Form F: Cannabis Integrated Facility Performance ($2,000,000) - Skyward Bond - Statewide in Alabama

Brief Summary

An Alabama integrated facility applicant does not need the $2,000,000 bond in hand on the day it applies. It needs a surety willing to commit, on the Commission's Form M, that the applicant qualifies, and then the executed Form F bond by the date the Commission sets for license issuance. Lining up an A rated surety early is what keeps a winning application from stalling at the finish line.

The Alabama Medical Cannabis Commission requires every integrated facility licensee to post a $2,000,000 performance bond on its Form F, written by a surety rated at least A, under Code of Ala. 20-2A-67 and Ala. Admin. Code 538-X-9-.03. At the application stage the applicant files a letter of commitment, usually the Commission's Form M surety verification, and the executed bond must be filed on or before the date the Commission sets for issuing the license.

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How to Apply for a Form F: Cannabis Integrated Facility Performance ($2,000,000) - Skyward Bond:

• Before filing the application, engage a surety rated at least A and obtain its signed and notarized Form M committing that the applicant qualifies for the $2,000,000 Integrated Facility Performance Bond.
• Have the legal entity name exactly as it appears on the AMCC application, plus ownership, financial statements and the business plan the surety will underwrite.
• File the Form M or other approved letter of commitment with the application and the $2,500 nonrefundable application fee.
• On award, pay the $50,000 annual license fee within 14 days of notice and arrange the executed Form F bond.
• File the fully executed Form F, with proof of the surety's A rating attached, with the Commission on or before the date it sets for license issuance.
• Keep the bond in force through every annual renewal. The bond runs until the license is withdrawn, not renewed or revoked.

Detailed Information About the Alabama Form F: Cannabis Integrated Facility Performance ($2,000,000) - Skyward Bond:

Two steps, not one

Most applicants assume the bond itself goes in with the application. It does not. Code of Ala. 20-2A-67 and Rule 538-X-9-.03 require the application to include a letter of commitment or other acknowledgement approved by the Commission showing the applicant can secure a performance bond of at least $2,000,000 from a surety acceptable to the Commission and rated at minimum A. The Commission's Form M, Surety Verification of Applicant Qualification for Integrated Facility Performance Bond, is the instrument a surety signs for that purpose. The executed Form F bond is then due on or before the date the Commission sets for issuance of the license, and the Commission must confirm the bond is in place before the license is issued.

What Form F guarantees

The bond names the State of Alabama, Alabama Medical Cannabis Commission, as obligee in the penal sum of $2,000,000. It is conditioned on the licensee complying with the Darren Wesley Ato Hall Compassion Act, Code of Ala. 20-2A-1 and following, and the Commission's rules at 538-X-9-.01 and following. Specifically it covers timely completion of facility construction, lawfully beginning and continuing operations, paying fees on time, keeping accurate records, meeting reporting requirements and cooperating with inspections, and complying with state tax law. The bond stays in force from its effective date until the license is withdrawn, terminates through voluntary or involuntary non renewal, or is revoked. The surety may cancel on 30 days written notice to the principal and the Commission.

The surety has to be A rated

The rule and the form both require a surety with at least an A rating, with proof of the rating attached to the bond. A bond from a lower rated carrier will not be accepted even at the right amount.

Fees and the rest of the financial package

Code of Ala. 20-2A-55 sets a nonrefundable application fee of $2,500, paid electronically. The AMCC application guide for integrated facility applicants states a $50,000 annual license fee due within 14 days of notice of award. Rule 538-X-9-.03 also requires proof of at least $250,000 in liquid assets available at the time the license is issued and proof of the financial ability to maintain operations for at least two years. None of these substitutes for the bond.

A very small market

Code of Ala. 20-2A-67 caps the Commission at five integrated facility licenses. An integrated facility may cultivate, process, transport and dispense medical cannabis, with up to five dispensing sites in different counties. Licenses are issued annually under 20-2A-56 and renewed through the process in the Commission's rules, so the bond must remain in force through each renewal.

Eligibility and Requirements for a Alabama Form F: Cannabis Integrated Facility Performance ($2,000,000) - Skyward Bond:

• Penal sum of exactly $2,000,000 on the Commission's Form F, Integrated Facility Performance Bond.
• Surety rated at least A, with proof of the rating attached to the bond.
• State of Alabama, Alabama Medical Cannabis Commission, named as obligee.
• Bond conditioned on compliance with Code of Ala. 20-2A-1 and following and Rules 538-X-9-.01 and following, including construction completion, lawful operation, fee payment, records, reporting, inspections and state taxes.
• Thirty days written notice to the principal and the Commission before the surety may cancel.
• Full underwriting of the applicant: ownership, personal and business financials, liquid assets and the operating plan, since a $2,000,000 cannabis performance bond is written on the strength of the business.

Alabama Form F: Cannabis Integrated Facility Performance ($2,000,000) - Skyward Bond FAQs:

Official and Additional Resources for the Alabama Form F: Cannabis Integrated Facility Performance ($2,000,000) - Skyward Bond: