This is an English translation. The original Dutch article is authoritative.
Municipalities increasingly state that, since the rulings of the Administrative Jurisdiction Division concerning Apeldoorn (2023) and Heerlen (2025), they are obliged to limit the duration of coffeeshop licences and to apply a scarce-licence regime. That reasoning is incomplete. Municipalities are only obliged to limit the licence duration of coffeeshops if they operate a lawful maximum system. The lawfulness of such a system depends strongly on its substantiation. In legal terms, the mayor''s authority has in fact been curtailed: he can no longer simply set or maintain a maximum.
Historically, mayors had broad discretionary powers to determine the number of coffeeshops. In many municipalities such maximums have existed for decades. They were set on the basis of considerations of public order, protection of the living environment and the enforceability of local tolerance policy.
The way in which those numbers came about was, at the time, generally rough and little systematised. In some municipalities a rule of thumb was used, such as one coffeeshop per 15,000 to 20,000 inhabitants.2 In other cases the number resulted from administrative consultation, in which differing views between the municipal council and the mayor were "averaged out". This often led to numbers that were primarily the outcome of administrative trade-offs and compromises, rather than of an explicit, objective analysis.
A defining feature is that many of these numbers then remained unchanged for years and became fixed components of local coffeeshop policy.3 Within this framework, setting the maximum was regarded as a policy-based exercise of the mayor''s discretionary power; judicial review remained limited and the administration had broad scope for assessment in determining the number of coffeeshops.
Through the doctrine of scarce licences, the choices made in coffeeshop policy have come to be seen in a different light.
The turning point is the Heerlen ruling of 30 April 2025.
In that case4 the operator appealed against decisions converting an indefinite hospitality operating licence with an implied tolerance statement into a fixed-term licence. The Division held in this ruling that, where a municipality works with a policy-based maximum, tolerance statements must have a limited duration.
Since this ruling, a substantive shift has been visible in practice. Municipalities with a maximum system have begun amending their policy by converting licences and tolerance statements of indefinite duration into fixed-term licences. That policy change has direct and far-reaching legal consequences for existing operators and their employees. Investments lose their certainty, business continuity comes under pressure and the value of businesses is affected. The ultimate consequence of these decisions is that coffeeshops have to close their doors.
It is precisely for this reason that it is important to emphasise that the Division has not delivered a substantive judgement on the lawfulness or substantiation of the underlying maximum system. Nor was it assessed whether the chosen number of coffeeshops is objectively justified, or whether less far-reaching alternatives are available. The ruling concerns only the assessment of the consequences of a policy-based ceiling, not that policy-based ceiling itself.
Coffeeshops do not hold a scarce licence within the meaning of the Services Directive
In this connection it is of decisive importance that coffeeshops do not hold a scarce licence within the meaning of the Services Directive. The sale of soft drugs takes place on the basis of toleration; the tolerance statement is not a licence within the meaning of Article 12 of the Services Directive.
This follows from the rulings most often cited by municipalities. In Apeldoorn (ABRvS 13 September 2023, ECLI:NL:RVS:2023:3431) the central question was whether a coffeeshop licence is a scarce licence within the meaning of the Services Directive. The Division held that it is not. This confirmed that Article 12 of the Services Directive does not apply to coffeeshops. The question of whether the municipal maximum system itself is objectively substantiated and capable of withstanding the General Administrative Law Act (Awb) was not decided in that ruling.5
The same applies to Heerlen (ABRvS 30 April 2025, ECLI:NL:RVS:2025:1925). In that case too the municipality limited the licence duration on the basis that, with reference to the Services Directive, it considered itself obliged to do so.6 The starting point was the existing coffeeshop policy, and it was assessed whether, within that policy framework, a temporary licence could be granted and whether its application in the individual case was proportionate. The fundamental question of whether the chosen maximum number, the chosen duration and the consideration of alternatives are sound as policy under the Awb was not the subject of review in that case either.7
If, however, a municipality itself takes the position that a scarce licence within the meaning of the Services Directive is involved, it cannot stop at merely limiting the duration. It must then apply the regime of Article 12 of the Services Directive consistently and in full — including objective substantiation of the maximum, objective selection criteria and a transparent allocation procedure.8
As in Apeldoorn, neither in Heerlen was it held that a scarce licence within the meaning of the Services Directive is involved. Therefore, for coffeeshops the principle that licences or tolerance decisions must automatically be temporary does not apply.
