Who is required to have a Medical Marijuana Surety Bond in Arkansas?
The Arkansas Medical Marijuana Commission (MMC) administers and regulates the issuance of licenses to operate medical marijuana dispensaries and cultivation facilities. As part MMC Rules Section V.10.c, the principal will be required to post a surety bond as part of this process.
How do Medical Marijuana Surety Bonds work In Arkansas?
These license and permit surety bonds guarantee that the licensed dispensary or cultivator complies with all applicable Arkansas laws governing medical marijuana. It also provides financial relief for all damages resulting from the revocation of the principal’s license during the effective period of the bond, including:
- All cost and expenses incurred by the MMC attributable to retaining the replacement dispensary or cultivator
- All costs and expenses incurred by the MMC or any agent thereof to cease the operations of the dispensary or cultivation site, including, but not limited to, removal and destruction of any remaining marijuana product and cleaning the facility
- All unpaid penalties assessed by the Alcoholic Beverage Control Division (ABC) against the dispensary or cultivator
- All outstanding taxes, penalties and interest associated with any Arkansas Department of Finance and Administration tax account held by the dispensary or cultivator
If the state files a claim against the bond and it is found to be valid, the surety company will pay out up to the penal sum of the bond to resolve the claim. Any monies paid out by the surety, including attorney’s fees, must be reimbursed by the principal.
What are the terms for an Arkansas Medical Marijuana Surety Bond?
Arkansas Medical Marijuana Surety Bonds are filed with the Arkansas Medical Marijuana Commission and run concurrently with the cannabis license, from July 1st to June 30th. The bond is renewed annually via continuation certificate filed with the MMC and can be cancelled at anytime by the surety company with a 90-day written notice to the principal and MMC. Claims can be filed during the coverage period of the bond and 30 days after the expiration of the coverage period, unless the principal’s license is revoked, in which case the coverage period ends one 1 year after the revocation date of the principal’s license. The aggregate liability of the surety will not exceed the penal sum of the bond in any event.
How much are Arkansas Medical Marijuana Surety Bonds written for?
The penalty amount for the bond will depend on which type of business license you are applying for:
Cultivation Facility
- $500,000 Surety Bond
- Will cultivate, prepare, manufacture, process, package, sell to and deliver usable marijuana to a dispensary
- Bond required until first sales tax report is filed
Dispensaries
- $100,000 Surety Bond
- Will be licensed to possess and sell usable marijuana to registered patients
Please contact the MMC for specific information on the license type you are applying for.
How much does a Arkansas Medical Marijuana Surety Bond cost?
Pricing for Arkansas Medical Marijuana Surety Bonds differ from applicant to applicant. An underwriter will review your application, and your premium will be based on a number of different factors including the following:
- Type of Bond
- Amount of the bond
- Personal credit of the applicant
Individuals with good credit can expect to pay 1%-5% of the bond amount. This means qualified applicants could pay as little as $1000 annually for a $100,000 Arkansas Medical Marijuana Surety Bond. To find out how much your bond is going to cost, please complete our online application for your free, no obligation price quote.
Can I get a Arkansas Medical Marijuana Surety Bond with bad credit?
Pacific Surety offers a wide range of approvals, regardless of credit, for Arkansas Medical Marijuana Surety Bonds. With our strong surety relationships, we have the ability to approve 99% of applicants, regardless of their credit. Our knowledgeable underwriting staff will work with you to ensure you receive the lowest possible pricing for your bond. Applicants with substandard credit can expect to pay 5%-15% of the bond amount in premium. To see what rate you will qualify for, please complete our online application for your free, no obligation price quote.
How do I get a quote for a Arkansas Medical Marijuana Surety Bond?
The first step is to complete our quick online application for your free, no obligation bond quote. Submission takes only five minutes, and our underwriting staff will be in contact with you within a couple of hours with pricing. If you prefer to speak with our knowledgeable staff, please call 1-866-722-7873 and one of our Underwriters will assist you in applying for your bond.
After you receive approval, you must sign an indemnity agreement with the surety and provide payment for your bond premium. In most cases, we can issue bonds the same day we receive your signed documents and payment.