:18-3-08 |
| Ohio Level II Cultivator Bond | $75,000 | Level II cultivators | Ohio Division of Cannabis Control | Ohio Adm. Code 1301:18-3-08 |
| Ohio Processor Bond | $250,000 | Processors | Ohio Division of Cannabis Control | Ohio Adm. Code 1301:18-3-08 |
| Ohio Testing Laboratory Bond | $75,000 | Testing laboratories | Ohio Division of Cannabis Control | Ohio Adm. Code 1301:18-3-08 |
| Ohio Marijuana Dispensary Bond | $50,000 | Dispensaries | Ohio Division of Cannabis Control | Ohio Adm. Code 1301:18-3-08 |
| Ohio Hemp Processor Bond | $10,000 or $20,000 | Licensed processors buying raw hemp | Ohio Department of Agriculture | Ohio Adm. Code 901:14-2-07 |
What the bond guarantees
The bond must name the licensee as principal exactly as its business name appears on its certificate of operation, together with the license number the Division issued. Only one bond or escrow is required per license, so a dual use licensee does not post separate instruments for medical and non-medical activity. The Division's guidance also recognizes that some cultivators, processors and laboratories were granted reductions under the earlier medical program rules.
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 Ohio 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 Ohio bond
On a Ohio bond the principal is your licensed business, named exactly as it appears on the license or application. The obligee is Ohio Division of Cannabis Control, and on the other bonds listed above the agency, county or city shown in the table. The surety is an insurance company admitted in Ohio, placed by Surety One, Inc. as producer and underwriting manager. Who files in Ohio: Level I cultivators ($750,000); Level II cultivators ($75,000); Processors ($250,000); Testing laboratories ($75,000); Dispensaries ($50,000); Licensed processors buying raw hemp ($10,000 or $20,000).
Claims, cancellation and renewal in Ohio
If Ohio Division of Cannabis Control 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 Ohio 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 Ohio bond issued, step by step
- Confirm the form and amount. Ask Ohio Department of Commerce, Division of Cannabis Control 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 Ohio 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 Ohio 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 Ohio Department of Commerce, Division of Cannabis Control before you file.
A note on vocabulary: cannabis and marijuana are the same plant and, for bonding purposes, the same business. Ohio law uses the term "cannabis". Operators look for this bond as a Ohio marijuana bond, a Ohio marijuana license bond, a Ohio cannabis bond and a Ohio 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.
- Ohio Adm. Code 1301:18-3-08, financial responsibility (Ohio Laws and Administrative Rules)
- Ohio Revised Code Chapter 3780, adult use cannabis
Ohio marijuana and cannabis bond questions
Bond or escrow in Ohio?
Escrow locks up the full amount in cash, which for a Level I cultivator is $750,000. A bond is priced as a fraction of that and keeps the capital in the business. Almost every operator that qualifies chooses the bond.
I hold a dual use license. Do I need two bonds?
No. The Division has said that one bond or escrow per license is enough, even where the license covers both medical and non-medical sales.
What has to match on the bond?
The business name as printed on the certificate of operation and the license number. A mismatch is the most common reason the Division rejects a filing, and we check both before we issue.
Is a Ohio marijuana bond the same as a Ohio cannabis bond?
Yes. Marijuana bond, cannabis bond, marijuana license bond and cannabis surety bond are different names for the same instrument. Ohio 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 Ohio 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 Ohio bonds are rated individually. Quotes are free.
Can I get a Ohio 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 .