Entrepreneurs applying for medical marijuana business licenses in Ohio – but worried about having the financial cushion required by state law – can tap a source that’s typically not considered a go-to business resource for MJ firms: an insurance company.
Ohio’s medical cannabis law requires applicants to demonstrate their financial stability by showing escrow account balances of $750,000 for a Category 1 Cultivation license and $75,000 for a Category 2 cultivation license. In lieu of capital, companies also may post a surety bond issued by an authorized insurance company.
At least a couple of insurance companies have looked into the possibility of helping aspiring marijuana businesses, said Thomas Haren, an attorney with Seeley, Savidge, Ebert & Gourash in Westlake, Ohio.
Continental Heritage Insurance Company in Mayfield, Ohio, for example, issued a news release announcing its readiness to provide surety bonds to marijuana businesses.
“We have been monitoring the marijuana industry and are eager to help Ohio applicants that qualify as financially stable cultivators of medical marijuana,” said Continental director Edward Feighan.
At least a few other states allow applicants for marijuana licenses to provide surety bonds as a way to show collateral.
Ohio’s MMJ program, which the governor signed into law in June 2016, is expected to be up and running by late 2018.