Arizona Marijuana Bond
Arizona businesses involved in the Marijuana industry - as growers, distributors, sellers, or in some other capacity - may need a surety bond to operate legally. This quick guide covers the important details.
What is an Arizona Marijuana Bond?
Also known as an Arizona medical marijuana bond, this type of surety bond holds the bonded party (the marijuana business) financially accountable for breaking state laws. Surety bonds also give another party a way to pursue financial compensation if they feel they're been wronged by a business that holds an Arizona Marijuana Bond.
How does an Arizona Marijuana Surety Bond work?
Numerous laws apply to Arizona marijuana businesses. If a business violates one of these laws, the party that was wronged, whether that be an individual or a state regulatory agency, may file a claim against the surety bond seeking financial compensation equal to the damages caused. As long as the content of the claim holds up after an investigation, the surety agency that issues and backs the bond agrees to automatically settle it in full. Despite guaranteeing payment, however, the surety agency does not accept the final financial responsibility. The marijuana business that holds the bond must always pay the surety agency back the full amount of any settled claim, plus interest and fees.
Who needs an Arizona Marijuana Surety Bond?
Marijuana laws are still evolving in Arizona - Recreational use was only passed in 2020. As such, which businesses need surety bonds and under what circumstances are still being decided. However, when a business does require an Arizona Marijuana Bond, it will be required as part of the licensure process, and the requirement should be apparent. Rely on a trusted surety agency like Viking Bond Service to help you determine if, when, and what kind of surety bond your business needs.
Why is it necessary to have an Arizona Marijuana Bond?
Surety bonds like this one help to discourage illegal behavior, hold businesses accountable for violations,and regulate the marijuana industry as a whole. Since a bonded business can't escape its financial responsibility to settle claims, it has a strong incentive to follow applicable laws and prevent claims. Expect bond requirements to become common as state marijuana laws continue to evolve.
Who are the parties involved in an Arizona Marijuana Bond?
Each bond contract involved three parties:
- Principal - The business required by law to obtain a surety bond and required under the surety bond contract to pay the surety for any claims it settles.
- Obligee - The Arizona regulatory agency that requires a business to have a surety bond. The obligee also has the right to file claims seeking damages.
- Surety - The surety agency that issues the Arizona Medical Marijuana Bond and agrees to settle claims on behalf of the principal, who must always pay that debt back.
How much does an Arizona Marijuana Bond cost?
Costs vary depending on the size of the bond. The obligee, the party that creates the bond requirement, decides how large the bond must be. The surety agency, the party that issues and backs the bond, decides how much the premium costs. Typically, it's a small percentage of the bond amount. The exact cost depends on the bond seeker's (the principal's) credit score and financial history. Bad credit will mean paying a higher premium, but it doesn't have to mean being denied for a bond when you work with Viking Bond Service.
How to apply for an Arizona Medical Marijuana Bond
You will need to fill out a standard bond application with information about your business, background, and any partners you have. You will also need to submit to a credit check, supply a copy of the bond requirements, and turn over any other documents the surety agency asks for. You will then receive a quote for the premium. Pay the quote to activate the bond, concluding in the surety agency giving you a document proving you have the required surety bond.
Viking Bond Service for Arizona Marijuana Bonds
As a nationwide surety agency equipped to issue all types of Arizona marijuana bonds, in any amount, we make it easy to meet your surety bond requirements - the first time and every time you need to renew. If you have questions or want more information about anything, reach out to our top-notch team. Or, if you're ready to get a bond quote in as little as 24 hours, complete our online bond application at any time or call us at 1-888-278-7389.
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