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Florida Medical Marijuana Performance Bond

What is a Florida Medical Marijuana Bond?

  • A Florida Medical Marijuana Bond is a $5 million surety bond that is required to be posted by a Medical Marijuana Treatment Center after its license to cultivate, process, and dispense medical marijuana has been approved by the State of Florida. A Medical Marijuana Treatment Center, or MMTC for short, is defined by the state as an entity that acquires, cultivates, possesses, processes, transfers, transports, sells, distributes, dispenses, or administers marijuana, products containing marijuana, related supplies, or educational materials to qualifying patients or their caregivers and is registered by the Florida Department of Health.
  • The Medical Marijuana Surety Bond in Florida is officially known as the Florida Medical Marijuana Performance Bond. The performance bond must be posted within ten (10) business days upon notification that the MMTC has been approved to operate. According to Florida Statute 381.986, a MMTC will be required to maintain a $2 million performance bond upon the serving of 1,000 qualified patients. This determination, of course, would need to be made by the Florida Department of Health. The surety bonds are only required for Medical Marijuana Treatment Centers, they are not required for each individual dispensing facility.
  • Florida Statute 381.986 - Medical use of marijuana, requires that the performance bond is issued by an authorized surety insurance company rated in one of the three highest rating categories by a nationally recognized rating service. The ProSure Group is appointed with over 30 of the largest, most reputable surety companies in the country. Due to the risk still associated with the marijuana industry only a few of these companies are willing to issue marijuana related surety bonds. Luckily, we have great relationships with all of them! The sureties we use for these bonds are all A.M. Best Rated “A” or higher and are listed on the U.S. Department of the Treasury's Listing of Certified Companies, also known as T-listed.
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  • If you need a Florida 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 county and/or city level. Regardless if it is listed or not, we can write your bond!

 

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  • In May of 2014, The Florida Legislature passed Senate Bill 1030 a.k.a. The Compassionate Medical Cannabis Act of 2014. The Act allowed certain licensed and qualified physicians to “prescribe” low-THC cannabis to terminally ill patients that had less than a year to live. The Act also required the Florida Department of Health to authorize five entities to grow, process, and dispense the low-THC cannabis as well as to create a registry of medical marijuana patients.
    • Low-THC cannabis is defined as a plant of the genus Cannabis (aka marijuana), the dried flowers of which contain 0.8% or less of tetrahydrocannabinol (THC) and more than 10% of cannabidiol weight for weight; the seeds thereof; the resin extracted from any part of such plant; or any compound, manufacture, salt, derivative, mixture, or preparation of such plant or its seeds or resin that is dispensed from a medical marijuana treatment center.
  • In late 2016, the Florida Medical Marijuana Legalization Initiative, also known as Florida Amendment 2, was voted into law becoming Section 29 of Article X of the Florida Constitution. This section details medical marijuana production, possession, and use, including the use of medical marijuana for patients with specific debilitating medical conditions. Previously, only cannabis that contained less than 0.8% THC was available to patients. Section 29 states that the Department of Health shall issue reasonable regulations necessary for the implementation and enforcement of the section no later than six (6) months after the effective date of the section, which was early July 2017.
  • On July 3, 2017, the Florida Department of Health adopted Regulation 1-1.01: Medical Marijuana For Debilitating Medical Conditions, which implements Senate Bill 8-A (Ch. 2017-232), Medical Use of Marijuana, and Article X, Section 29 of the Florida Constitution. Both bills were signed by Governor Scott, which was the final step in the legislative process finalizing the constitutional amendment. The Department of Health is required to issue ten (10) additional MMTC licenses by October 3, 2017. One such license must be issued to an applicant that is a recognized class member of Pigford v. Glickman, 185 F.R.D. 82 (D.D.C. 1999), or In Re Black Farmers Litig., 856 F. Supp. 2d 1 (D.D.C. 2011) and is a member of the Black Farmers and Agriculturalists Association-Florida Chapter. For up to two (2) licenses, the department shall give preference to applicants that demonstrate they currently own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility/ies for the processing of marijuana.
  • In September of 2017, just weeks before the state was supposed to issue the additional licenses, the department enacted Emergency Rule 64ER17-1 (64-4.001) & 64ER17-2 (64-4.002). The Rule is a substantial rewording of Rule 64-4.001. The new rule introduced less restrictive qualification requirements for applicants. Previously, applicants could only qualify for the license if they were a nursery that operated in the State of Florida for the past 30 continuous years and had at least 400,000 plants. Now, in order to qualify, applicants must demonstrate they have been registered to do business in Florida for the prior five consecutive years and that the applicant possesses a valid certificate of registration issued by the Department of Agriculture and Consumer Services pursuant to section 581.131, F.S. The emergency rule also brought forth a new application, bond form, background screening process and most importantly a blind third-party scoring process. The state hopes this will alleviate both positive and negative bias towards any applicants, and, will hopefully create a fair way to award the most qualified applicants with a license while avoiding any future litigation from those that aren't awarded a license.
    • Because of this new rule, the state missed their previous deadline of issuing the additional licenses by Oct. 3, 2017. In fact, the emergency rule states that the department shall publish the date upon which they will begin accepting applications and the deadline to receive all applications. As of Oct. 31, 2017, the State has not yet published these dates. Stay tuned!
  • Additionally, the next four (4) highest scoring applicants, after this round of licenses are issued, will be awarded contingent licenses that will not become active until the department provides notification of the registration of 100,000 active patients in the Medical Marijuana Use Registry. MMTC’s are restricted to operating a maximum of 25 dispensing facilities. For every 100,000 active patients in the medical marijuana use registry, MMTC’s will be allowed to operate an additional five (5) dispensing facilities. This cap on dispensing facilities is set to expire on April 1, 2020. Stay tuned to this page and the ProSure Group blog for updates.
  • Marijuana is defined as all parts of any plant of the genus Cannabis, whether growing or not; the seeds thereof; the resin extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant or its seeds or resin, including low-THC cannabis, which are dispensed from a MMTC for medical use by a qualified patient.
  • Florida Medical Cannabis Surety Bonds can be written as low as 1% of the bond amount when applicants meet certain underwriting criteria such as excellent credit, excellent personal and business financials, and excellent industry experience. In this case, this $5 million bond could cost as low as $50,000 per year. The ProSure Group has a handful of markets willing and able to write MMTC bonds.

