Effective July 3rd, 2023, growers of medical marijuana in the state of Oklahoma need a Commercial Medical Marijuana Grower License Bond. Learn more about these license bonds, including how to easily purchase one online instantly.
Who Needs an Oklahoma Commercial Medical Marijuana Grower License Bond?
Most parties that plan to be licensed to grow medical marijuana in Oklahoma will need a grower license bond. Oklahoma defines a Marijuana Grower, Commercial Grower or Grower as,
“an individual or entity that has been issued a medical marijuana business license by the Authority, which allows the grower to grow, harvest, dry, cure, package medical marijuana and non infused pre-rolled medical marijuana with a net weight that does not exceed one (1) gram, to sell, transfer, and transport or contract with a commercial transporter for the transport of medical marijuana in accordance with Oklahoma law and this Chapter to a dispensary, processor, grower, research facility, education facility, or testing laboratory.”
Marijuana is defined by the state as,
“means the same as the term that is defined in 63 O.S. § 2-101 and shall not include any plant or material containing delta-8 or delta-10 tetrahydrocannabinol which is grown, processed or sold pursuant to the provisions of the Oklahoma Industrial Hemp Program.”
How Do You Obtain an Oklahoma Commercial Medical Marijuana Grower License Bond?
Oklahoma Medical Marijuana Grower License Bonds can be purchased online. The grower must answer a few simple questions and pass a credit check. These bonds can then be purchased and printed. Most growers will easily qualify for these bonds.
Can Oklahoma Marijuana Grower Bonds be Obtained with Bad Credit?
Generally, even those growers with credit challenges can obtain these bonds. More information may be required such as the circumstances causing the credit challenges. Growers with credit challenges should be prepared to pay higher costs for these bonds.
What Does an Oklahoma Marijuana Grower Bond Guarantee?
An Oklahoma Commercial Grower Bond guarantees the marijuana grower will:
The Oklahoma Marijuana Grower Bond is written to the Oklahoma Medical Marijuana Authority (OMMA) and protects the state against expenses of remediating the land used to grow marijuana in the event that the land is abandoned, or the grower’s license is suspended. The bond must cover the area of land within the permit area where the business license will initiate and where marijuana will be grown. The bond also requires compliance with Oklahoma’s marijuana laws and codes.
What is the Amount of an Oklahoma Marijuan Grower Bond?
Oklahoma Marijuana Grower License Bonds are required to be at least fifty thousand dollars ($50,000) for each license. However, the OMMA could require the grower bond amount to be more
“depending on the reclamation requirements to assure the completion of the reclamation plan or to defray the cost of restoration of the property including removing equipment, destruction of waste, remediation of environmental hazards, prohibiting public access, addressing improperly coded buildings, or determination of the final disposition of any seized property”.
What Does an Oklahoma Marijuana Grower Bond Cost?
The cost of an Oklahoma Marijuana Grower Bond depends on the credit or financial strength of the grower and ranges between 1% – 3% of the bond amount for most growers. Oklahoma Marijuana Growers purchasing these bonds on credit alone will typically pay about 2% or $2,000 a year for each year the bond is in place. Like most license bonds, the bond will need to be in place for each year the license is maintained and the bond premium will also be due each year. Some surety bond companies do provide discounts of up to 30% for Marijuana Growers who purchase multiple years upfront.
How Does an Oklahoma Marijuana Grower Bond Work?
The marijuana grower is the principal on the bond. The bond runs to the Oklahoma Medical Marijuana Authority. If the marijuana grower has their license suspended or revoked, they are responsible for returning the land used to grow the marijuana to an acceptable condition. If the marijuana grower does not, a claim can be made against the surety bond. A claim could also be made against the bond if the marijuana grower violates any laws or codes associated with their license.
The Surety is a third party company backing the marijuana growers commitment to remediate the land. If the marijuana grower does not or cannot remediate the land, the Surety will have to step in and pay to do so. In return for this financial promise, the surety collects a bond premium and indemnity from the marijuana grower. Indemnity means that they will seek financial reimbursement from the marijuana grower for any claims paid out, including costs. Marijuana growers should understand that these bonds are not insurance. More can be read about indemnity here.
Duration, Renewal and Cancellation
Oklahoma Marijuana Grower Bonds must be in place as long as the marijuana grower is licensed. These bonds must be renewed at least 30 days prior to the bond’s expiration date.
A surety bond company may cancel the marijuana grower bond by giving 30 days written notice to the OMMA. However, the surety will still be liable for claims that occurred while the bond was in place and during the cancellation period. If a bond is canceled, the marijuana grower will need to replace the bond with another acceptable bond and deliver the replacement bond to the OMMA by certified mail before the cancellation period has ended. Failure to meet this requirement could cause the grower to have their license suspended or non-renewed.
Claims Against an Oklahoma Marijuana Grower Bond
The surety bond company will have 30 days to investigate any claims against the grower bond. Claims can be made up to 1 year after the bond has expired or been canceled. Under no circumstances will the surety have to pay more than is listed as the bond amount, however. This is referred to as “The Penal Sum”. However, the surety’s payment does not usually limit the marijuana grower from further legal liability.
Alternative to an Oklahoma Medical Marijuana Grower Bond
As an alternative to the grower bond, an applicant may submit to the OMMA on prescribed forms, an attestation that the land on which the license will be initiated and marijuana grown has been owned by the licensee for at least five (5) years prior to the application for licensing submission. The licensee will also need to provide documented proof of such ownership.
Other Bonds Could Be Needed
Marijuana is a fast changing legal environment. Oklahoma Marijuana Growers may need other surety bonds and license bonds as well. Many of these can also be purchased online by visiting the Oklahoma Surety Bonds Page.
Most Oklahoma Marijuana Growers will need to provide grower bonds as a condition of their licensing. Fortunately, these bonds are easy to obtain and inexpensive. Marijuana growers can learn more about surety bonds and frequently asked questions by visiting our FAQ page.
You can obtain a copy of the Oklahoma Medical Marijuana Bond Grower License Bond Form by clicking on the image below: