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[![Malta cannabis association licensing documents displayed on a regulator’s office desk](/images/uploads/b75646ff-deb2-4289-aac8-62f43ac2de7e/news-hero-malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consume-1920x1080.jpg)](/images/uploads/b75646ff-deb2-4289-aac8-62f43ac2de7e/news-hero-malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consume-1920x1080.avif "View image full size")

[Business](/news/business "Business")

10 min read

# Malta’s Cannabis Network Reaches Eight as Study Warns Tax Hikes Can Push Consumers to Unregulated Markets

![Portrait of Rob Harley, Cannabivo news desk](/images/uploads/5f094d99-3443-4907-8555-2910851fd38a/rob-harley-1920x1920.jpg)By [Rob Harley](/user-profile?u=a65dddce-73db-40b5-8660-fe93612a7384 "View the author's member profile")Published Yesterdayin [Business](/news/business "Business")

 Malta’s regulated cannabis network has reached eight licensed associations as a US study finds tax-driven price rises can shift consumers to unregulated

![Portrait of Rob Harley, Cannabivo news desk](/images/uploads/5f094d99-3443-4907-8555-2910851fd38a/rob-harley-1920x1920.jpg)By [Rob Harley](/user-profile?u=a65dddce-73db-40b5-8660-fe93612a7384 "View the author's member profile")

Rob Harley has reported on cannabis law and the non-profit association movement across Europe for the past decade. He focuses on how regulation actually reaches the members who use cannabis social clubs — the paperwork, the limits, and the slow build of public trust. His work for Cannabivo aims to be accurate, sourced, and free of hype.

[More articles by this author](/news/author/rob-harley "See all articles by this author")Published Yesterdayin [Business](/news/business "Business")

 In this article1. [Malta’s regulated association network expands](/news/business/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unregulated-markets#malta-s-regulated-association-network-expands "Malta’s regulated association network expands")
2. [The US study’s central warning about tax-driven prices](/news/business/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unregulated-markets#the-us-study-s-central-warning-about-tax-driven-prices "The US study’s central warning about tax-driven prices")
3. [Why the price gap can weaken regulation](/news/business/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unregulated-markets#why-the-price-gap-can-weaken-regulation "Why the price gap can weaken regulation")
4. [The evidence does not yet show a Maltese tax effect](/news/business/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unregulated-markets#the-evidence-does-not-yet-show-a-maltese-tax-effect "The evidence does not yet show a Maltese tax effect")
5. [What Malta can learn from the US policy debate](/news/business/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unregulated-markets#what-malta-can-learn-from-the-us-policy-debate "What Malta can learn from the US policy debate")
6. [The policy test for Malta is keeping demand inside the regulated channel](/news/business/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unregulated-markets#the-policy-test-for-malta-is-keeping-demand-inside-the-regulated-channel "The policy test for Malta is keeping demand inside the regulated channel")

[Malta](/malta "18 Cannabis Clubs in Malta (2026) | Cannabivo")’s Authority for the Responsible Use of Cannabis has announced regulatory amendments and a new licence that brings the country’s Cannabis Harm Reduction Association network to **eight licensed associations**, while a US study of 1,525 adult cannabis consumers found that tax-driven price increases can push much of the lost legal-market demand into unregulated channels. The finding, reported in [NORML’s analysis of the Health Economics study](https://norml.org/blog/2026/07/21/analysis-tax-hikes-on-state-legal-cannabis-products-drive-consumers-to-unregulated-markets/ "NORML’s analysis of the Health Economics study"), does not establish that Malta has raised cannabis taxes or that Maltese consumers are already making the same switch. It does, however, place a clear policy question alongside Malta’s expanding regulated framework: how much can legal access absorb before higher prices begin to undermine it?

## Malta’s regulated association network expands

The Authority for the Responsible Use of Cannabis, Malta’s national cannabis regulator, said it had amended several directives governing Cannabis Harm Reduction Associations. A new licence increased the total number of licensed associations to eight, according to the [Malta regulator’s regulatory update](https://aruc.mt/news/authority-for-the-responsible-use-of-cannabis-announces-regulatory-updates/ "Malta regulator’s regulatory update").

