Arkansas Medical Marijuana Surety Bond
Arkansas requires medical cannabis licensees to post a cannabis surety bond as part of their licensure. Dispensary licensees post a $100,000 bond. Cultivation facility licensees post a $500,000 bond. Both bonds are required by the Arkansas Medical Marijuana Commission and the Arkansas Department of Finance and Administration (DFA), which together administer Arkansas’s medical cannabis program under Arkansas Constitutional Amendment 98 (the Arkansas Medical Marijuana Amendment of 2016).
We have been writing surety bonds since 1971. If you are facing this requirement, call us at 800-333-7800 or request a free quote online. Cannabis bond regulations are fairly new and constantly changing, so feel free to reach out to us regarding the latest underwriting and pricing policies that apply to your specific situation.
Who Needs an Arkansas Medical Marijuana Bond?
The bond requirement applies to two categories of licensee:
- Dispensary licensees. Medical cannabis dispensaries that hold a license to dispense medical marijuana to qualified patients.
- Cultivation facility licensees. Cultivation facilities that grow medical cannabis for the program.
The bond protects the State of Arkansas and the public by guaranteeing that the licensee will operate in compliance with state law and the rules of the Arkansas Medical Marijuana Commission and the DFA’s Alcoholic Beverage Control Division, which handles cannabis enforcement. If the licensee fails to meet its obligations, the state can claim against the bond, and the licensee is required to repay the surety in full.
How Much Are the Arkansas Cannabis Bonds?
The face amounts are set by the state and are different for dispensaries and cultivation facilities:
- Dispensary bond: $100,000. Dispensary applicants must also demonstrate either proof of assets or a surety bond of $200,000, plus proof of at least $100,000 in liquid assets.
- Cultivation facility bond: $500,000. Cultivation applicants in the initial application phase must also provide proof of assets or a surety bond of $1,000,000, plus proof of at least $500,000 in liquid assets.
The face amount is the coverage, not what you pay. What you pay is the annual premium, which depends on credit, financial strength, and the carrier. Cannabis bond regulations and underwriting are evolving, so call us at 800-333-7800 for the latest pricing that applies to your situation.
Statute and Regulator
The underlying authority is Arkansas Constitutional Amendment 98, the Arkansas Medical Marijuana Amendment of 2016, and the implementing regulations of the Arkansas Medical Marijuana Commission and the Arkansas Department of Finance and Administration.
The bond is filed with the Commission. License and bond terms run for one year, matching the licensure cycle, and must be renewed without lapse to keep the license in good standing.
What Underwriting Looks Like
Both the dispensary and cultivation bonds are large enough that carriers underwrite carefully. As a general rule, bonds over $10,000 typically require a credit check on the company owners, and bonds at $100,000 or larger usually require company financials. For the $500,000 cultivation bond, carriers will typically want to see:
- Personal credit reports for the owners and key decision-makers
- Financial statements for the licensee entity
- Operating history and compliance record with the Commission, where applicable
- Documentation supporting the liquid asset requirement
- For first-year licensees, additional collateral may be required by some carriers
Cannabis bond underwriting standards are evolving, so reach out to us at 800-333-7800 for guidance specific to your situation.
What the Bond Covers
The Arkansas medical cannabis bond is a financial guarantee that the licensee will operate in compliance with state law and the rules of the Commission. If a valid claim is filed (for example, for unpaid penalties, taxes, or compliance failures), the surety pays the claim up to the bond’s face value, and the licensee is then required to reimburse the surety in full plus expenses.
Arkansas Medical Marijuana Bond FAQs
How much is the Arkansas medical marijuana dispensary bond?
The dispensary bond face amount is $100,000. Applicants must also demonstrate either proof of assets or a surety bond of $200,000, plus at least $100,000 in liquid assets.
How much is the Arkansas cultivation facility bond?
The cultivation bond face amount is $500,000. Initial applicants must also provide proof of assets or a surety bond of $1,000,000, plus at least $500,000 in liquid assets.
Who is the obligee on the Arkansas medical cannabis bond?
The Arkansas Medical Marijuana Commission and the Arkansas Department of Finance and Administration.
What statute requires the bond?
Arkansas Constitutional Amendment 98 (the Arkansas Medical Marijuana Amendment of 2016) and the implementing regulations.
How long is the bond term?
One year, matching the licensure cycle. The bond must be renewed without lapse to keep the license active.
How long does it take to get bonded?
Timelines depend on the size of the bond, your credit, and the completeness of your financials. For applicants with strong credit and clean financials, we can move quickly. Call us at 800-333-7800 and we will tell you exactly where you stand.
What happens if my bond lapses?
A lapse in coverage can put your medical cannabis license at risk. Always have a renewal or replacement bond filed before the existing bond term ends.
Get Your Arkansas Medical Marijuana Bond Today
Arkansas’s medical cannabis bonds are among the larger cannabis surety requirements in the country, especially the $500,000 cultivation bond. We have been writing surety bonds since 1971 and we work with the carriers that have appetite for Arkansas medical cannabis bonds. If you are facing this requirement, the sooner we start the conversation, the faster we can get you bonded.
Get a free quote online or call us at 800-333-7800. For broader cannabis bond context across other states, see our national marijuana and cannabis surety bond page.