California Marijuana Surety Bonds
California Marijuana/Cannabis Surety Bond Information
Marijuana related businesses operating in California are subject to surety bond requirements including Marijuana License Bonds for both medical and adult use/ recreational businesses. A Marijuana License Bond is a type of surety bond required of California cannabis business licensees prior to being issued a license to conduct business in the state. The surety bond must be issued in a coverage amount of at least $5,000 and is required by the Bureau of Cannabis Control pursuant to California Code of Regulations for retailers, cultivators, manufacturers, distributors, testing laboratories, and micro-business licensees.
A Medical Marijuana Bond is a type of surety bond mandated for medical marijuana dispensaries pursuant to California’s Medical Cannabis Regulation and Safety Act (MCRSA). The MCRSA defines a dispensary as “a facility where medical cannabis, medical cannabis products, or devices for the use of medical cannabis or medical cannabis products are offered, either individually or in any combination, for retail sale, including an establishment that delivers, pursuant to express authorization by local ordinance, medical cannabis and medical cannabis products as part of a retail sale.” The MCRSA licenses both Type 10 and Type 10A dispensaries.
In addition to the state surety bond requirements outlined above, certain cities and counties including the cities of Los Angeles, Coalinga, Palm Springs, Lake Elsinore and Shasta Lake, and the counties of Yolo, San Bernadino and Medocino have passed legislation establishing local marijuana bond requirements.
How Much Does a Marijuana License Bond Cost in California?
What does a Marijuana License Bond Protect Against?
The Marijuana License Bond is required by the Bureau of Cannabis Control pursuant to California Code of Regulations to guarantee payments related to the cost incurred for the destruction of cannabis goods and materials in the event of a violation of the Act or other pertinent regulations. The Medical Marijuana Bond is a type of surety bond mandated for medical marijuana dispensaries pursuant to California’s Medical Cannabis Regulation and Safety Act (MCRSA). Both Medical Marijuana Bonds and Marijuana License Bonds ensure compliance with licensure and permit requirements and timely payment of applicable taxes as required by state law.
Getting Your California Business License or Registration
You should expect to provide information to some or all of The Bureau of Cannabis Control, Manufactured Cannabis Safety Branch, or CalCannabis. The licensing process for getting a recreational dispensary license and the process of obtaining a medical marijuana license differ, but regardless of what type of license(s) you apply for, you'll likely need to provide:
- Business information including owners names, DBAs, organizational structure and formation documents, financial information (bank accounts, loans, investments, gifts), and detailed operating procedures,
- Individual owner information including name, title, date, and place of birth; Social Security number or individual taxpayer identification number; mailing address; phone number; email address; current employer, ownership percentage, fingerprints, and criminal history.
- Premises information (including physical address, premises diagram, verification that the premises is not located within a 600-foot radius of a school, and evidence of the legal right to occupy the premises).
- Surety Bond in the amount of $5,000 for the benefit to the state of California (applies to all licensees) as described above.
- Commercial general liability insurance with aggregate of at least $2 million and no less than $1 million for each loss (applies to distributors and micro businesses that engage in distribution).