The cannabis authority has been assured that local banks will not turn down potential cannabis clubs on the grounds that they are selling marijuana, after the associations raised concerns that the industry could be deemed too risky.
Leonid McKay, who heads the Authority for the Responsible Use of Cannabis, said the issue had been raised during discussions with various stakeholders, including banks and non-governmental organisations.
These meetings resulted in feedback from informal contacts with banks that they would possibly refuse to open bank accounts for prospective cannabis clubs – dubbed Cannabis Harm Reduction Associations.
The associations are the only way one can legally buy the drug, which was legalised in December 2021. Prospective associations started applying to sell locally-grown marijuana from February 28 and, so far, 26 applications have been received by the authority.
No licences have been granted yet.
Too risky
Sources explained that, to operate, these clubs would need to set up bank accounts to take care of payroll, pay for services and handle payments, amongst other things. But local banks deemed the cannabis industry too risky.
McKay explained that, following these concerns, the authority reached out to the banks and “explained the robustness of our regulatory process and what the checks and balances would entail.
"This included an overview on the driving principles of this reform and how it intends to reach its aim: that of having associations made up of a local community of individuals (not companies) working on a not-for-profit basis whose aim shall be to promote public health and harm reduction.
“The authority is satisfied that a number of banks have indicated that they would not, in principle, refuse a request to open a bank account for the sole reason that the purpose of the association is to cultivate and distribute cannabis for non-medical use. It is, therefore, not envisaged that this matter will delay the issuing of licences to prospective associations,” he said.
The cannabis clubs must be non-profit and can only sell their own product, meaning that only seeds can be imported from abroad. This means that cannabis legally sold in Malta must be grown in the country.
Club rules
Cannabis clubs must have a maximum of 500 members and cannot be within 250 metres of a school or youth centre. They are also barred from advertising themselves and cannot include the word ‘cannabis’ or incite the use of cannabis.
Applicants must pay a registration fee of €1,000 and the licence fee starts at €1,000 for associations with up to 50 members. Cannabis sold must include a label that discourages cannabis use and have details of the plant used.
A person can only join one club. Anyone over 18 can join a club. However, there is a cap on the level of THC – the cannabis compound that gets people high – for anyone under the age of 21.
All revenue must be reinvested in the organisation or in salaries. Associations will also contribute a portion of their sales to a harm reduction fund.
Correction: An earlier version of this article stated that the licence fee starts at €,8,750 for the first 50 members.