BusinessCann reports that on Friday, 27 January 2023, the Maltese Authority for the Responsible Use of Cannabis (ARUC) announced new guidelines set to determine the nature of the island nation’s adult-use cannabis market.

Just over a year after Malta passed landmark legislation allowing adults to possess up to 7gs of cannabis for personal use, it has laid out the requirements its social clubs will have to meet before they are licensed to legally sell cannabis.

Applications for these so-called Cannabis Harm Reduction Associations (CHRAs), which will be the only avenue for citizens to legally purchase cannabis, are now due to open on February 28, 2023.

While this highly-anticipated legal framework has been hailed as ‘pioneering’ by its advocates, critics fear it could end up ‘facilitating the black market’ and fail in its commitment to being non-profit based.

A year in the making

In December 2021, the Maltese President George Vella signed into law proposals that permit adults to possess up to 7gs, cultivate four plants at home and secure cannabis supplies from regulated clubs.

To oversee this radical new framework, the first of its kind in Europe, the government set up ARUC, tasked with creating a ‘harm and risk reduction policy’ by which consumers can access cannabis via not-for-profit CHRAs.

While Maltese citizens have been able to grow their own cannabis at home since 2021, it remains illegal for them to sell to anyone.

This means that while it is essentially decriminalised to consume cannabis, those without the willingness or facilities to grow their own have no choice but to buy from the black market.

CHRA’s are designed to allow those home growers to begin selling their products to their community, while also providing a regulated route for consumers to bypass the black market.

CHRA requirements

Under the new regulations put forward by ARUC during its ‘Setting the Standards’ conference on Friday, CHRA applications must be made by two founders and an administrator who have lived in Malta for at least five years, and a legal representative.

Organisations must also have land on which to grow cannabis that is compliant with planning regulations, and the plants must be hidden from plain sight in a greenhouse or similar structure. 

Current agricultural permits for other crops can also now be transferred to cannabis.

CHRAs must also have a site to sell their cannabis, which must be grown from seeds sourced from within the EU or other authorised markets, but this needs to be at least 250 metres from school and youth centres and cannot advertise itself or incite the use of cannabis. The site must also be fitted with CCTV.

ARUC will be responsible for overseeing compliance and quality control, and each batch must be tested for mould, micro-organisms and synthetic elements before it is distributed.

Clubs will also be required to submit their audited financial accounts with ARUC. While there will be no minimum price or price caps set for cannabis sold, clubs must endeavour to offer prices below the black market and put a percentage of fees into harm reduction initiatives.

Concerns over fee structure

While many of these provisions have been long-anticipated by the industry, critics have argued that its fee structure threatens to undermine the project’s goals.

CHRAs, which can have a maximum of 500 members, will need to pay an initial application fee of €1000, whether they are successful or not.

They will subsequently be required to pay a minimum licence fee (50 members) of €8750, which will increase as the size of the club grows by an as-yet-unknown amount.

It is also understood that this initial licence will last for one year, then need to be renewed every subsequent three years, though it is unclear whether this licence fee will need to be repaid every time.

ARUC told BusinessCann: “Non-profit associations interested in obtaining a licence to grow and distribute cannabis to their members shall pay a licence fee on a yearly basis.

“An indicative minimum fee of €8,750 was provided, however this amount is not yet official. Associations shall also pay an application fee of €1,000 to obtain a licence, followed by renewals for 3 year periods.

“The Authority for the Responsible Use of Cannabis shall ensure that the associations adhere to the principle that they shall remain exclusively non-profit and that their purpose of existence shall be to promote harm reduction.

“We strongly believe that this sector should not be driven by business interests. We are confident that the fees will allow the associations to set prices which are on par or below illegal market rates whilst remaining financially viable.”

Andrew Bonello, President of pro-cannabis reform group ReLeaf Malta, said: “As an NGO founded on human rights and civil liberties, particularly for people who have been for decades incriminated for the sole crime of consuming or cultivating a plant, we continue to be very worried about developments related to cannabis associations in Malta.”

He added that it was ‘somewhat comical’ how non-profit based ‘bottom up’ cannabis associations will be expected to ‘afford the exuberant fees and also pay for other requirements’.Furthermore, Mr Bonello suggested that this framework failed to realise the project’s overarching goals centred around human rights and harm reduction by ‘not including the possibility to consume on site or share or gift cannabis’.“

These new over-the-top regulatory frameworks designed for only a few ‘rich’ players are definitely not being done to advance a harm and risk reduction approach embedded within a not-for-profit and social equity framework.”

Despite these criticisms, he believed that one ‘very promising aspect’ of the legislation was the requirement for founders and administrators to have lived in Malta for five years, ‘further shielding local consumers from profit driven foreign industries looking to establish a foothold in the EU green wave.’“

One remains hopeful there is still a possibility for change towards a human rights and social equity framework since as declared by Chairperson of ARUC, nothing is set in stone,” he concluded.

BusinessCann