Malta has legalised recreational cannabis for personal use. This law allows the formation of cannabis clubs (or cannabis associations) in Malta. These associations will be monitored by the newly formed regulatory authority being the Authority for the Responsible Use of Cannabis (ARUC). Such associations which will be non-profit organisations, will have as their aim the cultivation of cannabis to be distributed among its members. Applications for licensing will be open as of 28th February 2023.
Following the Convention entitled “Setting the Standards” held on the 27th of January 2023, the ARUC has published the following preliminary information on the registration and licensing of cannabis clubs which shall be regulated by ad hoc regulations and supplementary binding instruments which shall be published in February 2023.
- Associations (or clubs) will be known as Cannabis Harm Reduction Associations and will be registered with and licensed by the ARUC.
- Associations will be non-profit making, and their sole purpose will be to cultivate and distribute cannabis for their adult members only. This essentially means that all revenue must be reinvested in the organisation or go towards salaries. Associations will also contribute a portion of their sales to a harm reduction fund.
- ARUC is the regulator of the associations and will monitor compliance with the entire process from seed to distribution.
- Authorised associations will be able to cultivate cannabis plants for the benefit of their members only, and they will be able to distribute them to their members dried cannabis flowers only. ARUC may also consent the associations to distribute prescribed goods, but the distribution of cannabis in another form is strictly prohibited.
- The associations will carry out the entire process from seed to distribution. They may not procure or transfer cannabis plants, dried cannabis, or finished or semi-finished products to or from other individuals, associations or entities.
- Organisations will be established as an association of persons by at least two individuals.
- Applications will be governed by a Board of Administration of at least three individuals.
The Board of Administration will be required to appoint and engage the following designated persons who must be registered by ARUC and may be selected from among the board members:
- An individual responsible for the growing site;
- An individual responsible for security;
- An individual responsible for the distribution of cannabis to the members;
- An individual responsible for quality control; and
- An individual responsible for quality assurance who will be required to perform product testing.
ARUC may, at its discretion, allow an individual to occupy multiple roles; however, the individual responsible for quality control shall always be different from the key officer and the grower. The individual responsible for quality assurance shall be a person who is independent of the association and who shall carry out product testing.
- All association members must be residents in Malta and over 18 years of age.
- Founding members, administrators, and key officer must be fit and proper persons who have resided in Malta for a minimum of five years prior to their appointment.
- The designated persons and any other association employee shall be registered with ARUC and must be residents of Malta.
- Associations must submit projections of the operations for the first three years together with their application.
- Financial reports will be submitted regularly, as the ARUC stipulates. Furthermore, audited accounts are to be submitted on a yearly basis.
- Associations will be subject to rigorous prevention of money laundering procedures.
- Salaries, remuneration for services, fees and expenses must not be higher than market rates for similar roles and services and costs must not be inflated
- Founding members, administrators, designated persons and employees must attend training on harm reduction measures.
- Associations must adopt harm reduction mechanisms to promote impartial safe use according to one’s age, health and well-being.
- All means of advertising or promotion, including digital media are strictly prohibited.
Associations will be required to pay an application fee of €1,000 as well as a yearly licence fee which is based on the number of members. Associations will also be required to pay harm reduction contributions.
About the Author
This article has been authored by Dr Simon Mangion, Regulatory and Business Advisor. For additional information kindly contact us on [email protected].