North Dakota Compassion Center Bond
To register a North Dakota medical marijuana compassion center, you post a surety bond whose amount the Department of Health and Human Services (NDDoHHS) sets for you — up to $100,000 for a dispensary and up to $1,000,000 for a manufacturing facility. It is not a flat license bond you look up on a chart. Under N.D.C.C. 19-24.1-15, the bond secures public health, safety, and the environment if a center is abandoned, defaults, or can’t meet program requirements.
So the real question isn’t “what’s the amount” — it’s what the department assigned you, and what a cannabis-writing carrier will charge to back that number. Below: the two statutory ceilings, why this bond behaves like a cleanup guarantee, and how your premium is priced.
Price Your Compassion Center Bond
North Dakota N.D.C.C. 19-24.1-15 — dispensary & manufacturing
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Two facility types, two very different ceilings
North Dakota defines a “compassion center” as either a dispensary or a manufacturing facility — and 19-24.1-15 caps their bonds an order of magnitude apart. Your actual number lands somewhere at or below the ceiling for your type, chosen by NDDoHHS. These are maximums, not fixed amounts:
North Dakota compassion center bond — statutory ceilings by facility type
NDDoHHS sets the exact penal sum at or below each cap
Dispensary
Up to $100,000
Retail compassion center
- Department-set, capped at $100,000
- Retail dispensing footprint
- Separate registration certification fee also applies
Manufacturing Facility
Up to $1,000,000
Grow / processing center
- Department-set, capped at $1,000,000
- Cultivation, extraction, and waste risk drives the higher cap
- Ten times the dispensary ceiling
Caps per N.D.C.C. 19-24.1-15. The department determines the exact amount and acceptable evidence of the required financial assurance/security within these limits. Verify your assigned amount on your NDDoHHS eligibility notice.
If you operate as both — a vertically integrated center that grows, processes, and dispenses — the manufacturing ceiling governs. For how these caps stack up against other states’ cannabis bonds, see our cannabis surety bonds hub.
Official North Dakota Requirements
"A registered compassion center shall provide financial assurance or a performance bond or other security in an amount and form acceptable to the department to ensure the protection of the health and safety and the environment in the event of abandonment, default, or other inability or unwillingness to meet the requirements of this chapter. The amount may not exceed one hundred thousand dollars for a dispensary and may not exceed one million dollars for a manufacturing facility."North Dakota Century Code — Chapter 19-24.1 (Compassionate Care Act) • N.D.C.C. § 19-24.1-15 (administered by the ND Department of Health and Human Services, Medical Marijuana Program)
This is a cleanup guarantee wearing a license bond’s clothes
Most cannabis “license bonds” exist to guarantee tax remittance or basic license compliance. North Dakota’s is written differently. Read the triggering language in 19-24.1-15: the security exists to protect health, safety, and the environment in the event of abandonment, default, or inability to meet requirements. That is the vocabulary of a reclamation or performance bond, not a sales-tax bond.
What actually triggers a claim
- • Walking away from a licensed facility mid-operation (abandonment)
- • Leaving cultivation waste, solvents, or a contaminated site behind
- • Failing to meet chapter requirements the department must then remediate
- • Default on the obligations backed by the department’s registration
Why that matters to you
- • The bond is loss-backed: a paid claim is a debt you owe the surety
- • Underwriters look at site risk, not just credit — especially for grows
- • The indemnity agreement makes owners personally responsible for repayment
- • Run the facility cleanly and the bond simply renews — no claim, no repayment
This is the same principle behind environmental and reclamation sureties. If you want the broader mechanics of how a surety, a principal, and an obligee interact when the instrument is loss-backed, our license & permit bonds overview lays out the three-party structure.
Already have your NDDoHHS eligibility notice with a number on it? Send us the amount and facility type — we’ll match the exact penal sum.
Quote my bondYou don’t pay the penal sum — you pay a rate on it
A dispensary assigned a $100,000 bond doesn’t hand over $100,000 — it pays an annual premium that’s a percentage of that penal sum, driven by owner credit and file strength. Because cannabis is federally Schedule I, most national sureties decline the class, so the carriers that do write it price conservatively. These ranges are illustrative for a $100,000 dispensary bond; a manufacturing facility carrying a larger penal sum pays proportionally more:
North Dakota compassion center bond — illustrative annual premium on a $100,000 dispensary penal sum
Based on a $100,000 bond amount
- 720+ FICORate: 1% – 3%$1,000 – $3,000
- 680–719 FICORate: 3% – 5%$3,000 – $5,000
- 620–679 FICORate: 5% – 8%$5,000 – $8,000
- Under 620 FICORate: 8% – 15%$8,000 – $15,000+
Illustrative market ranges for a $100,000 dispensary penal sum — not an NDDoHHS-set rate. Your assigned penal sum, facility type (manufacturing runs higher), and site/environmental risk all move the number. Request a quote for your exact assigned amount.
Two operators with the identical department-assigned amount can pay very different premiums — the face amount is fixed by NDDoHHS, but the rate is underwritten. If your file is thin or your credit sits in the bottom band above, our bad-credit surety bond guide covers placement strategy for high-scrutiny classes like cannabis, and our surety bond cost guide explains how premium rates are built.
