MFE Insurance, a California cannabis insurance company, recently released a blog discussing the use of surety bonds for marijuana dispensaries. While there is no single surety bond available for the industry on a national basis, states require medical and recreational dispensaries to carry various types of bonds before they can begin operation.
Surety bonds provide a financial guarantee that the bond holder will fulfill contractual obligations to the state for various purposes, such as the reporting and payment of sales taxes. If the bond holder does not follow through on these obligations, the surety agency will step in to secure payment for the government. To get licensed, a dispensary must submit an application with its respective state, and while there are 29 states that have legalized marijuana use in some form, Colorado is the only state currently accepting new applications. Applicants will pay a premium of between one percent and 15 percent of the bond amount in order to obtain one, though applicants with bad credit may have to pay a higher amount.
Each state has its own requirements for those seeking to obtain a marijuana surety bond. For example, applicants must agree to adhere to certain construction standards while building or remodeling their dispensary in certain states. The amount of the bond required, and the premiums that must be paid, also vary from state to state. In some areas, growers, processors, nd researchers must all carry bonds, in addition to dispensaries. Check the regulations in your area to determine the type of bond and amount required, and seek the help of a professional cannabis insurance agency for support throughout the application process.
Speak to MFE Insurance for more information about surety bonds for cannabis insurance and how you can apply for a policy. MFE's brokers are well versed in cannabis insurance for the industry, allowing them to provide customized insurance packages for clients. The firm can also assist with insurance for theater productions, film productions, nightclubs, restaurants and other entertainment events. For more information, contact the agency at 213-266-7990 or online at https://www.mfeinsurance.com/. MFE Insurance is headquartered at 811 West 7th St, Los Angeles, CA 90017.