Where a municipality nonetheless operates a maximum system and thereby creates de facto scarcity, that choice must be substantiated objectively and proportionately. That also follows from national administrative law, in particular the proportionality test of Article 3:4 of the Awb. The municipality must show why a maximum is necessary, why the chosen duration is appropriate and why less far-reaching alternatives are insufficient.
Precisely because the maximum system here arises from administrative choices (de facto scarcity through policy), the administration must demonstrate that the chosen measure is necessary and proportionate. That means a municipality must make clear why less far-reaching measures cannot achieve the objective. This follows from the general principles of good administration9 for policy-based scarcity, where the starting point of indefinite duration applies and a limitation is only possible subject to conditions.10
The core is therefore clear. Case-law does not oblige municipalities to make licences temporary. It obliges municipalities, in cases of de facto scarcity and a maximum system, to provide objective substantiation. That obligation limits the mayor''s authority. He can still steer on numbers and conditions, but no longer without factual analysis, without weighing alternatives and without a transparent balancing of interests capable of bearing the heavy consequences for existing businesses.
In the available case-law on scarce licences and coffeeshops, the underlying policy has not been tested against the general principles of good administration. Those cases assumed the existence of a maximum system and assessed whether, within that framework, the licence duration could be limited and whether the policy had been correctly applied in the specific case. The question of whether the maximum, as a policy choice, meets the requirements of careful preparation, proper reasoning and proportionality has not been at issue.
The mayor''s authority has fundamentally changed
The Awb sets requirements for all decisions, but the meaning and weight of those requirements increase as the consequences of a decision become more far-reaching. In this case it concerns decisions in which a policy-based maximum is linked to temporary licences.
Article 3:2 Awb provides that the administrative body "shall, in preparing a decision, gather the necessary knowledge concerning the relevant facts and the interests to be weighed". This relates to the objective substantiation of the decision. The administration cannot make do with general policy starting points, historical assumptions or a reference to existing policy, but must concretely show, on the basis of what data the chosen maximum is justified, how this number relates to the actual situation and which interests are involved. The same applies to the choice of a particular licence duration.
In addition, Article 3:46 Awb requires that "a decision must be based on proper reasoning". That reasoning must connect with the established facts and may not remain abstract. When a maximum system is coupled with temporary licences, the administration must make clear why precisely this specific number is used, why this duration has been chosen and how these choices relate to the goals pursued by the policy.
Finally, it follows from Article 3:4(2) Awb that "the disadvantageous consequences of a decision for one or more interested parties may not be disproportionate in relation to the goals to be served by the decision". Where temporary licences lead to loss of continuity, investment certainty and business value, the administrative body must be able to explain why these consequences are acceptable and why less far-reaching measures will not suffice. This also means that the mayor is not entirely free in setting a licence ceiling. According to Advocate-General Widdershoven (ECLI:NL:RVS:2018:1847), the justification of a licence ceiling not falling under EU law must, via the proportionality test, be assessed against the trio of suitability (including coherence and consistency), necessity and, in some circumstances, proportionality stricto sensu (balance). Absent such substantiation, not only the individual decision but also the underlying maximum system lacks adequate administrative-law foundation.
The September 2024 ruling illustrates this. In ECLI:NL:RVS:2024:3732, a case on passenger shipping11, the Administrative Jurisdiction Division annulled the decisions through which existing indefinite operating licences had been converted ex officio into fixed-term licences. The Division held that, although the municipality had policy room to operate a maximum system, it had not sufficiently substantiated that the chosen policy change was necessary and suitable to achieve the goals pursued. Moreover, the Division held that the consequences of the conversion were disproportionately burdensome, in particular for existing operators. As a result, the amending decisions could not stand and the previously granted indefinite licences remained in force.
This ruling makes clear that policy and underlying policy choices fail to meet the requirements of the General Administrative Law Act when they are insufficiently objectively substantiated, even when the policy has been correctly applied. The annulment then follows not from incorrect implementation, but from defects in the reasoning and proportionality assessment of the policy itself.
It thereby becomes visible that the mayor''s authority has, in effect, been curtailed. Formally, he remains competent to set or maintain a maximum, but he can no longer do so without objective, testable and up-to-date substantiation showing why precisely this maximum is necessary. Setting or maintaining a maximum is therefore no longer a free policy choice, but a decision that must fully meet the requirements of the Awb.
