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Connecticut Medical Marijuana Producer Performance Bond
What is a Connecticut Medical Marijuana Bond?
A Connecticut Medical Marijuana Bond is a surety bond that is required to be posted by production facilities before they are licensed to produce medical marijuana in the State of Connecticut. In fact, there are two performance bonds required to be posted by production facilities:
Connecticut Medical Marijuana Producer Performance Bond For the Construction of a Production Facility - $2,000,000
Connecticut Medical Marijuana Producer Performance Bond For the Operation of a Production Facility - $1,500,000
The $2,000,000 Connecticut Medical Marijuana Producer Performance Bond For the Construction of a Production Facility must be posted after a production facility has been approved for their license, but before they can begin the cultivation of medical marijuana. The performance bond guarantees that the Principal (Medical Marijuana Producer) will successfully complete the construction of a production facility and will complete said construction in a timely manner.
The $1,500,000 Connecticut Medical Marijuana Producer Performance Bond For the Operation of a Production Facility must be posted after the Commissioner of DCP determines that the Principal has timely and successfully met its obligation to construct a production facility. The performance bond guarantees that the Principal will operate the production facility in a manner that provides substantially uninterrupted supply of marijuana to its usual dispensary facility customers.
A production facility is defined as a secure, indoor facility where the production of marijuana occurs and that is operated by a person whom the department has issued a producer license. Producers are authorized to cultivate (plant, propagate, grow, harvest) marijuana for palliative use. Production facilities are only authorized to sell marijuana to state licensed dispensary facilities.
If you need a Connecticut 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. Most bonds are required at the state level, but some may be required at the city and/or county level. Regardless if it is listed or not, we can write your bond!
Due to the risk from the perspective of the bonding company, Medical 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. In all cases, personal credit, personal financials, and business financials will be required. In most cases, a business plan will also be required. Of course, we can typically handle all credit types and financial situations - from excellent to poor - as such those terms vary.
Connecticut Medical Marijuana Producer Performance Bonds can be written for between 1% and 5% of the total bond amount when applicants meet certain underwriting criteria such as excellent credit, excellent personal and business financials, and excellent industry experience.
The ProSure Group has a handful of markets willing and able to write marijuana/cannabis surety bonds. All of which, are A.M. Best Rated and T-Listed.
The Connecticut Medical Marijuana Producer Performance Bond For the Construction of a Production Facility is in place to ensure the production facility is built in a timely manner and is fully operational and able to commence production of marijuana.
The Connecticut Medical Marijuana Producer Performance Bond For the Operation of a Production Facility is in place to ensure the production facility provides a substantially uninterrupted supply of marijuana.
On May 31, 2012, Connecticut Governor Dan Malloy signed House Bill 5389, “An Act Concerning the Palliative Use of Marijuana”. The Act protects patients, physicians, caregivers, licensed dispensaries, and licensed producers from arrest when using, recommending, or handling medical marijuana. On September 6, 2013, the final regulations for Connecticut’s medical marijuana program were issued in accordance with Connecticut General Statutes, Chapter 420f Palliative Use of Marijuana.
The Connecticut Department of Consumer Protection (DCP) was charged with implementing and regulating the State’s Medical Marijuana Program. R.C.S.A. Section 21a-408-52(d) Operation of production facility - stipulates the requirement of a surety bond for production facilities. Regulations of Connecticut State Agencies Section 21a-408-29 Escrow Account Terms - details the ability to reduce the bond amount upon following certain milestones. The Obligee on both bonds is the State of Connecticut. You, the production facility, are the Principal on the surety bond.
The $2,000,000 Connecticut Medical Marijuana Producer Performance Bond For the Construction of a Production Facility remains in full force and effect from the effective date until the Commissioner of DCP determines, after a hearing pursuant to the Uniform Administrative Procedures Act, sections 4-166 to 4-189, that the Principal has either failed to or has successfully completed construction of a production facility. If the Commissioner determines the Principal has failed, then the Surety shall immediately make payment of $2,000,000 to the State. If the Commissioner determines the Principal was successful, then this surety bond shall be null and void.
The $1,500,000 Connecticut Medical Marijuana Producer Performance Bond For the Operation of a Production Facility remains in full force and effect from the effective date until the five (5) year anniversary of the effective date upon following certain conditions or until the Principal voluntarily chooses not to renew the producer license. The DCP allows for the reduction of the bond amount upon the Principal meeting the following milestones:
If the Commissioner of DCP determines the production facility remained operational without substantial interruption and without any violations of State rules and regulations for a one year period, then the bond amount shall be reduced to $1,000,000.
The bond may then be reduced to $500,000 if the Commissioner determines the facility remained operational without substantial interruption or any violations of State rules or regulations for an additional two consecutive years following the one-year period in which the bond was initially reduced.
The bond obligation shall be null and void if the Commissioner determines the facility remained operational without substantial interruption or any violations of State rules or regulations for a second period of two consecutive years following the two-year period in which the bond was reduced to $500,000.
Contact The ProSure Group! As surety bond experts in business since 1993, The ProSure Group has experience handling many bonds of this type and has partnerships with more than 30 different surety companies. 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.