That development matters to the tax debate because Malta’s regulated cannabis policy is being built through an association model rather than the US state-licensed retail structure examined in the study. The available facts do not provide Malta-specific tax rates, retail prices, sales volumes or evidence showing consumers moving from licensed associations to unregulated sellers. The local development is therefore best understood as the growth of a regulated channel, not as proof that Malta has already experienced the market effect identified in the US research.

For international readers, the central distinction is between the expansion of a legal or regulated access route and the economic conditions that determine whether consumers use it. A larger network may broaden the regulated system, but the supplied evidence does not show how taxation affects the final price paid by members in Malta.

The concrete Malta context is the regulator’s licensing update:

[![Licence paperwork and regulatory documents at a Malta Cannabis Harm Reduction Association reception desk](/images/uploads/e1956f2e-e66a-4940-a9ef-42bbe0e5935a/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unre-1920x1080.jpg)](/images/uploads/e1956f2e-e66a-4940-a9ef-42bbe0e5935a/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unre-1920x1080.avif "View image full size")

Malta’s regulator has reported that a new licence brings the number of licensed Cannabis Harm Reduction Associations to eight.What is known about Malta

The supplied Malta facts establish a regulatory update and eight licensed associations. They do not establish a Maltese tax hike, a Maltese price change or a measured shift from regulated associations to unregulated markets.

## The US study’s central warning about tax-driven prices

The primary source describes research by investigators affiliated with Ohio State University in the United States. The researchers examined purchasing behaviour among a cohort of **1,525 adult cannabis consumers** and assessed how different tax bases and rates affected consumption of state-legal cannabis products.

The study’s key result was not simply that higher prices reduce purchases in the legal market. Its more consequential finding was that much of that reduction may represent substitution rather than the disappearance of demand. The authors concluded that **89 percent** of the reduction in consumption of state-legal products may be offset by consumers switching to illegal products.

> Increasing prices through taxes on legal products will drive consumption to illegal products.
>
> The Health Economics study authors, as quoted by NORML

The study therefore presents taxation as a potential market-design issue. If taxes raise the price gap between regulated and unregulated supply, consumers may respond by changing where they buy rather than by ending their purchases. The result is a warning about the limits of using tax increases as a straightforward revenue measure.

The headline figures from the research and Malta’s regulatory update are:

The numbers behind the policy question

8Licensed Cannabis Harm Reduction Associations in Malta

1,525Adult cannabis consumers in the US study cohort

89%Of the legal-consumption reduction potentially offset by switching

[![Researchers reviewing anonymized cannabis purchasing survey documents at an Ohio State-affiliated office](/images/uploads/78504f9e-d7f7-453c-bda8-efbfa7ec92a8/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unre-1920x1080.jpg)](/images/uploads/78504f9e-d7f7-453c-bda8-efbfa7ec92a8/malta-s-cannabis-network-reaches-eight-as-study-warns-tax-hikes-can-push-consumers-to-unre-1920x1080.avif "View image full size")

The US research examined how cannabis consumers responded to different tax bases and rates.

## Why the price gap can weaken regulation

A regulated cannabis market offers more than a legal point of sale. In the NORML report, Deputy Director Paul Armentano argues that unlicensed sellers may not check identification, test products for quality or purity, or operate under regulatory oversight. He also says that unregulated sales do not return revenue to local communities in the same way regulated businesses can.

Those claims are presented by NORML as an argument against excessive taxation, rather than as a Malta-specific measurement. Their relevance to Malta is conditional: if a tax policy makes the regulated route substantially less attractive, the safeguards attached to that route may reach fewer consumers. The study’s 89 percent estimate gives that concern a measurable form in its US sample, but it does not quantify the effect in Malta.

This is why the tax question cannot be separated from access. A tax increase may raise the amount collected per legal transaction while reducing the number of transactions that remain inside the regulated system. Whether the overall policy succeeds would depend on the balance between those effects, as well as on the size of any price difference facing consumers.

The mechanism identified in the source can be summarised in three linked steps:

- Higher taxes increase the price of products sold through the regulated market.
- Higher legal prices reduce consumption of state-legal products among some consumers.
- A substantial share of that reduced legal-market consumption may shift to unregulated sellers instead of disappearing.

For Malta, the implication is not that every consumer will respond in the same way. It is that policymakers cannot assume a higher legal price automatically produces a proportionate reduction in demand. The response may instead be a movement between channels.

