Currently, Washington D.C. along with 28 states allow medical marijuana prescriptions to be written for certain medical conditions. Surety bonds are being used for states to be able to regulate the medical marijuana industry.
Businesses need to acquire this bond before they are legally allowed to open a medical or a retail marijuana dispensary. Each state requires a particular type of marijuana surety bond. The number of bonds each have a different purpose and scope for the licensing or medical and recreational marijuana dispensaries. Cities and counties require their own bond forms in addition to the forms that are required for licensing at state level.
In order to receive a license, a business needs to post a surety bond. Similar to other surety bonds, there are three parties included in this type of surety bond. The principle (the business owner), the surety company, and the obligee (state government). The surety provides the financial guarantee that the principle will legally and professional fulfill the obligations stated in the surety bond.
In Colorado, a marijuana surety bond is a form of a sales tax bond. The bond is meant to guarantee the medical or retail marijuana dispensaries will report and pay their sales tax on time. If taxes are not reported and paid to the state on time they will be breaking state law. In that case, the surety will step in and resolve the problem by compensating the obligee. A bond amount of $5,000 is required by the Colorado Department of Revenue.
Other states including Florida, Nevada, and Connecticut have a more restricted process.
Costs for this bond is referred to as a premium. The premium is not the bond amount; it is a certain percentage of the bond amount. Credit is a factor when calculating the premium along with the bond amount. Also, the state which business will be conducted in is also a factor since each state has different requirements for the bond that needs to be posted. The exact premium amount will be discussed between an agent and the client after an application is submitted and an underwriter is assigned to the bond. Surety1 works with all types of credit and businesses.
Visit our application page and receive a bond either the same business day or the next!