Cannabis Surety Bonds

Though more states are legalizing the possession and use of marijuana for both medical and recreational purposes, each state has its own laws regulating product cultivation and distribution, as well as the taxation of dispensaries. Working with a knowledgeable surety company like Brunswick Companies to get the marijuana bond you need is key to complying with applicable to rules and regulations in your state.

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What is a Cannabis Surety Bond?

A cannabis surety bond ensures a company will comply with applicable state or local regulations for the marijuana industry. The bond acts as an agreement between three parties:

  • Obligee = the state or municipality administering the licensing
  • Principal = the company seeking licensure to conduct business in the marijuana industry
  • Surety = the company that provides a financially backed assurance to the obligee that the principal will act according to the applicable regulations

Once in effect, the cannabis bond makes the surety financially liable for actions taken by the principal that are not in accordance with the laws and regulations covered by the bond. This allows the obligee to make a claim against the bond to recoup any financial losses should the principal fail in their duties.

How do Cannabis Surety Bonds work?

Cannabis surety bonds benefit the obligee (aka the state or municipality regulating the marijuana industry) in two ways.

First, by requiring all companies working in the marijuana industry to be bonded, the obligee places additional scrutiny on the principal to ensure they’re qualified and a good risk. The surety will assess the principal by examining the credit and financial standing of both the company and the owners.

Second, if the principal violates the terms of the bond resulting in a financial loss, the obligee can make a claim against the bond that the surety must address. Once the surety determines the validity of the claim, they will pay the obligee up to the amount of the bond. The surety will then seek reimbursement for any money paid from the principal.

How much do Cannabis Surety Bonds cost?

The state or municipality requiring the bond determines the required bond amount, but the cost will be a percentage of that amount. While the cost may range anywhere from 1.5% to 15% of the total amount, the final rate is dependent on your credit and financial standing — the better your credit is, the lower your rate will be.

Having bad credit doesn’t mean you can’t get a marijuana bond. Brunswick Companies has a large network of sureties and we’re able to get the best price for you, even if you have bad credit. While the rate will be higher — usually in the range of 5% to 15% — you can still become bonded.

How do you get a Cannabis Surety Bond?

The process begins with requesting a quote. From there, our surety bond specialists will work with you to complete the required application for your state or municipality. Our specialists will check your credit and may request additional financial information for your company and all owners. Once you’re approved and after signing the indemnity agreement, our specialist will send your bond to you and file it with the appropriate state or municipal department.


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