## The evidence does not yet show a Maltese tax effect

The geographic limits of the evidence are important. The study concerns adults who use recreational cannabis in the United States and refers specifically to state-legal products. Malta’s available information concerns the Authority for the Responsible Use of Cannabis, Cannabis Harm Reduction Associations and the licensing of an eighth association. Those are related policy questions, but they are not the same dataset.

The comparison is set out below:

What the supplied evidence establishes about taxation and regulated access
| Evidence | Finding | Geographic scope | Source |
|---|---|---|---|
| Health Economics study | Higher legal prices significantly reduce legal-product consumption; 89% of that reduction may be offset by switching | United States | [NORML tax analysis](https://norml.org/blog/2026/07/21/analysis-tax-hikes-on-state-legal-cannabis-products-drive-consumers-to-unregulated-markets/ "NORML tax analysis") |
| ARUC regulatory update | A new licence brings the number of licensed Cannabis Harm Reduction Associations to eight | Malta | [Malta regulatory update](https://aruc.mt/news/authority-for-the-responsible-use-of-cannabis-announces-regulatory-updates/ "Malta regulatory update") |

The table shows why the US finding should be treated as a policy warning for Malta, not as a local outcome. No supplied fact states that Malta has imposed a comparable tax increase, that legal products have become more expensive, or that consumers have shifted to unregulated supply.

Malta’s framework also sits within a wider international landscape in which legal access, product rules and regulatory models vary significantly. A broader reference point is available in Cannabivo’s **Cannabis Legalization** Overview: Global Legal Status, but the tax evidence in this story remains specifically tied to the US study and the Maltese licensing update.

## What Malta can learn from the US policy debate

The NORML report describes contrasting responses in the United States. It says lawmakers in Maine, Maryland, Michigan and Minnesota passed legislation imposing significant cannabis-related tax increases, while a California NORML-led effort rolled back marijuana-related taxes in California. It also reports that members of the District of Columbia Council rejected a budget proposal that would have significantly increased sales taxes on retail cannabis purchases.

Those examples are not a template for Malta, and the supplied facts do not establish whether any of the US measures produced the same consumer response measured in the study. They do show that tax levels are being treated as part of the structure of a legal market, rather than as a separate revenue decision.

As Malta’s licensed association network reaches eight, the relevant policy test is whether regulation remains accessible enough to compete with unregulated supply. The evidence supports asking four questions before treating higher taxes as a clear gain:

1. Do higher taxes translate into a material increase in the final price paid through Malta’s regulated associations?
2. Would consumers respond by reducing cannabis purchases, or by switching to unregulated sellers?
3. Would additional tax revenue compensate for any loss of regulated-market activity?
4. Could a smaller regulated market mean fewer consumers remain within systems that provide identification checks, testing and regulatory oversight?

These are questions for Malta’s own data, not conclusions that can be imported from the US sample. Without local figures on prices, purchases and consumer behaviour, the strongest defensible statement is narrower: the US evidence warns that tax hikes can displace demand from regulated channels, and Malta should not assume that legal-market consumption simply vanishes when prices rise.

## The policy test for Malta is keeping demand inside the regulated channel

Malta’s regulator has expanded the number of licensed Cannabis Harm Reduction Associations to eight, but the information available here does not yet reveal how taxation affects the country’s consumers or associations. The US research gives policymakers a reason to monitor that relationship closely: tax increases may reduce legal purchases while leaving much of the underlying demand intact.

For Malta, that makes the distinction between raising revenue and sustaining regulation central. The evidence does not justify claiming that a Maltese tax hike has already driven consumers into unregulated markets. It does justify treating price, access and oversight as connected parts of the same policy decision.

Key takeaways

- Malta’s Authority for the Responsible Use of Cannabis has reported that a new licence brings the number of licensed Cannabis Harm Reduction Associations to eight.
- A US study of 1,525 adult cannabis consumers found that 89% of the reduction in state-legal cannabis consumption may be offset by switching to illegal products.
- The supplied facts do not show that Malta has raised cannabis taxes or that Maltese consumers have shifted to unregulated markets.
- The evidence suggests that tax policy should be assessed alongside legal-market access, consumer prices and the regulatory safeguards attached to licensed supply.

Malta’s expanding regulated association network provides the local context, while the US study supplies the warning: when taxes push legal prices higher, consumers may move between markets rather than leave cannabis behind. Until Malta-specific price and purchasing data are available, the finding remains a caution for policymakers—not a measured result for Malta—but it is a caution with direct relevance to the sustainability of regulated access.

