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Colorado Marijuana Surety Bonds

What is a Colorado Marijuana Bond?

  • A Colorado Marijuana Bond is a surety bond that is required to be posted by marijuana businesses in some municipalities (city, county, township, etc.) in the State of Colorado. The bond must be posted before the business is licensed to engage in any marijuana related activities. These business activities include the operation of dispensaries, cultivation facilities, processing facilities, testing laboratories, and the transportation of marijuana or marijuana related products.
  • The State of Colorado no longer requires marijuana businesses to post surety bonds at the state level. The bonds are only required at the local level. On March 11, 2016, Colorado Governor John Hickenlooper signed House Bill 16-1041, which repealed the state law that mandated surety bonds. The reason for the repeal was because, at the time, there were no surety companies willing to write marijuana related surety bonds. This was a result of a couple of federal racketeering lawsuits filed against marijuana businesses and the businesses that were working with them. Soon thereafter, most municipalities, including Denver, followed suit and repealed their surety bond requirements.
  • But, times have changed! The ProSure Group has cultivated relationships with a handful of sureties that are willing to write marijuana/cannabis surety bonds.
  • Colorado allows local city and county governments to pass their own regulations and ordinances concerning marijuana businesses, as long as they also comply with the State’s rules and regulations. Therefore, some municipalities have created ordinances in addition to the state’s. Below, to the best of our knowledge, are the municipalities that have passed ordinances requiring marijuana businesses to post a surety bond:
    • Town of Antonito Marijuana Surety Bond - $25,000
    • City of Federal Heights Marijuana Center License Bond - $5,000
    • City of Lafayette Retail or Medical Marijuana License Bond - $5,000
  • We also write:
  • If you need a Colorado Marijuana Surety Bond but don’t see it above, please give us a call on our toll free number, 1-800-480-3883. Legislation is always changing, so we may not have had the chance to update our website yet. Regardless if it is listed or not, we can write your bond!

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  • Due to the risk from the perspective of the bonding company, Marijuana Surety Bonds are very carefully underwritten and priced accordingly. Part of the cost of this bond will be the time and effort needed to provide the documentation and information the bonding company will need. Smaller bonds, usually less than $25,000, are underwritten based on the owner’s personal credit. Larger bonds will require much more information, including personal credit, personal financials, corporate financials, and a business plan. Of course, we can typically handle all credit types and financial situations - from excellent to poor - as such those terms vary.
  • Colorado Marijuana Surety Bonds can be written for a small percentage, usually between 1% and 5% of the bond amount when applicants meet certain underwriting criteria.
  • The ProSure Group has a handful of markets willing and able to write marijuana/cannabis surety bonds. Contact us today for details!

Colorado Marijuana Surety Bonds are in place for a number of reasons. Some of the bonds are used to ensure the Principal pays taxes, while other bonds are used to ensure the Principal faithfully performs all obligations in connection with their marijuana business license. Each municipality has different regulations and ordinances, therefore, each uses a surety bond to guarantee something different.

  • Most marijuana bonds are required at the state level. However, Colorado has repealed the surety bond requirement. So instead, if a bond is required for a marijuana business in Colorado, then it is being required by a local municipality. Colorado has allowed local governments to govern marijuana businesses as they see fit, as long as they don’t conflict with state laws. Most local governments have done away with the bond requirement, but there are still a few that do require them.
  • The entity that requires the bond is called the Obligee. You, the marijuana business, are the Principal on the bond.
  • All marijuana/cannabis bonds are different. Some bonds renew on an annual basis and others renew biennially. There are even some bonds that are only required to be in force until the Principal meets certain obligations. Additionally, some Obligees will allow for the bond amount to be lowered as the Principals meet certain benchmarks. Your bond agent should know these requirements. That information is also stated directly on the bond form.
  • In most cases, the Colorado Marijuana Surety Bond will remain in full force and effect from the effective date until it is cancelled. Therefore, the bond will renew every year and the bonding company will bill for the bond on an annual basis. Bonds have cancellation clauses that usually allow for cancellation with thirty (30) days written notice to the Obligee.

Contact The ProSure Group! As surety bond experts in business since 1993, The ProSure Group has experience handling bonds of this type and has partnerships with more than 30 different surety companies, most of which are A.M. Best Rated and Treasury Listed. This ensures that we get you the best, most competitive pricing and terms available in the marketplace. You just need to complete our simple application and one of our specialists will quickly contact you.

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If you don't see the bond you're looking for give us a call at (800) 480-3883 and speak to one of our many
Colorado Marijuana Surety Bond Experts!
Type Bond Obligee Bond Amount
License City of Federal Heights Marijuana Center License Bond City of Federal Heights, Colorado
$5,000
License City of Lafayette Retail or Medical Marijuana License Bond City of Lafayette, Colorado
$5,000
License Town of Antonito Marijuana Surety Bond Town of Antonito, Colorado
$25,000