What is a Maine Marijuana Surety Bond?
Maine is one of the eight states that have legalized both medical and recreational marijuana. The State requires applicants for retail marijuana establishments, including stores, cultivation facilities, manufacturing facilities, testing facilities, and social clubs to post a surety bond issued by a Surety as part of the licensure requirements.
A Maine Marijuana Surety Bond serves as a guarantee that all fee payments related to the license being applied for including sales tax are paid. It also ensures the legal performance of cultivating, manufacturing, testing, and dispensing properly in adherence to state laws and regulations.
The bond must be of a capacity and rating acceptable to the commissioner in the secured amount applicable to the type of license being applied for.
What are the conditions of the Maine Marijuana Surety Bond?
According to the Maine Legislature, SP0520 LD 1491:
“Registered dispensary means a dispensary that is a non-profit corporation organized under Title 13-B and registered with the Department of Health and Human Services under the Maine Medical Use of Marijuana Act and holds one or more dispensary registrations.
“Retail marijuana means marijuana or marijuana concentrate that is cultivated, manufactured, distributed or sold by a registered dispensary or a licensed retail marijuana establishment or retail marijuana social club.”
The Obligee is the state licensing authority, which is the Department of Administrative and Financial Services, Bureau of Alcoholic Beverages and Lottery Operations.
Here are the conditions:
- The applicant (Principal) must be at least 21 years of age and a resident of this State during the two years before applying for a license
- An applicant for a retail marijuana establishment or a retail marijuana social club license may not also be the principal owner of an applicant for a retail marijuana testing facility license or hold a license for a retail marijuana testing facility
- The bond must be issued by a surety bond company that is licensed to conduct such business in the State
- The bond must be made payable to the Department
- If there is a claim made against the bond, the Surety will pay up to the full amount to the State. The marijuana establishment will reimburse the amount paid out by the Surety
How much does a Maine Marijuana Surety Bond cost?
The bond cost is a percentage which ranges between 1%-5% of the bond amount. The bond amount for Maine marijuana surety bonds vary:
Retail marijuana store: $500,000
Retail marijuana cultivation facility with 3,000 square feet or less of plant canopy: $600,000
Retail marijuana cultivation facility with more than 3,000 square feet of plant canopy: $1,100,000
Retail marijuana products manufacturing facility: $600,000;
Retail marijuana testing facility: $800,000 (unless the applicant is accredited pursuant to standard ISO/IEC 17025 of the International Organization for Standardization by a 3rd-party accrediting body or is certified, registered or accredited by an organization approved by the department)
Retail marijuana social club: $500,000
How can I obtain a Maine Marijuana Surety Bond?
The first step is to look for an authorized surety bond agency that is able to provide this type of surety bond for your cannabis business.
Here are the next few steps to take to qualify for a bond:
STEP 1: Apply for the bond
First, you need to submit a bond application. If you’re ready to apply now, you may do so here!
STEP 2: Underwriting
We will ask you a couple of important information needed for the bond. This will include your financial history, business performance history, and your credit score. An underwriter will carefully evaluate all those.
Completed bond application
Bond form (a copy can be obtained from the Department)
Financial documents (escrow account balances, letters of credit, bank account balances, income, operational expenses, other sources of revenue)
Other requirements as needed (budget calculating funds, seller’s permit, facility use permit, general and administrative expenses paid, etc.)
STEP 3: Bond execution
Once the underwriter is done with the underwriting process, we will immediately issue the bond to you!
If you need more information about Maine marijuana surety bonds, please contact us!