What is a Colorado marijuana bond?
Some municipalities throughout the state of Colorado require marijuana businesses to post a surety bond. Companies must obtain and post the bond before they can legally conduct marijuana-related activities. Businesses that may need to post this bond include dispensaries and cultivation facilities – for retail and medical use.
Current Bond Requirements in Colorado
In the past, Colorado required surety bonds on the state level. But in 2016, the governor signed a bill to repeal the requirement due to a lack of available sureties for the marijuana industry. Medical marijuana and retail marijuana establishments were no longer required to post a bond to obtain or renew a business license. Retail marijuana cultivation facilities no longer had to file a state tax surety bond. Today, marijuana bonds are required on the local level in Colorado in specific locations. Each city or county has its own regulations governing the marijuana industry.- City of Federal Heights Medical or Retail Marijuana License Bond: $5,000
- City of Lafayette Retail or Medical Marijuana License Bond: $5,000
- Town of Antonito Marijuana Surety Bond: $25,000·
Get Your Colorado Marijuana Bond:
Quick Takeaways
- Some municipalities throughout the state of Colorado require marijuana businesses to post a surety bond.
- Each city or county has its own regulations governing the marijuana industry.
- A marijuana surety bond offers financial protection for parties that may experience losses due business misconduct.
- You may need a separate license (and surety bond) for each business location.
How do Colorado cannabis bonds work?
Marijuana bonds are contractual agreements signed by three parties:
- Principal: The marijuana business that must purchase and post the bond
- Obligee: The governing authority that requires the bond
- Surety: The company that underwrites, issues, and guarantees the bond
READ MORE
The surety bond offers financial protection for parties that may experience losses due to business misconduct. If a marijuana company violates their bond contract and costs a customer or state money, the harmed party may file a claim against the bond. The surety may investigate to see if the claim is valid. If it is, the surety will pay the claimant up to the full bond amount to settle the claim. The principal must later repay the surety, plus interest and attorney’s fees.
How much do marijuana bonds cost in Colorado?
The cost of your marijuana bond will depend on your municipality, your creditworthiness, the type of bond you need, business financials, and other factors. If you have excellent credit, industry experience, and strong financial backing, you might pay as little as 1% of the bond amount. So if you live in Antonito and need a $25,000 bond, you might only have to pay $250 per year.
Why does a marijuana business need this bond?
Depending on the specific surety bond required, the purpose may be to ensure your business fulfills its obligations to maintain its license or pays all taxes in full and on time. Surety bonds guarantee that businesses comply with state, city, and industry laws and regulations.
Other Requirements in the State of Colorado
Remember that you may need to renew your bond annually or biannually. You may also need a separate license (and surety bond) for each business location. Your bond rate may improve over time if you meet specific standards, lowering your premiums. The bond may remain in effect until canceled. To cancel your bond, you must give your obligee 30 days’ written notice.
Get a Marijuana Bond in Colorado
We can help you find the right marijuana bond for your business. ZipBonds offers the fastest and most secure option for getting bonded. Our all-digital platform is intuitive and straightforward. Begin your application online, or call us at 888.435.4191 to speak with an agent directly.
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.