An Ohio Medical Marijuana Dispensary License Bond is a three-party financial guarantee that helps ensure that those licensed as a dispensary to sell medical marijuana in the state complete the construction of a dispensary, keeps accurate books and records, pays the appropriate taxes, and registration fees, and follow the laws of Ohio Code 3796.
Per Ohio Rule 3796:A(14), A dispensary means:
The applicant for an Ohio dispensary license is referred to as the obligee. The obligee provides indemnity and payment to a third-party bond company called the surety. In return, the surety provides a guarantee to the State of Ohio Board of Pharmacy, known as the obligee, that the marijuana dispensary will complete construction of the dispensary, keep accurate records, pay all taxes and fees due and abide by the codes and laws of the state of Ohio. If the dispensary does not, the state can make a claim against the bond.
Should a claim be made against the dispensary bond, the surety will investigate and pay the claim if it is valid. The surety can then seek reimbursement from the principal under the indemnity agreement. The dispensary bond is beneficial to taxpayers. The state does not have to spend resources trying to collect from the principal if a problem occurs. The surety is required to pay the state within thirty days of receiving a payment demand.
The state requires dispensaries to post a bond in the amount of \$50,000. A dispensary will need a \$50,000 license bond for each dispensary location. For example, a dispensary with two locations will need two $50,000 license bonds.
Regardless of the number of bonds in place, the number of claims filed, or the dollar amount of claims, the most the surety will have to pay against any location is the $50,000 amount. However, the dispensary can still be liable for further damages.
Ohio Marijuana Dispensary License Bonds are easy to obtain for most. They can be purchased online in minutes. The applicant will simply need to pass a personal credit check and answer a few basic questions. The license bond can then be purchased and printed immediately.
For those with credit challenges or needing bonds for multiple locations, we encourage you to call and talk to one of our bond experts. Axcess Surety has bond companies that can help applicants in most situations. We will work to find you the best solution at the best price.
The cost of an Ohio marijuana dispensary bond depends on the credit and financial strength of the applicant. However, most applicants can obtain the bond online for a cost of $550 per year. Those with credit challenges could pay as much as $2,000 per year. Keep in mind that the premium will be due each year that the bond remains in place. Some bond companies will provide a discount for purchasing multiple years in advance.
Instead of a surety bond, a medical marijuana dispensary can deposit the $50,000 in an escrow account with an approved Ohio bank. The escrow account must be made payable to the Ohio State Treasurer and have terms approved by the Board of Pharmacy. The funds may not be given back to the dispensary or any representative unless a written release is obtained from the state.
While a dispensary might consider putting funds into escrow, a surety bond is usually a better choice for most dispensaries. The $50,000 cash could be used for operations or growth. Alternatively, surety bonds do not usually require a UCC or lien filing unless a claim occurs. Therefore, a dispensary can obtain a license bond and not have their assets tied up.
The Ohio medical marijuana dispensary license bond must be filed with the Board of Pharmacy within ninety days after the effect of the provisional license. The bond should be uploaded at the Board of Pharmacy’s document site. Your license number and eLicense security code will be needed to upload the dispensary license bond.
An Ohio medical marijuana dispensary bond may be canceled by giving the state thirty-day written notice. The dispensary will need to replace the bond or have its license revoked. Both the surety and the dispensary will still be responsible for any claims that occurred while the bond was active and during the cancelation period.
License Bonds are required for any medical marijuana dispensary in Ohio. These bonds are very easy to get and can be purchased online in a matter of minutes. Dispensaries may need other bonds as well. Many of these can also be purchased online by visiting our Ohio Surety Bonds Page. Contact the experts at Axcess Surety anytime for all your surety bond questions and marijuana bond needs.
Axcess Surety is the premier provider of surety bonds nationally. We work individuals and businesses across the country to provide the best surety bond programs at the best price.
