Utah Cannabis Production Establishment Performance Bond
What is a Utah Cannabis Production Establishment Performance Bond?
It is a license requirement that will serve as a financial recourse for the Utah Department of Agriculture and Food if the licensed cannabis production establishment fails to perform its required duties.
Get to know what a Marijuana-Cannabis Surety Bond is before you secure one.
Who is required to get a Utah Cannabis Production Establishment Performance Bond?
Every cannabis production establishment in the State of Utah is required to get this bond.
A cannabis production establishment can be any of the following:
Cannabis Cultivation Facility – a facility that possesses, grows, or intends to grow, sells, or intends to sell cannabis to another cannabis cultivation facility or a cannabis processing facility
Cannabis Processing Facility – is a facility that performs the following tasks:
- Acquires or intends to acquire cannabis from a cannabis production establishment or a holder of an industrial hemp processor license under Title 4, Chapter 41, Hemp and Cannabidiol Act
- Possesses cannabis with the intent to manufacture a cannabis product
- Manufactures or intends to manufacture a cannabis product from unprocessed cannabis or cannabis extract
- Sells or intends to sell a cannabis product to a medical cannabis pharmacy or the state central fill medical cannabis pharmacy
Independent Cannabis Testing Laboratory – is a laboratory that performs the following tasks:
- Conducts a chemical or other analysis of cannabis or a cannabis product
- Acquires, possesses, and transports cannabis or a cannabis product with the intent to conduct a chemical or other analysis of the cannabis or cannabis product
How does a Utah Cannabis Production Establishment Performance Bond work?
There are 3 parties to a performance bond:
The Cannabis Production Establishment will be the Principal of the bond. The Principal is the person obligated to perform tasks that are dictated by the relevant laws of the State and the Utah Department of Agriculture and Food.
The Utah Department of Agriculture and Food is the Obligee of the bond. The Obligee will be the beneficiary of the bond.
The Surety is the institution that will provide this surety bond. The Surety will guarantee the compliance of the Principal to its obligations. The Surety will also guarantee the payment of any valid bond claim to the Obligee.
Under the terms of the indemnity agreement, if a claim has been paid by the Surety, the Principal must repay the Surety soon after.
How much does a Utah Cannabis Production Establishment Performance Bond cost?
The bond cost or bond premium will be a small percentage of the bond amount. The bond premium will depend on the Principal’s credit score.
If the Principal has an excellent credit score, the bond premium can be as little as 1% of the bond amount.
$250,000 per Cannabis Cultivation Facility
$50,000 per Cannabis Processing Facility
$50,000 per Independent Cannabis Testing Laboratory
How to get a Utah Cannabis Production Establishment Performance Bond
- Apply for this surety bond HERE
- After we have received your application, we will ask you to submit the necessary information needed for the underwriting process. These are the following:
- Your financial capability
- Your business or job performance history
- Your credit score
Our expert underwriter will carefully evaluate all three to attain the best credit decision possible. To avoid any delay, the information that you should submit should be organized and concise.
- Sign the indemnity agreement
- Pay the bond premium
That’s it. Your bond will be issued immediately after.