Florida Medical Marijuana Performance Bond
The $5 Million MMTC Bond Required by Florida
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Why Do I Need a Florida Low-THC / Medical Marijuana Performance Bond?
Every Medical Marijuana Treatment Center (MMTC) approved by the Florida Department of Health must post a $5,000,000 performance bond as a condition of its license to cultivate, process, transport, and dispense low-THC and medical marijuana. The bond is required under Florida Statute § 381.986(8)(b)7. and guarantees that the MMTC complies with state law, pays fines owed to the Department, and performs according to the Compassionate Medical Cannabis Act.
The bond must be posted within 10 business days after the MMTC is notified of its license approval. It must be issued by a surety company authorized in Florida and rated in one of the three highest categories by a nationally recognized rating service (e.g., AM Best). As an alternative to a surety bond, an MMTC may instead post an irrevocable letter of credit payable to the Department, or cash, in the same amount.
Underwritten Bond Solutions for Florida MMTCs
Because of the size and risk of this obligation, the Florida Medical Marijuana Performance Bond requires a full application and underwriting review. BondAbility works with the limited number of surety markets active in the cannabis space to secure terms for qualified applicants. Approval and premium are based primarily on the financial strength of the MMTC and its owners, including corporate and personal net worth, liquidity, and operating history.
FL Medical Marijuana Bond Pricing
| Bond Amount | Term | Starting Premium | Application & Credit Check Required |
|---|---|---|---|
| $5,000,000 | 2 Years (concurrent with license) | Custom quote — underwritten | Yes |
| $2,000,000 (reduced) | 2 Years (concurrent with license) | Custom quote — underwritten | Yes |
About Florida Medical Marijuana Treatment Centers
In Florida, only licensed Medical Marijuana Treatment Centers (MMTCs) — commonly known as dispensaries — are authorized to acquire, cultivate, possess, process, transfer, transport, sell, distribute, dispense, or administer marijuana and low-THC cannabis to qualified patients and their caregivers. The program is overseen by the Office of Medical Marijuana Use (OMMU), a division of the Florida Department of Health.
MMTCs operate as vertically integrated businesses, meaning a single license covers cultivation through retail dispensing. The performance bond applies at the MMTC (license) level — it is not required separately for each individual dispensing location.
Bond Details at a Glance
- Bond Amount: $5,000,000 (reducible to $2,000,000 after serving 1,000+ qualified patients, with DOH approval)
- Term: 2 Years, running concurrently with the MMTC license
- Premium: Custom quote based on underwriting
- Application & Credit Check: Required (financials and personal guarantees typically needed)
- Obligee: Florida Department of Health, Office of Medical Marijuana Use (OMMU)
- Authorizing Statute: Florida Statute § 381.986(8)(b)7.
- Posting Deadline: Within 10 business days of license approval notification
How to Become a Licensed Florida MMTC
Becoming a licensed Medical Marijuana Treatment Center in Florida is a competitive, application-based process administered by the Office of Medical Marijuana Use. Applicants must demonstrate the financial, technical, and operational ability to cultivate, process, and dispense marijuana statewide, along with required ownership, management, and infrastructure disclosures.
Once an applicant is approved, the Department notifies the MMTC, which then has 10 business days to post the $5,000,000 performance bond, naming the Florida Department of Health as obligee. The bond must remain active and continuous for the life of the license, with renewals filed before each two-year term expires to avoid any lapse in coverage.
Frequently Asked Questions
What is the bond used for?
The Department may collect on the bond to recover damages tied to a license revocation or suspension and to cover fines imposed by the Department that remain unpaid for 30 days. It guarantees the MMTC performs according to the Compassionate Medical Cannabis Act and applicable rules.
How much does the bond cost?
Premium varies by applicant. Because this is a high-limit, underwritten bond, rates depend on the MMTC's corporate and personal financials, liquidity, and experience. Well-capitalized applicants with strong financials may qualify for rates as low as 1% of the bond amount. Contact us for a custom quote.
Can the bond amount be reduced?
Yes. Once an MMTC serves at least 1,000 qualified patients, it may apply to the Florida Department of Health to reduce the required bond from $5,000,000 to $2,000,000. The DOH verifies the patient count using the Medical Marijuana Use Registry.
Is an application and credit check required?
Yes. Unlike small license bonds, this performance bond requires a complete application, business and personal financial statements, and often personal guarantees from owners.
How long is the bond term?
The bond runs concurrently with the MMTC license, which is valid for two years, and must be renewed before expiration without any lapse in coverage.