business
Cannabis Clubs – What They Are and How They Operate
Spain might have popularized the idea of cannabis clubs, but now they’re showing up everywhere. What are they, how do they operate, and what are the benefits?
What are cannabis clubs?
For those unfamiliar with the term, it might sound like a group of stoners partying together; and sometimes this is not far off. There are different kinds of cannabis clubs, that function under different parameters. Some are done legally, and some are done illegally. And it’s the latter that really got things underway. We’ll get to that in a moment.
One of the general and basic concepts of most cannabis clubs, is that they provide an alternate way to obtain weed, outside of a regular sales market. Clubs generally charge a membership fee, and this fee, is essentially payment for all weed used by a specific member. The fee is not a flat rate for all, since people use different amounts. Rather, its based on how much a person wants to procure regularly. If a person’s use habits change, so does their membership fee. No money changes hands for a particular procurement, so no real sales are made.
Cannabis clubs go in contrast to sales markets. Though there are no official rules about how a club must run; for the most part, they’re based around disseminating flowers and/or seeds for home-growing. They don’t generally involve a products market; and therefore, are not a part of the marketing world. There is no battle of the products taking place; which also means no companies pushing shady products, and no product claims. They basically kill the idea of marketing within the industry.
The clubs are almost uniformly run by non-profits, and require different things of members; from showing IDs, to a local address, and so on. They are closed loops; in which production, dissemination, and/or use, happen within a specified area. The idea is to cover the needs of members, so they don’t have to buy from the black market. These clubs can control for quality, grow organically if desired, and give users information on what they’re obtaining.
Are cannabis clubs legal?
A cannabis club is a concept; and this concept doesn’t have anything directly to do with legality. However, having said this, they are also a vehicle for getting around laws, since they create a general loophole of avoiding direct sales. It’s the illegal capacity of cannabis clubs that really brought them to light. Spain is a great example.
In Spain, cannabis isn’t legal for recreational use or official production, but it does come with a decriminalization policy. Adults can grow and use the plant personally, but there is no exact number given for the cutoff between decriminalized cultivation/use and drug trafficking. For the most part, if you’re keeping to yourself, and not producing huge amounts, you should be fine.
The thing is, not everyone wants to grow their own. Not everyone has time. The whole idea of dispensaries, and dealers, is to get a product to a person, without them doing the dirty work. So, even though commercial production and sales are illegal; Spain found a way to get around this, and create a system whereby users can access a loophole, to get their product.
In Spain, they’re called social clubs, and they’re run by non-profit organizations. The organizations create the closed loop which is so inherent to most of these systems. All growing, and distribution is for a specific group of people who are a part of the same organization; and its all done on private property. Spain’s cannabis clubs don’t operate by regulatory law, so for Spain, a user can both obtain their weed, and smoke it with other members, in the location.
There have certainly been bumps along the way for Spain, and still continue to be. For example, in 2015, Spain made a ruling that cannabis clubs were akin to drug trafficking. This didn’t stop anything; indicating law enforcement might not want to go after users. The country tried again in 2021 to close the loophole that allows it, but to no avail. Though law enforcement at times cracks down, and this can affect the number of clubs in operation; the market has stayed intact since its inception.
Kinds of clubs
The model I described is the usual model for cannabis clubs; but its not the only one. And some, actually have nothing to do with non-profits at all. Like Nevada’s Consumption Lounges. These lounges are not up-and-running yet; but several companies have received licenses, so they are on the way. They describe a scenario very different from Spain.
The Nevada consumption lounges will only be for use in a social situation. If you’ve ever been to Las Vegas, you might think its legal to smoke anywhere you want outside; but much like the coffeehouses of the Netherlands, this is not what it seems. In Nevada, only private use is legal. The consumption lounges are meant to fill the gap, by providing a legal place for use.
