Surety Bond Encyclopedia

Cannabis Cultivation License ($5,000) Bond - Statewide in California

Brief Summary

California sets one bond figure for every cultivator, from a specialty cottage grow to a large indoor canopy: at least $5,000 for each licensed premises, payable to the State of California on DCC Form 8113. Your canopy tier moves your license fee, not your bond. The bond runs continuously alongside the license, and a business holding several licenses can use one aggregated bond.

Every annual cannabis cultivation license from the Department of Cannabis Control requires proof of a surety bond of at least $5,000 payable to the State of California for each licensed premises, under 4 CCR section 15002. The bond must be written by a corporate surety licensed in California and filed on Form 8113. It exists to cover the state's costs of destroying cannabis if a violation makes destruction necessary, as Business and Professions Code section 26051.5(a) requires.

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How to Apply for a Cannabis Cultivation License ($5,000) Bond:

Count the licensed premises the bond must cover. The minimum is $5,000 for each one.
Have the legal business name and DCC license or application number exactly as they appear in CLS.
List the premises address for each cultivation site on the bond.
Complete the surety application, including the owner credit review, and accept the quote.
Receive the executed bond on DCC Form 8113, signed by the surety's attorney-in-fact and by your authorized representative.
Submit proof of the bond with the annual license application. For a later bond change, send Form 27, the bond and Form 8113 to licensechange@cannabis.ca.gov.

Detailed Information About the California Cannabis Cultivation License ($5,000) Bond:

Canopy size does not change the bond

DCC sorts cultivators by canopy: specialty cottage, specialty, small, medium and large, each in outdoor, indoor and mixed-light versions, plus nursery and processor licenses. A specialty cottage outdoor grow is capped at 25 mature plants or 2,500 square feet of canopy. A large indoor grow runs past 22,000 square feet. The bond is the same for all of them. Section 15002 of Title 4 of the California Code of Regulations requires proof of a surety bond of at least $5,000 payable to the State of California for each licensed premises.

What the bond pays for

Business and Professions Code section 26051.5(a) requires a bond to cover the costs of destruction of cannabis or cannabis products if a violation makes destruction necessary. Those costs include the department's administrative, investigatory and enforcement costs. The bond protects the state, not the grower.

Form, term and changes

The bond goes on DCC Form 8113, the Commercial Cannabis Licensee Bond. It begins when the license is issued and runs concurrently with the license period until the surety cancels it, which takes 30 days written notice to the department and to the licensee. An aggregated bond may be used when the same business holds multiple licenses. If the bond changes later, send Form 27, a copy of the new bond and Form 8113 to licensechange@cannabis.ca.gov.

Renewal

Cultivation licenses are handled in DCC's CLS licensing system. The renewal window opens 60 calendar days before the license expires, and the renewal and license fee must be submitted before the expiration date. Cultivators are exempt from the gross revenue documents other license types file at renewal, because cultivation fees are not calculated on revenue.

Eligibility and Requirements for a California Cannabis Cultivation License ($5,000) Bond:

Obligee: the State of California, with notices going to the Department of Cannabis Control.
Penal sum of at least $5,000 for each licensed premises under 4 CCR 15002.
Written by a corporate surety licensed to transact surety business in California.
DCC Form 8113, Commercial Cannabis Licensee Bond.
Continuous bond that runs with the license period. The surety must give 30 days written notice to cancel.

California Cannabis Cultivation License ($5,000) Bond FAQs:

We are moving from a small canopy license to a medium one. Do we need a bigger bond?

Not because of canopy. Section 15002 sets the bond at a minimum of $5,000 for each licensed premises, with no canopy tiers. Canopy size affects the license fee. If the change adds a new licensed premises, that premises needs coverage too.

We hold licenses at more than one site. Do we need a separate bond for each?

Not necessarily. Section 15002 allows an aggregated bond when the same business holds multiple licenses. The floor is still $5,000 for each licensed premises, so ask DCC how the penal sum on an aggregated bond should read before the surety issues it.

What can the state collect from this bond?

The costs of destroying cannabis or cannabis products when a violation makes destruction necessary, including DCC's administrative, investigatory and enforcement costs. The surety's total liability never exceeds the penal sum on the bond.

How long does the bond stay in force?

Form 8113 makes it run concurrently with the license period starting when you receive the license. It stays in force until the surety cancels, and cancellation requires 30 days written notice to DCC and to you.

How is the premium decided?

The surety sets an annual premium after reviewing the owners' credit and the business. The $5,000 penal sum is the most the surety will pay on claims, not the price of the bond.