Do You Need an Ohio Medical Marijuana Bond?
What is an Ohio marijuana bond?
In Ohio, many medical marijuana-related businesses must post a surety bond to obtain a license to operate. The license is called a Certificate of Operations. Ohio requires marijuana bonds for processors, testing laboratories, cultivators, and dispensaries.
- Ohio medical marijuana cultivators: A cultivator can grow, harvest, package, and transport medical marijuana. They may also sell or deliver it to licensed processors. Level I Cultivators may operate up to 25,000 square feet of space, and Level II Cultivators may operate 3,000 square feet.
- Ohio medical marijuana testing laboratories: A testing laboratory is an independent lab authorized to use controlled substances for medical and scientific purposes or for research, instruction, or analysis. These labs may acquire medical marijuana from licensed processors, cultivators, or dispensaries.
- Ohio medical marijuana processors: A processor may obtain medical marijuana from authorized cultivators, manufacture medical marijuana products, and sell or deliver them to licensed dispensaries.
- Ohio medical marijuana dispensaries: A medical marijuana dispensary in Ohio is a business authorized to obtain medical marijuana from processors and sell it to qualified caregivers and patients.
Get Your Ohio Marijuana Bond:
- In Ohio, medical marijuana-related businesses must post a surety bond to obtain a license to operate.
- A medical marijuana bond is a three-party agreement between a marijuana business, a governing authority, and a surety.
- The state requires marijuana bonds for processors, testing laboratories, cultivators, and dispensaries.
- The cost of your Ohio surety bond may depend on various factors, including the bond amount required, your credit score, personal and business financials, and industry experience.
Ohio Medical Marijuana Laws Concerning Surety Bonds
When the Ohio General Assembly passed House Bill 523 in 2016, it legalized medical marijuana use and established a framework for the Ohio Medical Marijuana Control Program. This program allows patients with specific medical conditions to buy and use medical marijuana.
Here are the bonds each type of marijuana business must post in the state of Ohio to legally operate.
1. Ohio Medical Marijuana Cultivator License Bonds
Cultivators must post a bond to obtain a Cultivator Certificate of Operations to conduct business in the state. There are two surety bonds for cultivators – one for Level I Cultivators (a $750,000 bond) and another for Levell II Cultivators (a $75,000 bond).
2. Ohio Medical Marijuana Testing Laboratory License Bond
Testing labs must post a $75,000 surety bond to obtain a Testing Laboratory Certificate of Operations and conduct business in Ohio.
3. Ohio Medical Marijuana Processor License Bond
Processors must post a $250,00 bond to obtain a license (Processor Certificate of Operations), so they may conduct business in Ohio.
4. Ohio Medical Marijuana Dispensary License Bond
Dispensaries must post a $50,000 bond to obtain a Dispensary Certificate of Operations and run a business legally in Ohio.
How does a medical marijuana bond work?
A medical marijuana bond is a three-party agreement involving a principal (the marijuana business), an obligee (the authority governing the industry), and a surety (the company that issues the bond).
- Principal: The medical marijuana-related business must purchase and post an Ohio surety bond before operating in the state. The company may be a cultivator, dispensary, processor, or testing laboratory.
- Obligee: The Department of Commerce requires marijuana businesses in Ohio to become bonded as part of the licensing process.
- Surety: A company issues the bond to the principal and provides a financial guarantee based on the rules and regulations the obligee has set.
If a marijuana business breaks a rule or regulation concerning the industry and harms another party, it may face claims against its bond. If the claims are valid, it must settle the claim by compensating the claimant. Ohio medical marijuana bonds must remain active throughout the time a business continues operating and are renewed annually. The surety may choose to cancel the bond but must give the obligee 30 days’ written notice.
Frequently Asked Questions
Marijuana bonds are high risk, so sureties must underwrite them carefully. The cost of your Ohio surety bond may depend on various factors, including the bond you require, your credit score, personal and business financials, and industry experience.
You will pay a small percentage of the total bond amount required. If you want to run a dispensary, for example, and your approved rate is 5% of the $50,000 bond, your premium would be $2,500.
Some marijuana bonds may be written for rates as low as 1-5% if the applicant meets specific criteria and has excellent credit. However, don’t hesitate to apply for the bond you need if you have poor credit. ZipBonds works with a large pool of sureties, increasing your opportunity to get bonded at an affordable rate.
Here’s an overview of what you must compile to apply for a medical marijuana surety bond in Ohio – if you qualify for a business license.
- Bond application
- Financial documents and other required information (such as land use and facility permits)
- Correct certification (or application for certification)
- Ohio marijuana license bond form
- Applicable fees
Contact ZipBonds if you have any questions about the application process. We can walk you through the requirements and ensure you’re on the right track.
Get an Ohio Marijuana Bond
ZipBonds is certified to provide marijuana performance bonds to qualified businesses. You can start the application process today by selecting your state 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. We’re more than happy to help!
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.