Louisiana Medical Marijuana Pharmacy Bond
What is a Louisiana medical marijuana bond?
A Louisiana marijuana bond, also called a marijuana pharmacy bond, is a $100,000 bond that marijuana pharmacies must post to obtain a permit and operate legally. By obtaining the bond, pharmacies can prove they have the financial ability to build and run a successful business.
Why do marijuana pharmacies need this bond?
The Louisiana Board of Pharmacy regulates medical marijuana distribution in the state. They require pharmacies wanting to dispense marijuana to post this bond. Louisiana’s licensed pharmacies may only dispense marijuana to approved patients and primary caregivers for therapeutic use.
Get Your Louisiana Marijuana Bond:
Quick Takeaways
- A Louisiana medical marijuana bond is a $100,000 bond that marijuana pharmacies must post to obtain a permit and operate legally in the state.
- The bond guarantees that a medical marijuana pharmacy has the capital to build and run a successful business.
- Pharmacies will pay a small percentage of the $100,000 surety bond annually – around 1-5% if they meet certain criteria.
Medical Marijuana Pharmacy Laws in Louisiana
According to the Department of Health Board of Pharmacy’s Final Rule, a marijuana pharmacy in Louisiana is “that area within a facility where marijuana is stored, dispensed, and sold.” No more than ten permits may be active within the state at one time. The state allocates one marijuana pharmacy permit per region.
Permit applicants must supplement their application form with documented evidence of their financial capacity to operate a pharmacy properly. They may submit a letter of credit, proof of an escrow account, or a surety bond of at least $100,000 as evidence.
If your pharmacy achieves certain milestones, the amount may be reduced by $25,000. Here’s an overview (read page 11 of the Final Rule to learn more):
- The board determines your pharmacy is fully operational and has begun dispensing marijuana.
- The board determines you’ve remained operational without substantial interruption or violation of law or regulation for one year and again for a second year.
- You maintain a letter of credit, escrow account, or surety bond for a minimum of $25,000 for the remainder of your operation.
How do Louisiana medical marijuana bonds work?
Marijuana bonds are three-party agreements between a principal, an obligee, and a surety.
- Principal: The marijuana pharmacy that purchases and posts the bond
- Obligee: The authority that requires the bond (the Louisiana Board of Pharmacy)
- Surety: The financial institution that underwrites, issues, and backs the bond financially
The bond ensures that the principal will build the pharmacy on time, follow applicable rules and regulations, and operate ethically and responsibly according to the Louisiana Administrative Code.
If they break the surety agreement by violating its terms, the injured party may file a claim against the bond for compensation. The surety may resolve the claim upfront, but the principal must repay it in full plus attorney’s fees and any other costs involved.
Frequently Asked Questions
Do I need to renew my surety bond?
To continue running your business, you must renew your Louisiana marijuana bond annually with your bonding company. You or your surety may cancel the bond by giving the obligee a 30-day written notice.
If you choose not to renew your permit (and bond) at any point, the board will extinguish your obligations at the end of the permit’s term.
How much does a medical marijuana bond cost in Louisiana?
Sureties must carefully underwrite marijuana bonds due to their high-risk nature. Your surety will investigate your credit score, personal and business financials, business plan, and industry experience to determine your rate. You will pay a small percentage of the $100,000 surety bond – around 1-5% if you have excellent credit and meet other criteria.
How do I get my Louisiana marijuana pharmacy permit?
Follow this general process to apply for your initial permit. See the Licensing Procedures section of the Final Rule for specifics.
- Fill out the application form for a marijuana pharmacy permit.
- Disclose the ownership of the entity that will own the permit and any holding companies that exist (if applicable).
- Include the address where you plan to operate your pharmacy.
- Provide all required documentation, including a detailed description of your products and services, evidence that you’re authorized to conduct business in Louisiana, and materials describing the exterior of your pharmacy and its site compatibility.
- The owner’s managing officer and pharmacist-in-charge must sign and date the application form.
- Submit background checks.
- Apply for a $100,000 marijuana pharmacy bond.
- Pay for any permit and administrative hearing fees that apply.
How to Get a Marijuana Bond in Louisiana
We can help you find the right marijuana bond for your business. ZipBonds offers the fastest and most secure option for getting bonded. Our all-digital platform is intuitive and straightforward, and many of our bonds are issued instantly. Begin your application online or call us at 888-435-4191 to speak with an agent directly.
About ZipBonds.com
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.