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Expert Surety Bonds Since 2004
Need assistance? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Expert Surety Bonds Since 2004
Two things to settle before you buy. Oklahoma has not been issuing new commercial grower licences since August 26, 2022, and OMMA lists that moratorium as running through August 1, 2028, so unless you are renewing an existing licence there may be nothing to bond yet. And if you have owned the licensed premises for at least five years, you can file an attestation of land ownership instead of a bond and pay nothing at all. Check both before you spend a dollar.
Oklahoma requires every commercial medical marijuana grower applicant and licensee to file either a surety bond covering the permit area or documentation showing the licensee owned that land for at least five years before the application. The rule is OAC 442:10-5-3.3, added by Senate Bill 913 and effective April 20, 2023. The minimum is $50,000 for each licence sought or held, and the Authority may require more where reclamation would cost more. The surety must hold a Certificate of Authority, licence or other formal authorisation from the Oklahoma Insurance Department. This is a reclamation instrument, not a consumer protection bond.
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OMMA states that a moratorium began August 26, 2022 for new dispensary, grower and processor licences, and that it runs through August 1, 2028 unless the Executive Director determines all pending licensing reviews, inspections or investigations are complete.
Existing licensees can still renew. New entrants generally cannot get in. So if you are shopping for this bond as part of a plan to start growing in Oklahoma, the bond is not your first problem. Confirm with OMMA that a licence is available to you before you buy anything.
This is the part almost every page on the subject leaves out, and for some growers it removes the cost entirely.
OAC 442:10-5-3.3 gives a commercial grower a choice. File a bond covering the permit area on which the licensee will initiate and conduct commercial growing operations, or file documentation proving the licensee owned that land for at least five years before submitting the application. OMMA publishes an Attestation of Land Ownership Form for the second route and says supporting documents can include property deeds, court orders or conveyances.
If you have held the ground five years, that is a filing rather than a purchase. Worth checking your deed date before you get a quote.
The old framing of this bond as a guarantee that a grower follows cultivation and distribution law is wrong, and the difference matters when a claim comes.
The rule ties the amount to reclamation. It sets a minimum of $50,000 for each licence sought or held, then says the Authority may increase that amount based on what reclamation would cost, naming removing equipment, destruction of waste, remediation of environmental hazards and restoration of the property.
So the state is not securing your customers. It is securing itself against being left with a contaminated or abandoned grow site. A large outdoor operation on land that would be expensive to clean up is exactly the file where OMMA can ask for more than the floor.
Read that phrase carefully: each licence sought or held. An operator running more than one licensed grow is looking at the requirement per licence, not once across the business.
And $50,000 is the floor rather than the figure. There is no published tier table for the bond itself. The Authority sets any increase from the reclamation exposure at your site, so the honest answer to what your bond will be is that the floor is $50,000 and OMMA tells you if your site warrants more.
Most programmes that add a bond exempt the people already operating. This one did not.
OMMA states the requirement applies to all grower licence applications submitted after April 20, 2023 and to growers already licensed as of that date. If you have held a grower licence since before Senate Bill 913 took effect, you were brought in with everyone else. The only way out is the five year ownership attestation.
OAC 442:10-5-3.3 requires a surety company qualified to do business in the State of Oklahoma, and it defines that as holding a Certificate of Authority, licence, or other formal authorisation from the Oklahoma Insurance Department.
That is worth confirming before you pay a premium rather than after OMMA sends the filing back.
Three timing rules sit in the rule and they do not forgive much.
Renewal has to happen prior to thirty days before the expiration date, and the new bond documentation must reach the Authority before the previous bond expires. A surety cancelling gives the Authority written notice thirty days before the cancellation date, and you have to get replacement documentation in before that cancellation takes effect. Failing either one exposes you to disciplinary action that the rule says includes revocation, nonrenewal or monetary penalties.
One more that surprises people: the Authority may recall the bond up to one year after the licence is revoked or surrendered. Handing back the licence does not close the file.
Do not confuse the bond with the application fee. OMMA prices the grower licence by canopy size and it climbs steeply.
Indoor, greenhouse or light deprivation runs $2,500 up to 10,000 square feet, $5,000 for 10,001 to 20,000, $10,000 for 20,001 to 40,000, $20,000 for 40,001 to 60,000, $30,000 for 60,001 to 80,000, $40,000 for 80,001 to 99,999, and $50,000 plus 25 cents per additional square foot at 100,000 and above.
Outdoor runs $2,500 up to 2.5 acres, then $5,000, $10,000, $20,000, $30,000 and $40,000 as you step up through 5, 10, 20, 30 and 40 acres, $50,000 from 40 to 50 acres, and $50,000 plus $250 per additional acre above 50. Card processing fees apply on top. Licences are valid for one year.
Probably not. OMMA states that a moratorium began August 26, 2022 for new dispensary, grower and processor licences, and that it runs through August 1, 2028 unless the Executive Director determines all pending licensing reviews, inspections or investigations are complete. Existing licensees can still renew. Confirm your situation with OMMA before buying a bond for an application you cannot submit.
Yes, one. OAC 442:10-5-3.3 lets a grower file documentation proving the licensee owned the permit area for at least five years before submitting the application, instead of a bond. OMMA publishes an Attestation of Land Ownership Form for it and says supporting documents can include property deeds, court orders or conveyances. If you have held the land five years, check that route first.
That is the minimum, not the price. The rule sets a minimum of $50,000 for each licence sought or held, and lets the Authority increase it based on what reclamation would cost, specifically removing equipment, destroying waste, remediating environmental hazards and restoring the property. There is no published tier table. A larger or dirtier site can be asked for more.
The rule says each licence sought or held, so the requirement attaches per licence rather than once across the business. Confirm the mechanics with OMMA for your specific set of licences, but do not budget on the assumption that one bond covers all of them.
No. That is unusual and it is worth knowing. OMMA states the requirement applies to all grower licence applications submitted after April 20, 2023 and to growers who were already licensed as of that date. Senate Bill 913 brought existing licensees in rather than exempting them. The five year land ownership attestation is the only alternative available to you.
Reclamation of the site, not your customers. The rule ties the amount to the cost of removing equipment, destruction of waste, remediation of environmental hazards and restoration of the property. It exists so the state is not left holding an abandoned or contaminated grow. It is not a warranty on your product and it is not consumer protection.
You pay a premium rather than the $50,000, and this class does not have a rate card. Sureties underwrite a reclamation exposure on a cannabis operation carefully, so business financials, the size and nature of the site and ownership credit all drive it, and the market for cannabis related surety is narrower than for ordinary licence bonds. Quoting a percentage here would tell you nothing about your own file. Get a real number against your actual amount.
Prior to thirty days before the expiration date, with the new documentation reaching the Authority before the previous bond expires. If your surety cancels instead, it gives the Authority thirty days written notice and you must file replacement documentation before the cancellation date. The rule attaches disciplinary action to failure, including revocation, nonrenewal or monetary penalties.
Not immediately. The rule says the Authority may recall the bond up to one year after revocation or surrender of the licence. Plan for that window rather than assuming the obligation ends the day you hand the licence back.
No, and the coincidence trips people up. OMMA prices the grower licence by canopy size, and $50,000 happens to be the top indoor tier at 100,000 square feet and above, plus 25 cents for each additional square foot. The bond minimum is a separate $50,000 for each licence. A large indoor grower pays a large application fee and posts the bond as well.
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