No obligation, but administrative responsibility
It is important to recognise that operating a maximum system and the way in which it is handled is a policy choice of the municipality. In practice, municipalities give different shape to this policy room. Some municipalities, within a policy-based maximum, opt for stability and extension of existing tolerance statements and only open up the market when a place actually becomes vacant. Other municipalities explicitly choose not to operate a maximum and work with transferability.
This policy freedom is limited by the general principles of good administration, and in particular the proportionality principle as elaborated in the Harderwijk ruling. Case-law has not yet conducted such a test. That is the point that has not yet been settled in current coffeeshop case-law on scarce licences. What is clear is that the mayor''s discretionary power to set the number of licences has in effect been bounded: he can no longer do so without objective, testable and persuasive substantiation. Municipalities are not obliged to limit the licence duration of coffeeshops and to apply a scarce-licence regime. A limited licence duration is the exception, which must be supported by proper substantiation.
Direction without scarcity: standard-setting through the environment plan
This brings us back to the core. The mayor''s authority to set a maximum number of coffeeshops still exists, but it is not unlimited. A maximum can no longer be set or maintained without objective, testable and up-to-date substantiation. When such a ceiling is chosen, it must be made clear why precisely this number is necessary, what objectives it serves and why less far-reaching measures will not suffice.
It is precisely from this proportionality test that the question then arises whether the same objective could not be achieved by a less far-reaching instrument. In that light, standard-setting through the environment plan is an obvious option. The environment plan makes it possible to specify concretely where coffeeshops are permitted and under which siting and operating conditions they may function — for example with regard to spread, distance from sensitive locations and supervision (cf. ABRvS 6 April 2022, ECLI:NL:RVS:2022:1001). This allows targeted steering on public order, liveability and manageability, without having to operate an absolute maximum system that directly affects the position of existing operators. The environment plan and the General Municipal Bye-law (APV) complement each other: where the environment plan regulates spatial-planning permissibility, the mayor remains empowered through the APV to set operating conditions and to take enforcement action.
The difference is substantial. Where a maximum system creates scarcity and can have severe consequences for existing businesses, the environment plan offers a transparent, democratically adopted and enforceable framework in which siting and operation are regulated through spatial planning. The municipality retains direction over location, spread and conditions, while at the same time avoiding the use of an artificial ceiling whose necessity has to be demonstrated again and again.
The conclusion is therefore not that municipalities may not pursue coffeeshop policy or no longer steer on numbers. The conclusion is that a maximum system is no longer a self-evident policy instrument. What is clear is that the mayor''s discretionary power to set the number of coffeeshops has in effect been bounded: he can no longer do so without objective, testable and persuasive substantiation. If the goals of coffeeshop policy can also be achieved through spatial-planning standard-setting, that route is the obvious one to take. It gives municipalities a grip, without having to carry their authority on the back of an ever more heavily reasoned ceiling.
- ABRvS 30 April 2025, ECLI:NL:RVS:2025:1925 (Heerlen). ↩
- Policy rules of the mayor of the municipality of Den Helder concerning coffeeshops (Coffeeshop Policy Den Helder 2023). ↩
- Parliamentary Papers II 2016/17, 24 077, no. 409. Parliamentary Papers II 2022/23, 24 077, no. 491. ↩
- ABRvS, ECLI:NL:RVS:2025:1925. ↩
- ABRvS 13 September 2023, ECLI:NL:RVS:2023:3431 (Apeldoorn). ↩
- Europa Decentraal, "May a municipality grant a scarce licence for an indefinite period?" (practical question, on art. 10 and 11 of the Services Directive and the distinction with art. 12). ↩
- ABRvS 28 March 2025, ECLI:NL:RVS:2025:1925 (Heerlen). ↩
- VNG guidance on scarce licences, ch. 3.3, p. 15–16; cf. also that Article 12 of the Services Directive must be applied as a coherent regime. ↩
- General Administrative Law Act: art. 3:2 (careful preparation), art. 3:4(2) (proportionality) and art. 3:46. ↩
- Europa Decentraal, "May a municipality grant a scarce licence for an indefinite period?". ↩
- ABRvS 25 September 2024, ECLI:NL:RVS:2024:3732; Council of State, news item "Amsterdam must come up with different policy for passenger shipping in the city centre", 25 September 2024. ↩