The regulation of Maltese Cannabis Clubs is taking shape a little more. A recent legal opinion now explains what cannabis consumer associations will need to do to obtain a license to sell cannabis to registered members, whether it’s the records they must keep or the people they can employ.
The legal notice comes 15 months after the government effectively legalized recreational cannabis and a few weeks after the new industry regulator began accepting applications for registration.
Associations will be limited to a maximum of 500 members and membership in more than one association at a time will be prohibited.
Annual licenses
Associations will be required to contribute 5% of their annual revenue to a harm reduction fund and 10% of their undistributed profits to a community projects fund. These two funds will be managed by the regulator of the sector, the Authority for the Responsible Use of Cannabis (ARUC).
Registration fees for associations have been reduced compared to the amounts initially planned: small associations with up to 50 members will now only pay 1,000 euros per year, instead of the minimum 8,750 euros initially proposed.
CURA boss Leonid McKay says the decision to lower the entry fee was taken following feedback from potential applicants, who said they would not be able to afford the exorbitant fees .
However, the fees increase according to the number of members: the largest associations, which can have 351 to 500 members, will pay an annual fee of 26,000 euros.
Cultivation, Sales and Membership Records
All associations will be required to keep detailed records of each cannabis grow cycle and file a quarterly report with CURA detailing membership numbers, cannabis sold and cash flow.
The law states that the CURA “may” manage a centralized digital system for collecting data and monitoring without today’s guarantee of the confidentiality and security of the personal data of the members of the association.
Instead, the rules only state that associations must keep a register of members including all their personal data, without any specific privacy or security requirements. There is also no explicit obligation for associations to delete member data at any given time.
Wages at market rate
All associations must be “non-profit” and must remunerate their directors in accordance with market rates established by the Voluntary Organizations Act. Exceptions will only be permitted when a person has “specific skills” and with CURA approval.
Founders of Cannabis Clubs must have lived in Malta for at least five years to form an association and anyone convicted of major crimes or drug-related offenses within the last ten years cannot form an association, hold a role key in an association or work as an employee.
Inspections and fines
CURA inspectors will be authorized to carry out on-site inspections or audits. Offenders face penalties ranging from a warning to specific injunctions or, in the most serious cases, referral to the police and revocation of their licence.
The fines are more or less severe. Associations that do not file a quarterly report or do not keep a correct list of their members will be fined 1,000 euros, the lowest fine provided by the rules.
From there, the fines gradually increase to 2,000 euros (sale of alcohol in associations or excessive number of members), 2,500 euros (nuisance for neighbours), 5,000 euros (sale of cannabis that is not not clearly labeled and packaged), and finally 10,000 euros for the most serious infringements.