## Sources

1. [632kg Gras verbrannt | DHV-News

# 516 (hanfverband.de)](https://hanfverband.de/632kg-gras-verbrannt-dhv-news-516 "Open source in a new tab: https://hanfverband.de/632kg-gras-verbrannt-dhv-news-516")

2. [Endgültig! GKV-Erstattung eingeschränkt | DHV-News

# 515 (hanfverband.de)](https://hanfverband.de/endgueltig-gkv-erstattung-eingeschraenkt-dhv-news-515 "Open source in a new tab: https://hanfverband.de/endgueltig-gkv-erstattung-eingeschraenkt-dhv-news-515")

3. [Bipartisan Bill Seeks to Overturn Intoxicating Hemp Ban and Regulate Multi-Billion Dollar Sector (businessofcannabis.com)](https://businessofcannabis.com/bipartisan-bill-seeks-to-overturn-intoxicating-hemp-ban-and-regulate-multi-billion-dollar-sector/ "Open source in a new tab: https://businessofcannabis.com/bipartisan-bill-seeks-to-overturn-intoxicating-hemp-ban-and-regulate-multi-billion-dollar-sector/")
4. [Argent Trades Global Rights to Lead Cannabis Drug For Debt Releaf in New $5.5m Deal (businessofcannabis.com)](https://businessofcannabis.com/argent-trades-global-rights-to-lead-cannabis-drug-for-debt-releaf-in-new-5-5m-deal/ "Open source in a new tab: https://businessofcannabis.com/argent-trades-global-rights-to-lead-cannabis-drug-for-debt-releaf-in-new-5-5m-deal/")
5. [Massachusetts: State Officials Affirm Marijuana Repeal Initiative Will Appear on November’s Ballot (norml.org)](https://norml.org/blog/2026/07/21/massachusetts-state-officials-affirm-marijuana-repeal-initiative-will-appear-on-novembers-ballot/ "Open source in a new tab: https://norml.org/blog/2026/07/21/massachusetts-state-officials-affirm-marijuana-repeal-initiative-will-appear-on-novembers-ballot/")
6. [Analysis: Tax Hikes on State-Legal Cannabis Products Drive Consumers To Unregulated Markets (norml.org)](https://norml.org/blog/2026/07/21/analysis-tax-hikes-on-state-legal-cannabis-products-drive-consumers-to-unregulated-markets/ "Open source in a new tab: https://norml.org/blog/2026/07/21/analysis-tax-hikes-on-state-legal-cannabis-products-drive-consumers-to-unregulated-markets/")
7. [California Treasurer Announces Hearing On Marijuana Business Banking Access Issues (marijuanamoment.net)](https://www.marijuanamoment.net/california-treasurer-announces-hearing-on-marijuana-business-banking-access-issues/ "Open source in a new tab: https://www.marijuanamoment.net/california-treasurer-announces-hearing-on-marijuana-business-banking-access-issues/")
8. [GOP Lawmaker Claims White House Backs His Hemp Bill, But Administration Has Problems With Inhalable Product Provisions, Sources Say (marijuanamoment.net)](https://www.marijuanamoment.net/gop-lawmaker-claims-white-house-backs-his-hemp-bill-but-administration-has-problems-with-inhalable-product-provisions-sources-say/ "Open source in a new tab: https://www.marijuanamoment.net/gop-lawmaker-claims-white-house-backs-his-hemp-bill-but-administration-has-problems-with-inhalable-product-provisions-sources-say/")
9. [Cuckooing: How Drug Dealers Are Occupying UK Homes (talkingdrugs.org)](https://www.talkingdrugs.org/cuckooing-how-drug-dealers-are-occupying-uk-homes/ "Open source in a new tab: https://www.talkingdrugs.org/cuckooing-how-drug-dealers-are-occupying-uk-homes/")
10. [Psilocy-win?: Canadian MPs Push for Psychedelic Therapy (talkingdrugs.org)](https://www.talkingdrugs.org/psilocy-win-canadian-mps-push-for-psychedelic-therapy/ "Open source in a new tab: https://www.talkingdrugs.org/psilocy-win-canadian-mps-push-for-psychedelic-therapy/")