The Progress of the Dutch Cannabis Supply Chain Experiment

Historically known for its progressive and pragmatic drug policies, the Netherlands now risks falling behind other European countries if it doesn’t update its model for cannabis. Is the government’s proposed pilot programme the solution?

The Netherlands’ unique approach to recreational cannabis has led to a situation commonly known as the ‘backdoor problem’, whereby the country’s coffeeshops can legally sell cannabis, but the suppliers of the products sold in these shops still operate illegally, keeping a portion of the industry dependent on the black market. While the Dutch are often lauded for their pragmatic ‘gedoogbeleid’ drug tolerance policy, which prioritises public health over criminal sanctions, this grey-market system is counterintuitive and clearly untenable.

In order to pre-assess the effects of moving cannabis cultivation out of the black market, the Dutch government has proposed an 'experiment gesloten coffeeshopketen' or a ‘controlled cannabis supply chain experiment’ to test how legalisation would work in practice. However, the proposed experiment is moving slowly through the legislature, the participation rules are dissuading large cities from taking part, and even once it officially starts, the first year of the programme will be dedicated to building stock.

The Timeline

A first draft of the order in council was published in November 2018. After an independent advisory committee issued recommendations about the design of the experiment, on 22 January 2019, the House of Representatives adopted the controlled cannabis supply chain experiment bill. The bill is currently being debated in the Senate and it is expected that the law will only come into effect by January 1, 2020.

Theoretically, once the requisite legislation enters into force and municipalities are selected, the experiment comprises four phases: A preparation phase, a transition phase, an implementation phase and a phasing out phase.

Preparation (1 year+):

  • After the law (and the decree) enter into force, cannabis cultivators can apply for a permit to be selected as a grower by submitting a business plan.

  • Cultivation can begin once growers are designated. The preparation phase to amass sufficient stock is expected to take at least one year.

  • The cultivators must produce at least 10 different types of cannabis product.

Transition (6 weeks):

  • A short transition phase will follow, lasting a maximum of 6 weeks, where coffeeshops in the participating municipalities may use their prior ‘tolerated’ cannabis stock in addition to cannabis grown within the scheme.

Implementation (4+ years):

  • The implementation phase of the experiment is scheduled to last four years, but the government is able to extend it.

Completion:

  • During this phase coffeeshops may once again stock tolerated cannabis alongside cannabis produced within the experiment. At the end of this phase, the situation in the municipalities should be back to before they entered the experiment.

D66 MP Vera Bergkamp, who originally introduced the initiative bill to legalise the cannabis supply chain.

D66 MP Vera Bergkamp, who originally introduced the initiative bill to legalise the cannabis supply chain.

Despite assurances from D66 MP Vera Bergkamp “that the first regulated joint will be smoked during this cabinet period,” if the law is expected to come into effect in January 2020, then the experiment could only enter the transition phase by January 2021 at the earliest.

Political stalling

Elections to the Netherland’s Lower House will be held in mid March 2021. If the implementation period of the experiment has not yet started during the subsequent cabinet formation, a new cabinet could halt it.

The de Volkskrant newspaper has reported that the experiment is being used to draw out the legalisation process by anti-cannabis parties, saying that experiment “is an escape route for VVD, CDA and CU: it means provisional deferment of actual legislation that enters into force.”

They explain that while D66, GroenLinks, PvdA and SP are in favour of cannabis regulation and legalisation of cultivation, the main reason that traditionally anti-cannabis parties CDA, CU and VVD went along with the proposal for the programme during the 2017 cabinet formation was to avoid a D66-proposed initiative bill to legalise the cultivation and sale of cannabis (without a pilot period). The bill had passed in the Lower House and was expected to pass in the Senate, but it was never considered as it was replaced by the experiment proposal in the coalition agreement.

Reluctance from large municipalities

The proposed legislation stipulates that all coffeeshops in any participating town or city must be part of the programme. For coffee shops in any participating border municipalities the resident criterion will also apply, meaning that the sale of cannabis to people who do not live in the Netherlands is prohibited. In other municipalities, the mayor can apply the resident criterion based on the local situation to prevent nuisance caused by drug tourism.

This has made the programme less attractive to cities located on the German and Belgian borders, as well as ones with high levels of tourism. These plans in particular have been criticised as unfeasible for larger cities by the Association of Netherlands Municipalities (VNG), as well as the mayors of Rotterdam and Amsterdam. Because of this rule Venlo, Groningen, Amsterdam, Rotterdam and Tilburg have so far declined to participate.

Professionalisation of the Dutch cannabis industry

Between these developments and the recent news that the government is looking to expand cultivation for medical cannabis (currently Bedrocan is the country’s only approved producer), it is clear that Europe’s most well known cannabis market is undergoing a period of transformation. This is why Hanway Associates is bringing a new branch of our First Wednesdays network to Amsterdam, starting May 1st.

 
 

In an effort to encourage dialogue and tap into the wave of breakthroughs across the continent, Dutch industry leaders have turned to the First Wednesdays network as a catalyst, which has already proven popular in the UK and France.

Local host Michael Kraland of the Cannabis Capital Convention explains why now is the time to bring First Wednesdays to Amsterdam: “Because they should have launched it here first but they’re Londoners! The world is changing fast. We are trying to help lifting cannabis out of the underground and into the mainstream. First Wednesdays is an obvious step ahead. Amsterdam deserves this.”

Interested parties can attend next week’s First Wednesdays in Amsterdam, London or Paris by registering here.


For more insights and advice on recreational and medical cannabis developments in the Netherlands or information on the First Wednesdays network, please get in touch info@hanwayassociates.com.