The order of operations most operators get wrong
The bond can’t be finalized until you know your assigned amount, but you shouldn’t wait until then to start. Here’s the sequence that keeps a registration deadline from slipping:
Get pre-qualified before your eligibility notice arrives
A cannabis-writing surety can underwrite the owners and entity in advance, so the bond is ready to issue the day NDDoHHS assigns your amount. This is the step that saves you when the notice comes with a tight window.
Read the assigned penal sum off your NDDoHHS notice
The department fixes the exact amount — at or below $100,000 (dispensary) or $1,000,000 (manufacturing). Your bond must be written for that exact figure. Do not guess or round.
Confirm the accepted form of security
19-24.1-15 allows "financial assurance or a performance bond or other security" in a form acceptable to the department. A surety bond is almost always the cheapest way to satisfy the penal sum versus posting cash or a letter of credit — but confirm the department accepts the surety form for your file.
Bind the bond for the exact amount and file it with your registration
The signed bond goes in with your compassion center registration or renewal packet to the Medical Marijuana Program. The entity name on the bond must match your registration exactly.
Keep it continuous and renew with your registration
The security must stay in force for as long as you hold the registration. A lapse in bonding puts your registration at risk, so track the renewal date against your license term.
Where to go next
What North Dakota compassion center operators ask
Who decides my exact bond amount — and can I lower it?
The North Dakota Department of Health and Human Services (NDDoHHS) sets it, not you and not your surety. N.D.C.C. 19-24.1-15 gives the department discretion to determine "the amount and acceptable evidence" of the required financial assurance, capped at $100,000 for a dispensary and $1,000,000 for a manufacturing facility. You cannot negotiate the penal sum down with your bond agency — the department fixes the number on your eligibility notice, and your bond has to match it exactly. What you can control is the premium you pay to carry that penal sum, which comes down to underwriting.
Why is the manufacturing cap ten times the dispensary cap?
Because the risk the bond secures is different. A dispensary’s footprint is retail — inventory, dispensing records, a storefront. A manufacturing facility grows and processes cannabis at scale, which means solvents, extraction equipment, plant waste, and a physical site that could need remediation if the operator walks away. The statute’s language — protection of "health and safety and the environment in the event of abandonment, default, or other inability or unwillingness to meet the requirements" — is why the manufacturing ceiling runs to $1,000,000. It is closer to a cleanup/reclamation guarantee than a simple license bond.
Is this the same as the registration certification fee I have to pay NDDoHHS?
No — they are two separate line items under 19-24.1-15 and operators constantly confuse them. The certification fee is a payment to the department (historically not to exceed $90,000 for a dispensary and $110,000 for a manufacturing facility). The security bond is a surety instrument that stays in force to back your obligations. Paying the certification fee does not satisfy the bond requirement, and posting the bond does not cover the fee. Budget for both.
Can I post cash or a letter of credit instead of a surety bond?
Possibly — the statute calls for "financial assurance or a performance bond or other security," and lets NDDoHHS decide what evidence is acceptable. That wording can allow alternatives like cash escrow or a letter of credit. But tying up $100,000 in cash, or asking your bank for a six-figure irrevocable letter of credit that counts against your borrowing capacity, is expensive. A surety bond lets you satisfy the same penal sum for a fraction of that amount in annual premium, which is why most compassion centers post a bond. Confirm the accepted forms with your program contact before you commit capital.
North Dakota is medical-only — does adult-use change this bond?
As of this writing, North Dakota operates a medical-only program under Chapter 19-24.1 (the Compassionate Care Act), and voters have declined adult-use legalization at the ballot more than once. The compassion center bond described here is a medical-program requirement. If North Dakota ever adopts an adult-use framework, it would come with its own statute and its own bonding rules — this page covers the medical compassion center bond that exists in law today.
I have not been approved yet. Should I wait to get the bond?
Get pre-qualified now, bind later. You cannot finalize the exact penal sum until NDDoHHS issues your eligibility notice with your assigned amount, but a cannabis-writing surety can underwrite you in advance so the bond issues the moment your number lands. Waiting until after the notice to start shopping carriers is how operators lose days on a deadline — the cannabis surety market is thin, and not every carrier writes the class.
All content is researched from official state and federal sources (.gov). BuySuretyBonds.com works with Treasury-listed surety carriers.
General information, not legal or underwriting advice. Cannabis remains a Schedule I controlled substance under federal law; the bond described here relates to North Dakota’s state medical marijuana compassion center program. The department sets your exact bond amount, and statutory ceilings, fees, and accepted forms of security can change with legislative amendment or NDDoHHS rulemaking — confirm current requirements with the North Dakota Department of Health and Human Services, Medical Marijuana Program, before filing, and request a quote for your specific facility type and assigned amount.
Match your department-set amount — dispensary or manufacturing
Tell us your facility type and the penal sum NDDoHHS assigned you. We work the carriers that actually write North Dakota cannabis risk, so you’re not burning your registration window on a decline.
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