California Requirements:  Licensing Bonds for Cannabis Businesses

The Bureau of Cannabis Control has indicated through the California Code of Regulations a bond will be needed as part of the annual license application requirements under Section 5002.   This means retailers, cultivators, manufacturers, distributors, laboratory testing, and microbusinesses will need to buy a bond. 

Section 5008 (Bond) of the code states:

A bond is a type of insurance product with features of a loan.  The face amount of the bond is paid to the party requesting their interests be protected based on certain conditions.   In this situation, the State of Caifornia.  Bonds are priced based on credit history, net worth, and business experience with the premium is paid annually. 

Demand is likely to be strong for finding the right type of bond.  Therefore, applicants are encouraged to begin the process early.

For more information, please visit Californiamarijuanabond.com

PR17:59
Nov. 7, 2017
Contact: Marc Lifsher
news@sto.ca.gov
916-653-2995
 
SACRAMENTO – State Treasurer John Chiang today released a report outlining steps California can take to address the lack of banking services that force much of the cannabis industry to operate in cash.

“It is unfair and a public safety risk to require a legal industry to haul duffle bags of cash to pay taxes, employees and utility bills,” said Chiang. “The reliance on cash paints a target on the back of cannabis operators and makes them and the general public vulnerable to violence and organized crime.”

The Treasurer’s report comes two months before California begins a new era by legalizing the commercial sale of recreational cannabis on January 1, 2018. Voters overwhelmingly sanctioned this new industry in 2016 when they passed Proposition 64.

Legalizing adult-use cannabis is projected to generate annual sales exceeding $7 billion and an estimated $1 billion a year in tax revenues.

The findings in the detailed study released Tuesday were distilled from six public hearings of the Treasurer’s 18-person Cannabis Banking Working Group, whose members included representatives from local and stat...more

Golden Bear Insurance Co. will likely take a Big Bite out of Existing Non-Admitted Insurance Markets

Well, it finally happened with Golden Bear Insurance Company was approved by the California Department of insurance to offer coverage through an admitted insurance program for marijuana companies. This is a really big deal for those of us who specialize in marijuana insurance because historically, this line of insurance was offered only from "non-admitted carriers" specializing in "high" risk.    This will be a bigger deal to the marijuana industry as they begin to benefit from either better pricing, coverage availability, and friendlier claims practices. 

The primary difference between admitted versus non-admitted carriers is admitted are approved by the Department of Insurance through what is known as a rate filing.  This means their policy forms, underwriting, and pricing are reviewed by a regulatory agency before approved  and offered to the public.  The non-admitted insurance market avoids this approval process leaving the cannabis business with fewer options.       

According to our sources, Golden Be...more

The Golden State Could Be a Game Changer for the Marijuana Insurance Industry
©2017 Greenpoint Insurance Advisors, LLC

Breaking news out of California when The Californian reported California Insurance Commissioner Dave Jones wants admitted insurance carriers to insure marijuana.  This will not be an easy task for Commissioner Jones considering the fact Lloyds of London does not offer insurance to the marijuana industry. 

For those who may not know, admitted insurance carriers are well known companies approved and  subjected to regulation by the state in which they operate.   Admitted insurance carriers are typically companies like Travelers, Hartford, Farmers, and State Farm to name just a few.   Historically, these companies have no interest in insuring marijuana. 


Currently, the cannabis insurance industry purchases insurance through the non-admitted insurance markets.  There is less competition, more stringent underwriting, and limited coverage offerings.  For example, product liability and directors and officers insurance is extremely difficult to procure.  The few insurance carriers offering the coverage ...more