Florida Medical Marijuana Surety Bond
If you have been awarded a Florida Medical Marijuana Treatment Center (MMTC) license, or you are working through the application process, state law requires you to post a $5,000,000 performance bond before you can operate. It is one of the largest cannabis surety bonds in the country. The requirement is set by Florida Statute 381.986(8)(b)7 and the bond is filed with the Florida Department of Health (FDOH) through the Office of Medical Marijuana Use (OMMU).
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 a Florida MMTC Surety Bond?
Florida licenses Medical Marijuana Treatment Centers under a vertically integrated structure, meaning a single MMTC license covers cultivation, processing, and dispensing. If your business holds (or is applying for) an MMTC license, you are responsible for posting the bond.
The bond protects the State of Florida and the public by guaranteeing that the licensee will operate in compliance with the regulatory framework, including Fla. Stat. 381.986 and the rules adopted by FDOH. If the licensee fails to meet its obligations, the state can claim against the bond up to its full face value, and the licensee is then required to repay the surety in full.
How Much Is the Florida MMTC Bond?
The face amount of the bond is $5,000,000. The bond runs for a two-year licensure term that matches the MMTC license cycle.
There is one important reduction available, and it is one of the most overlooked provisions of the statute. If your MMTC serves at least 1,000 qualified patients, you may request approval from the Florida Department of Health to reduce the bond amount to $2,000,000. For an established MMTC with a meaningful patient base, this is a significant reduction in carrying cost and worth pursuing.
The bond can also be satisfied in alternative forms, including an irrevocable letter of credit or cash, payable to the Florida Department of Health, but most operators use a surety bond because it avoids tying up the full face amount in collateral.
What the Bond Costs (Premium)
What you actually pay for the bond (your annual premium) depends on several factors: the carrier, your credit profile, your financial strength, and the size of the bond ($5M or $2M). Cannabis bond regulations are fairly new and constantly changing, so call us at 800-333-7800 for the latest underwriting and pricing policies that apply to your situation. We work with the carriers that have appetite for Florida MMTC bonds.
As a general rule, bonds over $10,000 typically require a credit check on the company owners, and for bonds of this size, expect to provide audited or reviewed financials and additional documentation. The premium is paid annually.
Statute and Carrier Requirements
The underlying authority is Fla. Stat. 381.986(8)(b)7, which requires every licensed MMTC to maintain a performance bond of $5 million (reducible to $2 million per the 1,000-patient threshold described above).
The bond must be issued by a surety insurance company authorized to do business in Florida and rated in one of the three highest categories by a nationally recognized rating service (for example, AM Best A or better). The bond must be filed and active before the MMTC license is issued or renewed. Any lapse in the bond can result in license suspension, which is why most operators line up the renewal bond well before the existing bond expires.
What Underwriting Looks Like
A $5 million bond is large by any standard, and underwriting is real. Carriers writing this risk typically want to see:
- Personal credit reports for the owners and key decision-makers
- Audited or reviewed financial statements for the MMTC entity
- Operating history and compliance record with FDOH (where applicable)
- A clear understanding of the MMTC’s cultivation, processing, and dispensing operations
- For first-year MMTCs, additional collateral may be required depending on the carrier
For renewals on established MMTCs in good standing, the underwriting conversation generally moves faster. A track record helps. Cannabis bond regulations and underwriting standards are evolving, so reach out to us at 800-333-7800 for guidance specific to your situation.
What the Bond Covers
The Florida MMTC performance bond is a financial guarantee that the licensee will operate in accordance with state law. Specific obligations the bond can be drawn against include:
- Failure to comply with Fla. Stat. 381.986 or with FDOH rules
- Failure to remit required taxes or assessments
- Failure to perform the licensed obligations under the MMTC license
If a valid claim is filed and the surety pays, the MMTC operator is required to reimburse the surety for the full amount paid plus expenses. This is why carriers underwrite carefully on the front end.
Florida MMTC Bond FAQs
How much is the Florida MMTC bond?
The bond face amount is $5,000,000 for the two-year MMTC license period. MMTCs that serve at least 1,000 qualified patients may request approval from FDOH to reduce the bond to $2,000,000.
Who is the obligee on the Florida MMTC bond?
The Florida Department of Health (Office of Medical Marijuana Use).
What statute requires the bond?
Florida Statute 381.986(8)(b)7.
How long is the bond term?
Two years, matching the MMTC license cycle.
Can the bond amount be reduced?
Yes. MMTCs serving 1,000 or more qualified patients may request approval from FDOH to reduce the bond from $5 million to $2 million.
Which surety carriers can write this bond?
An insurer authorized in Florida and rated in one of the three highest categories by a recognized rating service. We work with the carriers that still have appetite for Florida MMTC bonds.
How long does it take to get bonded?
Underwriting timelines depend on the size of the bond and the completeness of your financials. For applicants with strong credit and clean financial records, we can move quickly. Call us at 800-333-7800 and we will tell you exactly where you stand.
What if my bond lapses?
A lapse in the MMTC bond can result in license suspension. Always have the renewal bond in place before the existing bond term ends.
Get Your Florida MMTC Bond Today
Florida’s $5 million MMTC performance bond is one of the largest cannabis surety requirements in the country, and the underwriting reflects that. We have been writing surety bonds since 1971 and we work with the carriers that still write this business in Florida. 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.