New York Registered Marijuana Registered Organization Bond
What is a New York Registered Marijuana Registered Organization Bond?
It is a legal contract among the marijuana registered organization, New York Commissioner of Health, and the Surety.
It is a promise provided by the marijuana registered organization (Principal) and the Surety’s commitment to pay the New York Commissioner of Health (Obligee) in case the Principal defaults on the bonded obligations as stated in Section 3365 of the New York Public Health Law.
Who is required to get a New York Registered Marijuana Registered Organization Bond?
A registered organization may opt to post this surety bond in place of providing copies of all applicable executed and proposed deeds, leases, and rental agreements or executed options contracts related to the organization’s real property interests. The said documents must show that the applicant possesses or has the right to use sufficient land, buildings, and other premises as specified in the application and equipment to properly carry on the activities for which registration is sought.
A registered organization is a for-profit business entity or not-for-profit corporation organized to acquire, possess, manufacturing, selling, delivering, transporting, distributing, or dispensing approved medical marijuana products.
Other requirements that a marijuana organization must fulfill to become registered are as follows:
- Complete and submit the medical marijuana program application form
- Pay the application fee of $10,000 (accompanied by a check for an additional $200,000—the amount will be refunded to applicants not selected as registered organizations)
- Provides that the department shall initially register up to five applicants as registered organizations according to enumerated factors
- Allows the New York Department of Health reasonable access to the applicant’s facilities for inspection
- Provides that registrations shall be valid for 2 years
How does a New York Registered Marijuana Registered Organization Bond work?
A Marijuana-Cannabis Surety Bond is assuring the Obligee (New York Commissioner of Health) that the Principal will faithfully perform the duties required by the New York Department of Health and the relevant laws of the State.
A breach of this contract happens if the Principal fails to perform any of the bonded obligations. In such a case, the Obligee will be eligible to recover the losses it incurred by filing a bond claim.
If the claim is valid, the Surety will pay the Obligee up to the penal sum of the bond. The Principal must repay the Surety as part of the indemnity agreement.
How much does a New York Registered Marijuana Registered Organization Bond cost?
The bond amount should not be less than $2,000,000.
The bond premium is a small percentage of the bond amount. For applicants who have excellent credit scores, the bond premium can be 1% of the bond amount.
How to get a New York Registered Marijuana Registered Organization Bond
STEP 1: Apply for your registered organization bond HERE.
STEP 2: Submit all the necessary requirements to us. You may use our secure upload portal. Some of the documents that we need are as follows:
- Financial statements
- The Principal’s credit score
- The Principal’s business performance history
STEP 3: Sign the indemnity agreement.
STEP 4: Pay the bond premium. You’ll receive your bond immediately after.