Salaries paid out by cannabis associations will have to be approved by the regulator to ensure they are in line with market rates, ARUC boss Leonid McKay has said.
The Authority for the Responsible Use of Cannabis CEO said that the measure would be included in a legal framework that not-for-profit associations would need to adhere to and was intended to dissuade applicants seeking to turn their associations into money-making ventures.
ARUC will be assessing salaries against comparable ones within the voluntary sector and any association that tries to game the system by paying out ridiculous salaries will have its licence revoked, he said.
“These entities will not be businesses masquerading as NPOs,” McKay insisted. "We want to ensure there is no flow of funds from the associations to other interests."
The cannabis sector regulator was speaking during an interview with academic Andrew Azzopardi, broadcast on Heart FM.
ARUC, established in late 2021, is responsible for overseeing local legal cannabis use, following a controversial reform of cannabis laws that, among other things, allows cannabis users to grow up to four plants for personal use at home or join yet-to-be-established cannabis associations.
Associations must be run on a “not-for-profit” basis, with shareholders precluded from receiving any surpluses they generate. Suspicions about the business motive of such associations remain, however.
Well over a year since laws were reformed, a regulatory framework for such associations remains elusive, despite applications being accepted as of February 28.
The first indications about what the framework would contain were revealed at an ARUC-organised cannabis conference held last month. McKay said it was now weeks away from being completed.
He acknowledged that some of the attendees of that conference were clearly motivated by the idea of making money off the scheme.
But he insisted that the legal framework they would have to adhere to was designed to prevent such abuse.
Applicants keen on setting up an association will have to have resided in Malta for at least five years, he said, to discourage speculative investors from abroad.
Associations would be bound to contribute to ARUC’s harm reduction campaigns and would all be connected to a centralised, ARUC-held database to ensure the regulator kept tabs on memberships and sales, he said.
That database would anonymise members’ personal data, he said, to hide their names while allowing the regulator to ensure nobody joined more than one association at any given time.
McKay also revealed that cannabis association members would be allowed to buy up to 20 cannabis seeds from their club, to then grow at home.
He warned that, even with cannabis associations, the black market for the drug would not vanish overnight. In Canada, just one-third of cannabis users switched to legal avenues immediately after they legalised the substance, he said.
During the interview, McKay – a former Caritas director who spent years campaigning against cannabis reform - found himself on the back foot as Azzopardi accused him of having suddenly reversed his position.
“I always was, and will remain, against a full-blown, commercialised, free-for-all model,” he said. “Our model does not promote cannabis use. It focuses on harm reduction. It's not about legislating - it's about how to legislate."