Is a cannabis club profitable?

If you are a regular cannabis user and interested in cannabis culture, you may have wondered whether running a cannabis club is profitable. Below, we explain all the details you need to know if you are considering opening one of these clubs.

What happens in a Cannabis Club?

A cannabis association or social cannabis club (CSC) is a private organization that allows members to gather in a designated space to consume cannabis. The purpose of these organizations is to provide controlled and safe access to marijuana. In recent years, such associations have significantly increased across Spain, especially in major cities, offering a secure place for personal consumption in a social setting.

They operate under Organic Law 1/2002 of March 22, which regulates the right to association. Additionally, they rely on the legal gray area surrounding marijuana: personal consumption of this substance is not prohibited as long as it occurs in a private, enclosed space, away from the general public. Although CSCs are not explicitly regulated in Spanish law, they exist within a legal loophole subject to interpretation. This is why it is crucial for them to strictly comply with specific requirements to avoid legal issues.

Is it profitable?

But is running a cannabis association profitable? It is important to remember that the philosophy of a CSC is based on shared cultivation and consumption. First and foremost, only a limited amount of cannabis can be available for immediate consumption by members, typically between 3 to 5 grams per person, following guidelines from the National Institute of Toxicology.

Additionally, cannabis associations can engage in certain economic activities, such as selling refreshments, food, merchandise, and accessories, but only for the benefit of the club, meaning that these earnings should cover operational costs, including the premises and cultivation expenses. If authorities detect profit-making activities, it could be classified as drug trafficking, leading to serious legal consequences. While employees can earn a salary, no profit can be generated from membership fees. Any extra income must be reinvested into the club itself.

Step-by-Step guide to starting a Cannabis Club

When it comes to expenses, starting a cannabis association requires an initial investment shared among members, but it remains a relatively affordable project if managed efficiently. Here are the key steps to opening a CSC:

Registering the Cannabis Club

The first step in creating a cannabis association is registering it officially. Like any association, it must have at least three founding members: a president, a board of directors, and a treasurer. Additionally, it must have bylaws, operational regulations, and membership fees. These details must be formalized in an initial founding meeting and documented properly.

Finding a suitable location

A cannabis association must operate in a private space, meaning its activities should not be visible to the public. Finding the right space can be challenging. Additionally, modifications may be necessary to comply with regulations, such as installing a proper smoke extraction system. Once a location is chosen, an activity license must be obtained, with costs varying by municipality.

Equipment of the premises

A Cannabis Social Club is much more than a place to light up a joint. It is a meeting and leisure space, so it is advisable to allocate part of the budget to create a suitable atmosphere for the well-being of the members. For example, it can be equipped with sofas, armchairs, poufs, vending machines, coffee and tea, etc.

How to obtain cannabis

This is arguably the most challenging aspect. In Spain, selling Cannabis  in CSCs for money is strictly prohibited, as it is considered drug trafficking.

Generally, associations grow their own cannabis in a designated space exclusively for their members. This means that only the necessary amount is cultivated to meet the demands of registered members. Additionally, a cultivation declaration must be prepared, detailing all relevant information.

Management tools

Managing an association requires taking care of many aspects, from accounting, marketing, communication, registrations, legal aspects, etc. To manage everything better, there are software companies that have launched management programs specially designed for cannabis associations.

How to avoid club closure

Many cannabis associations end up being shut down by authorities due to violations of the law. CSCs often attract legal scrutiny, especially in areas with stricter cannabis policies. Therefore, it is crucial to strictly adhere to regulations to avoid misinterpretations of the club’s activities. The main reasons for club closures include:

• Failure to register the association or formalize its statutes.
• Allowing minors on the premises.
• Advertising and client recruitment.
• Non-compliance with municipal ordinances.
• Selling cannabis or promoting its use.

Additionally, members should never remove cannabis from the club. When accepting new members, it is essential to ensure they commit to following the association’s rules. Any cannabis found on a member outside the club could lead to an inspection and financial penalties.