Oklahoma Medical Marijuana Grower License Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain an Oklahoma Medical Marijuana Grower License bond.

At a Glance:

• Lowest Cost: $1,000 per year or $100 per month
• Bond Amount: $50,000
• Who Needs It: Medical marijuana commercial growers operating in Oklahoma
• Purpose: To protect the public from financial harm if the commercial grower commits fraud, fails to pay all taxes and fees, or engages in unethical business practices
• Who Regulates Commercial Growers in Oklahoma: The Oklahoma Medical Marijuana Authority
  

Background

Oklahoma Statute 422 requires all medical marijuana commercial growers operating in the state to obtain a license from the Medical Marijuana Authority. The Oklahoma legislature enacted the licensing requirement to ensure that commercial growers do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, Oklahoma SB913 requires commercial growers to purchase and maintain a $50,000 surety bond to be eligible for licensure.

Commercial growers that have owned the permitted land where the commercial growing business operates for at least five years before applying for licensure are exempt from the bond requirement.

What Is the Purpose of the Oklahoma Medical Marijuana Grower License Bond?

Oklahoma requires medical marijuana commercial growers to purchase a surety bond as part of the application process to obtain a license. The bond ensures that the public will receive compensation for financial harm if the commercial grower fails to abide by the regulations outlined in SB913. Specifically, the bond protects the public if the commercial grower commits fraud, fails to pay all taxes and fees, or engages in unethical business practices.

For example, if the commercial grower fails to pay their state taxes on time and in full, the state of Oklahoma can file a claim against the grower’s bond to recoup their losses. In short, the bond is a type of insurance that protects the public if the commercial grower violates the terms of their license.

How Can an Insurance Agent Obtain an Oklahoma Medical Marijuana Grower Surety Bond?

BondExchange makes obtaining an Oklahoma Medical Marijuana Grower bond easy. Simply log in to your account and use our keyword search to find the “grower” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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Can the Bond Amount Be Adjusted?

Yes, Oklahoma SB913 dictates that the Medical Marijuana Authority or the Department of Environmental Quality may, on a case-by-case basis, increase the required bond amount based on the reclamation requirements of an approved license application. The increased bond amount must reflect the probable difficulty of reclamation and must be in an amount sufficient to ensure the completion of the reclamation plan by the Authority or Department if the grower’s license is revoked.

Is a Credit Check Required for the Oklahoma Medical Marijuana Grower License Bond?

Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Oklahoma Medical Marijuana Grower License bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.

How Much Does the Oklahoma Medical Marijuana Grower License Bond Cost?

The Oklahoma Medical Marijuana Grower License bond can cost anywhere between $1,000 to $5,000 per year or $100 to $500 per month. Insurance companies determine the rate based on a number of factors, including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $50,000 bond requirement.

$50,000 Medical Marijuana Grower License Bond Cost

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who Is Required to Purchase the Oklahoma Medical Marijuana Grower License Bond?

Oklahoma requires medical marijuana commercial growers to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Oklahoma Statute 427.2, a commercial grower is a business that cultivates, prepares, and packages medical marijuana. Commercial growers are also able to transport medical marijuana to approved entities and may sell seeds, flowers, and clones to other licensed commercial growers.

Commercial growers that have owned the permitted land where the commercial growing business operates for at least five years before applying for licensure are exempt from the bond requirement.

BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.

How Do Commercial Growers Become Licensed in Oklahoma?

Commercial growers in Oklahoma must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the state’s licensing page for details on the process.

License Period – The Oklahoma Medical Marijuana Commercial Growers License is valid for one year from the date of issuance and must be renewed before the expiration date

Step 1 – Meet the Perquisites

To be eligible for licensure as a medical marijuana commercial grower, applicants must be:

• • At least 25 years old
  • An Oklahoma resident if an individual applicant and have all members, managers, and board members be Oklahoma residents if applying as a business entity

Additionally, Oklahoma residents must own at least 75% of all commercial growing businesses.

Step 2 – Pass a Background Check

Oklahoma requires commercial growers to undergo a background check before applying for licensure. Growers can request a background check either online or by paper and can find instructions on how to do so here.

Step 3 – Purchase a Surety Bond

Commercial growers must purchase and maintain a $50,000 surety bond.

Step 4 – Complete the Application

Commercial growers can apply for licensure online here. Growers must create an account with the Medical Marijuana Authority’s licensing portal and can find instructions on how to do so here.

Growers must complete the application in its entirety and submit the following items:

• • $2,500 application fee (plus a $58.30 credit card processing fee if applicable)
  • Affidavit of Lawful Presence Form
  • Attestation that the grower’s business is not within 1,000 of a school
  • Proof of Oklahoma residency for all members, managers, and board members
  • Proof that at least 75% of the company is owned by Oklahoma residents
  • Background check report for each owner
  • Identification for each person of interest
  • Certificate of Compliance
  • Certificate of Good Standing (unless a sole proprietorship or partnership

How Do Medical Marijuana Commercial Growers in Oklahoma Renew Their Licenses?

Commercial growers can submit their completed renewal applications online here. The Oklahoma Medical Marijuana Commercial Growers License is valid for one year from the date of issuance and must be renewed before the expiration date.

What Are the Insurance Requirements for Medical Marijuana Commercial Growers in Oklahoma?

Oklahoma does not require medical marijuana commercial growers to purchase any form of liability insurance as a prerequisite to obtaining a license. Commercial growers must purchase and maintain a $50,000 surety bond.

How Do Oklahoma Medical Marijuana Commercial Growers File Their Bonds?

Medical marijuana commercial growers in Oklahoma should mail their completed bond forms, including the power of attorney, to the Medical Marijuana Authority at the following address:

Oklahoma Medical Marijuana Authority
PO Box 262266
Oklahoma City, OK 73126-2266

The surety bond requires signatures, including witness signatures, from the surety company and from a representative of the commercial grower. The surety company should include the following information on the bond form:

• Legal name and address of the entity/individual buying the bond
• Surety company’s name and address
• Date the bond goes into effect
• Date the bond expires

What Can Oklahoma Medical Marijuana Commercial Growers Do to Avoid Claims Made Against Their Bonds?

To avoid claims against their bonds, medical marijuana commercial growers in Oklahoma must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

• Do not commit fraud
• Pay all required taxes and fees
• Do not engage in unethical business practices

What Other Insurance Products Can Agents Offer Medical Marijuana Commercial Growers in Oklahoma?

Most reputable medical marijuana commercial growers will purchase business liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Oklahoma Medical Marijuana Commercial Growers?

Oklahoma conveniently provides the public with a list of active medical marijuana commercial growers in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.