Utah Cannabis Production Establishment Performance Bond
Utah cannabis production establishments are required to post a cannabis performance bond as part of their licensure under Utah’s medical cannabis program. Bond amounts are tiered by activity type: cultivation and Tier 1 processing licensees post a $100,000 performance bond, while Tier 2 processing and independent testing laboratory licensees post a $50,000 performance bond. The program is administered by the Utah Department of Agriculture and Food (UDAF) for production establishments and the Utah Department of Health and Human Services Center for Medical Cannabis for the pharmacy side.
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.
Utah Production Establishment Bond Amounts
- Cultivation: $100,000 performance bond.
- Tier 1 processor: $100,000 performance bond.
- Tier 2 processor: $50,000 performance bond.
- Independent testing laboratory: $50,000 performance bond.
The bond runs to the State of Utah and guarantees that the licensee will operate in compliance with state law and the rules of the Department of Agriculture and Food. If a licensee fails to meet its obligations, the state can claim against the bond, and the licensee is required to repay the surety in full.
Statute and Regulator
Utah’s medical cannabis program operates under the Utah Medical Cannabis Act, codified primarily in Title 4, Chapter 41a (production establishments) and Title 26B (medical cannabis pharmacies and patient program) of the Utah Code. Production establishment licensure and the performance bond requirements are administered by the Utah Department of Agriculture and Food (UDAF). The pharmacy and patient program is administered by the Utah Department of Health and Human Services Center for Medical Cannabis.
What Underwriting Looks Like
The $100,000 and $50,000 performance 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 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.
Utah Cannabis Bond FAQs
How much is the Utah cultivation or Tier 1 processor bond?
$100,000.
How much is the Utah Tier 2 processor or testing lab bond?
$50,000.
Who is the obligee?
The Utah Department of Agriculture and Food (UDAF), which administers production establishment licensure.
What law requires the bond?
The Utah Medical Cannabis Act, with production establishment provisions codified primarily in Title 4, Chapter 41a of the Utah Code.
How long does it take to get bonded?
Timelines depend on the size of the bond and your credit. Call us at 800-333-7800 and we will tell you exactly where you stand.
Get Your Utah Cannabis Bond Today
We have been writing surety bonds since 1971 and we work with the carriers that have appetite for Utah cannabis production establishment performance bonds. Call 800-333-7800 or request a free quote online. See our national cannabis surety bond page for broader context.