California Cannabis Surety Bond – What you need to know!
Cannabis Surety Bond – California cannabis business owners are now required to establish a surety bond and here’s what you need to know…
The Cannabis Surety Bond (some are calling it the “$5000 bond”) is required for new cannabis operations to obtain their license. If your business is already up and running, it’s important for you to comply because penalties may involve significant fines or the state may even go to the extent of shutting down your business. Not worth the risk.
What is it for? The short answer.
The Cannabis Surety Bond is an agreement (or guarantee) between you, the business owner, and the government. In the event that the State incurs an expense or a cannabis business owner fails to pay sales and/or excise taxes, the State may choose to liquidate the bond in order to compensate for the loss. This bond also acts as a “performance guarantee” for cannabis operations who are constructing new facilities to ensure satisfactory completion of the project.
Details of the Cannabis Surety bond can be found in Section 26051.5 on the California Legislature website as well as the Bureau of Cannabis Control.
One of the advantages to working with us here at The Cannabis Coverage Company is that we can manage all of this for you. Laws and regulations change frequently in the cannabis industry and, unless you enjoy reading legalese, you can let us maintain your policies for you.
Contact us today if you have questions or to learn about what coverages are right for you.