Ohio Medical Marijuana Control Program Surety Requirements
Scheduled to be operational on September 8, 2018, the Ohio Medical Marijuana Control Program is responsible for implementing and managing the cultivation, processing, distribution, and use of medical marijuana in Ohio. Under the program all licensees are required to demonstrate financial responsibility by posting a surety bond issued by an authorized surety company or place cash in escrow. The surety bond guarantees that the licensee will operate in a responsible manner and fully comply with all statutes and regulations pertaining to Ohio’s Medical Marijuana Control Program. Ohio Medical Marijuana Control Program consists of four license groups: Cultivators, Processors, Dispensaries and Testing Laboratories.
Cultivators are required, pursuant to O.A.C. 3796:2-1-05, to obtain and maintain a surety bond. A Level I Cultivator is required to obtain a $750.000. A Level I Cultivator Licensee is permitted to operate an initial marijuana cultivation area up to 25,000 square feet. Twelve Level I Cultivator licenses were issued by the state of Ohio in late 2017. A Level II Cultivator is required to obtain a $75,000 surety bond. Level II cultivators are permitted to operate an initial marijuana cultivation area of 3,000 square feet. The state of Ohio awarded 12 Level II Cultivator licenses in late 2017. All cultivators that hold licenses must comply with all statutes and regulations pertaining to Ohio’s Medical Marijuana Control Program and ensure a consistent supply of medical marijuana is available for sale to licensed processors and dispensaries.
Pursuant to O.A.C. 3796:3-1-05, Processor licensees are required to obtain and maintain a surety bond in the amount of $250,000. The financial responsibility requirement for Processors must be before a certificate of operation is issued. Each processor that is awarded a license has up to 6 months from the time of award notification until they must obtain the certificate of operations. The state of Ohio will issue up to 40 licenses to Processors in 2018.
Ohio Medical Marijuana Dispensaries are required to obtain and maintain a surety bond in the amount of $50,000, pursuant to O.A.C. 3796:6-2-11. The surety bond must be submitted to the state within 90 days after the effective date of the provisional licenses. A dispensary is authorized to sell medical marijuana products to qualifying caregivers and patients in the state. Ohio has authorized up to 60 Dispensary licenses.
Ohio Medical Marijuana Testing Laboratories are required to obtain and maintain a surety bond in the amount of $75,000, pursuant to O.A.C. 3796:4-1-05. Ohio will award an unspecified number of Testing Laboratory licenses in 2018. A medical marijuana testing laboratory must post a surety bond with the state of Ohio prior to receiving its Testing Laboratory Certificate of Operations and within 6 months of receiving a provisional license.
Continental Heritage Insurance Company has the experience and expertise to meet your surety needs. Since its founding in 1980, Continental Heritage Insurance Company has continually evolved to help enhance businesses operating in both established and groundbreaking markets. Continental Heritage is continuing this tradition by providing surety bonds for license holders of the Ohio Medical Marijuana Control Program. We have a reliable, dedicated, and responsive underwriting team and our underwriting process has been tailored and simplified for the Ohio Medical Marijuana Control Program. In most cases no cash collateral is required after demonstration of sufficient financial wherewithal by the applicant and indemnification by its owners.
Contact us today through our website or email [email protected] to discuss how Continental Heritage can meet your surety needs.