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Illinois Medical Cannabis Surety Bonds

In the state of Illinois, those who wish to partake in medical marijuana business must obtain licensure that mandates the posting of surety bonds for timely sales tax revenue payments, as well as ensuring legal business performance. Further, the business performance regulates the lawful manufacturing and dispensing of medicinal cannabis. Once the cultivation business has submitted its license application to the Illinois Department of Agriculture, a surety bond is required.

State Of Illinois Marijuana Licensure

Illinois carries extensive guidelines and fees associated with applying for marijuana dispensary and cultivation licensure. In addition to obtaining a surety bond, the state requires the following medical cannabis dispensary documents to be submitted at the time of application:

  • Suitability of proposed dispensary
  • Security plan
  • Business operations plan
  • Recordkeeping and inventory plan
  • Financial disclosures

Bond Types

The surety agents at ProSure Group are dedicated to assisting individuals through this process to determine the necessary surety bond needed so that your establishment may legally operate in Illinois. Once the bond is identified ProSure Group will move forward with underwriting and completing the necessary steps to issue the bond.

Medical Cannabis Cultivation Center Surety Bond

A medical cannabis cultivation center surety bond solidifies legal financial, performance and continual construction operations. Additionally, a continual post-construction 90-day production of medical cannabis is ensured to be provided to the licensed dispensaries.

The cultivation center shall serve as the principal named on the surety bond. The bond must also meet all the conditions of the Illinois Department of Agriculture outlined below.

  • The surety company writing the bond shall be authorized and licensed by the Illinois Department of Insurance (DOI).
  • The cultivation center's business name and registration number on the bond should correspond with DOI records.
  • A copy of the bond must be received by the DOI within 15 business days of when the center was notified of its selection and eligibility for a permit.
  • If the surety plans to end the bond on a cultivation center, the DOI must be notified of the cancellation in writing no less than 30 days before. A cultivation center that fails to file a new bond following a cancellation or a lapse in renewal may have its permit revoked.

Medical Cannabis Dispensing Organization Registration Surety Bond

This bond ensures that the dispensing establishment completes any construction timely and successfully; operates legally and provides continual cannabis production; submits renewal fees; maintains bookkeeping; abides by Illinois tax regulations; submits required reports; and abides by Illinois Administrative Rules.

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Depending on the financial status and credit score of the applicant, the bond cost will vary. Typically, the cost of the bond is anywhere from 1 percent to 2 percent of the total bond amount. Note that Illinois does outline the following costs related to bonds:

  • The bond amount for registration of a medical cannabis dispensary is $50,000
  • The amount for a medical cannabis cultivation center performance bond is $1,500,000

Should the cultivation establishment successfully continue operations the bond amount may be reduced by $500,000. Further, the necessary criteria are as follows:

  • The cultivation center is operational and capable of meeting cannabis production levels as outlined in the permit application; and
  • The center has operated without substantial interruptions, provided an uninterrupted supply of medical cannabis to licensed dispensaries, and committed no violations of the Compassionate Use of Medical Cannabis Pilot Program Act for one, two, or three years consecutively.

Alternatively, a cannabis cultivation center risks forfeiture of the balance of a medical marijuana surety bond in the event of one of the following circumstances:

  • The cultivation center fails to begin production within six months of receiving its permit and does not apply for or was not granted an extension by DOI
  • The center is unable to maintain production for more than 90 consecutive days after the completion of the construction of its facility
  • The center does not provide an uninterrupted or sufficient supply of medical cannabis to licensed dispensaries to supply their registered patients

The first step is to contact a surety bond company, such as ProSure Group. Our agents provide professional assistance throughout the entire process. Once the necessary paperwork and documents are submitted to ProSure Group, underwriting will begin. Once all matters are in order the bond will be executed and assign the bond.

Apply For Your Bond Now to get your Illinois Medical Cannabis Cultivation Center Surety Bond

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