California green lights surety bond program for state’s cannabis industry

California has approved its first insurer to provide surety bonds for marijuana businesses in the state.

According to the Insurance Journal, Mayfield, Ohio-based Continental Heritage Insurance Co. has passed muster with the California Insurance Commission.

Here’s what you need to know:

• Surety bonds are required for California applicants seeking licenses in most sectors of the cannabis industry.
• Most of the state’s licensed cannabis businesses are required to have a $5,000 surety bond.
• Marijuana surety bonds are often required by states with legal cannabis programs.
• Continental Heritage also provides surety bonds to Ohio’s medical marijuana companies.
• According to Surety Bond Authority, a marijuana surety bond is an agreement between obligee, principal and surety. In this case, the obligee is the state agency or city regulation department requiring the bond; the principal is the marijuana business seeking the bond; and the surety is the bond underwriter/provider backing the business to the state or city regulator.