For municipalities

A numerical cap is an instrument with which a municipality seeks to achieve its policy objective. In adopting and applying policy, the general requirements of careful preparation (art. 3:2 Awb), adequate reasoning (art. 3:46 Awb) and proportionality (art. 3:4(2) Awb) apply. What may be relevant there includes the objective pursued with the cap, the facts and circumstances on which it rests and the consequences attached to it.

In assessing proportionality, suitability, necessity and balance may be relevant viewpoints. The Council of State set out its general line on reviewing proportionality in its ruling of 2 February 2022 (ECLI:NL:RVS:2022:285); the opinion of Advocate General Widdershoven of 6 June 2018 (ECLI:NL:RVS:2018:1847) offers an analytical framework for that and is an opinion, not a ruling.

A maximum is a policy instrument, not a policy objective.

Reversing that order — first the number, then the reasoning — makes the cap a starting point instead of a considered choice.

Where a municipality bases a cap on public order, nuisance or undermining, the link needs to be made explicit. For a convincing substantiation it is therefore relevant which connection exists between the problem identified and the number of points of sale, and why limiting that number can be expected to contribute to solving that problem.

Nuisance is often connected to location, layout, operation, supervision or the surroundings rather than to the number of establishments. Problems around illegal production or supply likewise do not automatically show that the number of tolerated points of sale is too high.

Illegal cultivation and illegal supply are closely connected to the back-door problem: sale at the front is tolerated, while supply outside the experiment is not regulated in the same way. Those problems follow from that design, and are not in themselves evidence that the number of tolerated points of sale is too high.

Reducing the number of coffeeshops does not address the supply side. It may push part of demand towards uncontrolled channels — this is not a fixed economic law, but it is a risk that works against the objective municipalities themselves formulate in their coffeeshop policy.

Phrases such as “this number strikes a good balance”, “this sufficiently meets local demand” or “this keeps negative effects manageable” may describe the outcome of a policy assessment, but without an underlying analysis they do not yet amount to a reasoning. They state the result, not the reasoning that leads to it.

Adequate reasoning makes that thinking visible: which data were used, which link was established, which alternatives were examined and why precisely this number follows from that. That is what art. 3:46 Awb requires. A policy document that only states the outcome does not allow the council and interested parties to review the assessment.

The necessity of a cap must not only appear from policy documents, but must also be capable of being tested against reality. Where a larger supply has existed for a longer period without the negative effects on which the cap is based demonstrably occurring, that is relevant information for the necessity and proportionality of the ceiling.

Conversely, concrete and documented nuisance may itself provide relevant factual substantiation. The point is not that a cap can never be substantiated, but that policy must rest on current facts and not solely on assumptions. Art. 3:2 Awb requires those facts to be gathered before the decision is taken.

Where a municipality creates scarcity by capping, legal obligations follow. That is not the same as saying the municipality is thereby obliged to redistribute existing coffeeshops periodically.

Case-law on scarce public rights entails requirements of equal opportunity in the distribution of scarce public rights, and of an appropriate degree of publicity that must be offered in good time before the distribution takes place. For capped tolerance declarations the Council of State has moreover held that the consequence of limiting the number of tolerance declarations, whereby they become scarce, is that they must have a limited duration (Heerlen, 30 April 2025, ECLI:NL:RVS:2025:1925).

Heerlen does not thereby say that all existing coffeeshop positions must be periodically redistributed by lottery. How a municipality deals, within its discretion, with the scarcity it created itself requires separate choices and independent reasoning. Our message to municipalities is therefore not that scarcity has no legal consequences, but that those consequences should not be stretched further than case-law supports.

The fact that many municipalities apply a capping policy does not automatically make such a cap necessary or proportionate in another municipality. Every municipality has its own local situation, population composition, geographical structure, existing coffeeshops, visitor flows and public-order practice.

A reference to the practice in other municipalities may support the reasoning, but does not in itself explain why a particular maximum is appropriate in the municipality’s own local situation. The question remains why a numerical restriction is necessary here and why precisely the chosen number is appropriate.

The internal coherence of the policy is relevant to the persuasiveness of the reasoning. Where a municipality states in its own policy that tolerated coffeeshops contribute to limiting uncontrolled street dealing or to separating markets, while at the same time wanting to reduce the number of points of sale in order to combat that same street dealing, that combination calls for explanation.

A statutory power, a national directive or a national policy framework may create room to use a particular instrument. That does not automatically make the concrete exercise of that power necessary, proportionate and adequately reasoned.

Competence is not the same as justification.

This matters for references to national frameworks, to the Opium Act Directive and to municipal powers in general terms. We do not argue that a national framework prescribes free establishment; that conclusion does not follow from it. Our message is solely that room to cap is not the same as substantive justification for every local cap. That justification must be provided per municipality and per decision.

An operating licence, a tolerance declaration and the planning admissibility of a coffeeshop are different legal instruments, each with its own framework.

The sale of cannabis is governed by the tolerance declaration. Case-law confirms that this declaration is not a licence within the meaning of the Services Directive. That matters, because municipalities cannot present their choice for temporary permissions or redistribution as an obligation flowing directly from the Services Directive.

The operating licence concerns the running of the establishment and has its own legal framework. The environmental plan, in turn, determines where a coffeeshop is spatially permitted. Precisely by distinguishing these instruments, room emerges for a different design of local coffeeshop policy.

Many coffeeshop operators have built their business over decades and are now approaching retirement age. Where continuation or transfer is made more difficult by policy, business succession can become practically impossible and accumulated enterprise value — including operators' pension provision — can come under pressure.

Moreover, the disappearance of an existing operator does not affect the entrepreneur alone. The consequences extend to employees and to the continuity of the business. If the position is lost the business may cease to exist, while a new operator does not necessarily have a suitable location available or can open its doors immediately. A municipality that opts for temporary positions and periodic redistribution must genuinely take those consequences into account.

This does not mean a successor is entitled to a transfer of the existing tolerance declaration. What is relevant is which effects the chosen system has on business succession, and whether those effects were included in the balancing of interests.

The consequences are not limited to the legal question. Operators who have to compete again for their existing position face new application procedures, evidentiary obligations, costs and uncertainty. Policy changes also regularly lead to objection and appeal proceedings.

This is in tension with the national course on entrepreneurship. The national government agreement aims at reducing regulatory burden, stable and predictable policy for entrepreneurs and faster permit procedures, and records that the business succession scheme for family businesses will not be curtailed. Local coffeeshop policy should therefore also address which additional burden and uncertainty a new system creates, and whether those burdens are genuinely necessary for the policy objective.

We do not claim that a municipality can never opt for a cap. We do believe that this choice must be made and substantiated up front, instead of treating the existing number as an untouchable starting point.

A municipality that wants to cap will have to make clear which concrete policy objective is served, which current facts support the cap, why precisely the chosen number is suitable and why less intrusive measures do not suffice. The consequences for existing businesses, employees, investments and business succession must then genuinely be included in the proportionality assessment. Only after that does the question arise which legal consequences should be attached to the scarcity thus created.