** Please note that The ProSure Group does not charge any administrative fees to write these bonds. You pay the bond premium and that is it, nothing more!

  • Additionally, The ProSure Group has also been able to secure the ability to waive personal indemnity for owners and spouses under certain circumstances.
  • Due to the risk from the perspective of the bonding company, Medical Cannabis 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. Of course, we can typically handle all credit types and financial situations - from excellent to poor - as such those terms vary.

The Florida Medical Marijuana Treatment Center Bond is in place to ensure Medical Marijuana Treatment Centers abide by all of the requirements set forth in Rule 64-4, Florida Administrative Code. One of those requirements says the dispensary must demonstrate the financial ability to maintain operations for the duration of the 2-year approval cycle. The bond also states the MMTC must comply with Section 381.986, Florida Statutes. Those Statutes dictate, among other things, the use of pesticides, where the cannabis may be grown, the inspection of seeds and plants for pests, where the cannabis can be processed, the testing of processed cannabis, the packaging requirements of cannabis, when and how cannabis is dispensed, the keeping of accurate records, the safety and security of facilities, and the safe transport of cannabis.

The Compassionate Medical Cannabis Act of 2014 charged the Florida Department of Health (DOH) with the responsibility to oversee the regulatory infrastructure for medical cannabis. Within the Department, the Office of Compassionate Use (OCU) was created, and later renamed the Office of Medical Marijuana Use, to write and implement the department’s rules, oversee the medical marijuana use registry, and license the businesses under Florida Statutes, Section 381.986 and Senate Bill 8-A. The Department is the only claimant with legal standing to make a claim on the bond. The Obligee on the surety bond is the Florida Department of Health, Office of Medical Marijuana Use (OMMU).

Florida Medical Marijuana Surety Bonds run concurrently with your license, which is valid for a period of 2 years. The bond may be extended for additional two-year terms with a continuation certificate from the surety. The bonding company will typically bill for the bond biennially. The surety bond may be canceled by the surety company with 90 days’ written notice to the Principal (Medical Marijuana Treatment Center) and the Obligee (Florida Office of Medical Marijuana Use).

Contact The ProSure Group! As surety bond experts in business in Florida 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.

What you will need to submit to obtain your license:

  • Completed Application for Medical Marijuana Treatment Center Registration (Form DH8013-OMMU-08/2017)
  • Provide certified documentation from the Florida Department of State or Florida Department of Revenue, demonstrating that the applicant has been registered to do business in the state of Florida for the previous 5 consecutive years.
  • Provide a certified copy of a valid certificate of registration used by the Department of Agriculture and Consumer Services pursuant to section 581.131, Florida Statutes.
  • Provide a list of all owners, managers, officers, and board members indicating the date of each individual’s most recent level-2 background screening. All individuals must provide fingerprints and pass the background check.
  • Initial Application Fee of $60,830.00
  • $5 Million Florida Medical Marijuana Performance Bond (Form DH8015-OMMU-08/2017)
  • Applicants are also asked to provide information about their personnel, technical ability, accountability, security and infrastructure that will assist the OMMU in making its selection. This information includes details about knowledge and experience in the cultivation, processing, and dispensing of cannabis as well as information about their medical director, diversity plan, and financial assurance.
  • And more.
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
Florida Medical Marijuana Bond Surety Bond Experts!
Type Bond Obligee Bond Amount
License Florida Medical Marijuana Performance Bond Florida Department of Health, Office of Medical Marijuana Use
$5,000,000