What is an Arkansas marijuana bond?
Medical marijuana dispensaries and cultivation facilities must post a surety bond before obtaining a business license in Arkansas. The Arkansas Medical Marijuana Commission (MMC) requires these bonds and must receive them within seven days of the prospective business receiving notice of its approval for licensure. There are two types of medical marijuana bonds in Arkansas:
- Medical marijuana cultivation facility performance bond
- Medical marijuana dispensary performance bond
In Arkansas, a cultivation facility is an entity licensed to legally cultivate, prepare, manufacture, process, package, sell, and deliver marijuana. A dispensary is a retail facility licensed to sell marijuana products to qualified individuals.
Get Your Arkansas Marijuana Bond:
- Medical marijuana dispensaries and cultivation facilities must post a surety bond before obtaining a business license in Arkansas.
- A cultivation facility is an entity licensed to cultivate, prepare, manufacture, process, package, sell, and deliver marijuana. A dispensary is a retail facility licensed to sell marijuana products to qualified individuals.
- Applicants may post a “pre-approval” surety bond when applying for a business license.
- Cultivation facilities must maintain a surety bond until it files their first required sales tax report. Dispensaries must maintain a bond until filing their first license renewal application.
Surety Bond Requirements in Arkansas
Applicants may post a “pre-approval” surety bond when applying for a business license. This bond can help you prove that you’re able to meet the qualification requirements by showing proof of assets. Prospective cultivation facilities may post a $1 million pre-approval bond, and dispensaries may post a $200,000 pre-approval bond.
Once a business is approved and awarded a license, it must furnish the appropriate performance bond.
1. Medical Marijuana Cultivation Facility Performance Bond
Arkansas requires medical marijuana cultivation facilities to post a $500,000 performance bond once approved by the MMC to conduct business in the state.
The cultivation facility must comply with state laws, regulations, and industry requirements while the license is active.
2. Medical Marijuana Dispensary Performance Bond
Once a dispensary is approved for licensure, it must post a $100,000 performance bond.
Both bonds guarantee a business’s faithful performance and proper payment to relevant parties.
Renewing an Arkansas Medical Marijuana Bond
Cultivation facilities must maintain a surety bond until it files their first required sales tax report. Dispensaries must maintain a bond until filing their first license renewal application.
After the initial one-year period is up (when your business license expires), you may choose to extend your bond for an additional one-year term if you desire.
Other Frequently Asked Questions
These performance bonds ensure that businesses follow applicable rules and regulations set by governing authorities. Suppose your business fails to fulfill an obligation or violates a law or requirement. In that case, the MMC may file a claim on the bond for compensation for covered damages – up to the maximum bond penalty (either $500,000 or $100,000).
To avoid claims on your bond, you must comply with the requirements of each of the following:
The cost of your surety bond will depend on the type of bond you need (for a dispensary or cultivation facility), your credit score, business history, and other factors. You will pay a small percentage (as low as 1%) of the total bond amount as your premium.
Here is the general process of obtaining your cultivation facility or dispensary license in Arkansas.
- Complete the appropriate license application.
- Obtain a pre-approval surety bond (optional).
- Undergo a background check.
- Pay an application and license fee.
- Get your license.
- If approved, submit your performance bond.
- Renew your license annually.
Get an Arkansas Medical Marijuana Bond
ZipBonds is certified to provide Arkansas marijuana performance bonds. Start the application process by clicking the button below. We offer the fastest and most secure option for getting bonded. Our all-digital platform is intuitive and straightforward. If you have any questions along the way, call 888-435-4191 to speak with an agent directly.
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.