What we know about these upcoming lounges, is that they won’t permit alcohol sales or use (it’s not a BYO scenario); their supply will come from local retailers; all weed used must be purchased onsite (no BYO again); and no taking any out with you in a doggy bag (everything must be consumed onsite, or left there). This model is run for profit, relies on the purchase of users, and isn’t about providing weed for anything more than use right there. It cannot be used to ‘re-up.’
Weed legality doesn’t mean cannabis clubs automatically turn into for-profit ventures, though. Malta defines this idea well. Malta was the first country in the EU to legalize cannabis, which it did in 2021. As part of the EU, it did not attempt to open a sales market; although if this was always intended to stave off commercialization, or a product of EU mandate, I do not know. Regardless, Malta recently gave out the first licenses to get its cannabis clubs going. It refers to its clubs as ‘associations.’
These associations are the opposite of Nevada. Though Malta and Nevada are both legal locations, Nevada has an operational sales market, that Malta does not. Malta sticks to the use of non-profits to run the associations, and keeps in the closed-loop model, with absolutely no commercialization.
According to regulation, the associations are strictly meant to disseminate flower and/or seeds, in particular quantities (seven grams/day, up to 50 grams/month), and with no use onsite. If the seven grams possible in a day sounds low, its because that’s the instituted carry limit by law. Over seven will incur a fine; so associations cannot hand out more than that per day.
Are pilot studies similar?
Cannabis clubs introduce both an interesting way to get around stated laws, and a great way to provide quality cannabis without commercialism getting in the way. They also have a counterpart that functions only in legal markets; or rather, markets looking to legalize. These are called ‘pilot studies’. The word ‘study’ indicates that research is going on; and so we’re not looking at a stable market, but an investigation into how to create one. For this reason, these are short term projects of generally a few years. Switzerland is one of the best current examples of how to carry out a cannabis pilot program.
Pilot studies are similar in that they also create a closed-loop model. Users are signed up to a particular study, and can only procure product in a fixed location, sometimes chosen by the user. The study organizers cultivate the cannabis, or get it from a specific location; and only those registered can have access. These programs are specifically set up by governments.
One of the big differences, is that users don’t pay a membership fee to cover costs, but pay for their products onsite as a regular sales transaction. Each location with a study, decides for itself how to price products, and what regulation to implement. The end goal of these studies is to determine how to set up functional legal sales markets for an entire population. Whereas cannabis clubs are usually open to any adults; these studies have limited capacities, and only service a small amount of the population.
Conclusion
Cannabis clubs are an increasingly popular way to sell and use weed. As more countries, like Germany, seek to institute their own programs; we should see new models arise, along with fresh ideas of how to make these programs better. If you’re curious where else there are cannabis clubs in the world, and how they individually operate, check here.
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Related
A move by the Biden Administration to change how marijuana is treated by federal authorities was met with cautious approval by Massachusetts state regulators, cannabis sellers, and national marijuana advocates alike.
The Drug Enforcement Agency will drop marijuana from the list of banned substances found under Schedule I of the Controlled Substances Act, where it currently sits alongside heroin and LSD. It will instead move it to Schedule III, among the likes of Tylenol with codeine and anabolic steroids. This follows the recommendation of the Department of Health and Human Services
“Rescheduling cannabis is a monumental step forward for the federal government, one that can open new avenues to research, medical use, and banking for the regulated industries states like Massachusetts have built across the country,” said Ava Callender Concepcion, the acting chair of the Bay State’s Cannabis Control Commission.
Cannabis advocates in Colorado cheered the Biden Administration’s reported move to reclassify marijuana and said the decision likely would reduce businesses’ tax burden significantly.
Industry leaders cautioned that such a move — if finalized — would not resolve some major challenges facing the industry, such as limited access to banking. But they pointed to the symbolic importance of preparations by the U.S. Drug Enforcement Administration to downgrade the substance’s drug classification.
A man pours cannabis into rolling papers as he prepares to roll a joint the Mile High 420 Festival in Civic Center Park in Denver, April 20, 2024. (Photo by Kevin Mohatt/Special to The Denver Post)
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