By / April 19, 2023

Cannabis Clubs in Malta Hindered by Regulations

While regulations for Maltese Cannabis Clubs were announced last month, Maltese authorities are accused of treating cannabis like plutonium, risking delaying their arrival.

According to local reports gathered by Business of Cannabis (BoC), the rules for cannabis in Malta are too restrictive: overly restrictive testing policy, waste disposal and handling requirements, bureaucratic registration mechanisms, and potential fines of up to 10,000 euros.

Those wishing to set up a cannabis-related harm reduction association on the Mediterranean island will also have to find several hundred thousand euros to do so.

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A Cost of up to 1 Million Euros

An island-based cannabis businessman told BoC, “The new rules for recreational use mean that you’ll have to invest at least €500,000 or even €1 million to get cannabis clubs off the ground.”

“I know some pretty wealthy people who were going to buy properties to start cannabis clubs, but after reading the rules and restrictions, I think it’s ridiculous.”

“Everything from the safety of transporting product, to separate sites for storage and distribution, to only having 500 grams at a time in the Club.”

“They [CURA, the Maltese cannabis regulator] have made it really difficult to do it without a lot of capital. A lot of people who want to do it don’t have the money. And those who do have the money say they won’t get their money back for a long time.”

“CURA has shot itself in the foot. The barriers to entry are too high.”

Because of the strict rules, the selling price of cannabis grown by the association could reach 15 euros per gram, compared to 12 euros on the medical market and 8 euros on the illegal market.

No Applications Received from Cannabis Clubs

In December 2021, Maltese President George Vella signed the law allowing adults to possess up to 7 grams, grow four plants at home, and source cannabis from regulated cannabis clubs.

A few weeks later, he created the CURA to develop a detailed plan for implementing these proposals.

These were published in late February of this year, and those interested in starting a Club were invited to apply for licenses. No applications have been received to date, according to BoC.

The rules have been criticized from all sides. For example, there are reportedly only two testing machines on the island, which must record levels of at least nine cannabinoids according to the regulations imposed on the clubs.

One observer told Lovin Malta: “We have been asked to test our cannabis at ten times the level of medical cannabis… if an NPO (non-profit organization) has eight strains, and the test costs an extra 2,500 euros, that’s thousands and thousands of dollars every month just to test the quality.

Rules Are too Restrictive for Cannabis Clubs

Transportation and disposal are also a problem, as the rules are as strict as those for transporting fuel, gas, and fireworks.

Cannabis Clubs can range in size from 50 to 500 members. The annual registration fee is 1,500 euros for the smallest and 26,000 euros for the largest.

Cannabis Clubs will be required to contribute 5% of their annual revenue to a harm reduction fund and 10% of their combined revenue to a community project fund, both managed by the CURA.

Those selling cannabis to non-members or minors will be fined up to 10,000 euros. Regardless of size, all associations must keep detailed records of each cannabis cultivation cycle and submit a quarterly report to the CURA detailing the number of members, cannabis sold, and cash flow.

Associations must also maintain a membership registry that includes all personal data.

Association founders must have lived in Malta for at least five years to establish an association, and anyone convicted of serious crimes or drug-related offenses in the last ten years cannot establish an association or work for an association.

CURA inspectors will conduct inspections or audits of sites, and violators will face a range of penalties, including warnings, specific stop orders, fines, and even license revocation.

Cannabis Treated Like Plutonium

Fines range from €1,000 – for failing to submit a quarterly report or maintain an adequate membership list – to €10,000 for more serious offenses, such as selling unlabeled or improperly packaged cannabis.

ReLeaf Malta, an NGO that has been at the forefront of cannabis regulation in the country, believes the new regulations will exclude the local cannabis community.

Andrew Bonello, president of ReLeaf Malta, told BoC, “As far as I know, there have been no applications so far.”

“These guidelines are not what the cannabis community would have liked. There is way too much red tape […], and the grassroots community is excluded from the process.”

“Permits are required for many things, including transportation from the grow to the association and waste disposal. It seems like they’re treating cannabis like plutonium… it’s totally overkill.”

Cannabis Clubs Can’t Compete With Black Market

“All of these guidelines are what the illicit market doesn’t have, so how is the regulated market price going to match the illicit market? It seems that the targets will be very difficult to achieve.”

He said that ReLeaf Malta had been pushing for a grassroots community approach where members come together to support the organization on a non-profit basis, which would not require outside investment.

He estimated that the minimum cost of the proposed scheme would be well over €100,000, which is out of reach for these grassroots organizations.

However, he added that this could very well open the door to those with compliance teams in existing businesses such as entertainment or other psychoactive businesses such as alcohol or tobacco.”

(Featured image by Pavel Danilyuk via Pexels)

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