The Dutch Cannabis Experiment: an update on recent developments and challenges

1 JULY 2024 | NEWS

The Closed Coffeeshop Supply Chain Experiment aims to regulate the production and sale of cannabis and hashish in coffeeshops. A letter to parliament in December 2022 announced that a lead-in phase in Breda and Tilburg was expected to start by the end of 2024. In this phase the chain and all related processes and systems are practised on a small scale. This article covers the lead-in phase and its conditions, the possible participation of Amsterdam, and the designation of the tenth grower.

Lead-in phase: what does it mean?

The transition phase announced for 2024 was a delay compared with the previous schedule. According to the most recent grower planning, it was the first point at which the quantity, quality and diversity of the produced cannabis and hashish would be sufficient. From the transition phase onwards, participating coffeeshops may sell regulated cannabis and hashish alongside the tolerated supply. Six weeks later the experimental phase begins, at which point only regulated products may be sold. It is therefore essential that supply is sufficient from the start of the transition phase.

The lead-in phase is intended to practise the chain on a small scale and gain experience before the experimental phase begins. In this phase regulated cannabis and hashish is supplied on a small scale to participating coffeeshops in Breda and Tilburg — supply does not yet need to meet full demand. This allows concrete steps to be taken despite earlier delays.

A number of mayors, the Inspectorate for Justice and Security, several growers and coffeeshop owners see the benefits of a lead-in phase. The same parties also raised concerns:

a dual enforcement regime (500 g tolerated and 500 g regulated stock in the coffeeshop),
a possible market advantage for growers able to start earlier,
differences that may emerge between coffeeshops in Breda/Tilburg and the other municipalities,
possible reputational damage if the quality of products proves insufficient.

The police and the public prosecutor raised considerations and questions for the ministers, pointing to the risks of two enforcement regimes — how enforceable is a dual regime, how can it be effectively supervised, is legal certainty maintained and does such a regime invite abuse? They also note that the temporary presence of two flows in the coffeeshop does not fit the essence of a closed decriminalised coffeeshop chain. The police and public prosecutor stated that this is a political-administrative experiment, that they will implement the decision and fully commit to their role.

The concerns were addressed by setting restrictive requirements and conditions for the lead-in phase: the scale is limited, developments are monitored, and early termination is possible.

Aim and schedule

In the meantime, coffeeshops in the other participating municipalities may not yet sell regulated products. During the lead-in phase parties can gain experience with the delivery of cannabis and hashish and the related supervision — including matching supply to demand, secure transport and use of a track-and-trace system. The experience will be shared with all participating municipalities and coffeeshops. Improvements can be made during the lead-in phase so the start of the transition and experimental phases in all municipalities can run more smoothly.

Based on the most recent grower planning, the start was expected in the fourth quarter of 2023. The lead-in phase ends when the transition phase begins in all participating municipalities — expected in the first quarter of 2024. The ministry remains in talks with growers to determine whether the lead-in phase can actually begin at the end of the year.

Requirements and conditions

All requirements from legislation and regulation that apply to regulated cannabis and hashish during the transition phase also apply during the lead-in phase — for example, secure transport, the track-and-trace system and adequate security of coffeeshops. Coffeeshop owners in Breda and Tilburg are, during both the lead-in and transition phases, not obliged to take regulated products. They may continue to stock and sell the tolerated supply under the conditions of the tolerance policy. National and local supervisors will make arrangements about responsibilities and the implementation of supervision.

In line with the goal of practising on a small scale and addressing the concerns above and the legal possibilities, the scope of the lead-in phase is restricted in several ways:

It takes place in two coffeeshop municipalities, Breda and Tilburg. Growers may only deliver to coffeeshops there. A limited geographical scale is necessary for the required supervision. Breda and Tilburg were chosen because the initiative came from the mayors of those cities.
The maximum stock of regulated products is limited to 500 grams during the lead-in phase. In addition to the 500 g of tolerated stock allowed under the tolerance policy, coffeeshops may hold 500 g of regulated stock. This will be set out in local regulation. From the transition phase, coffeeshops may hold a week's stock of regulated cannabis and hashish, unless the mayor decides otherwise under Article 12b of the Decree on the experiment.
The lead-in phase only starts when at least three growers are ready to supply coffeeshops and the transition phase is expected to start no more than six months later. With at least three growers, operators can choose between different suppliers. There is no maximum number of growers — once a grower is ready, they can join. The aim is for the lead-in phase to last no more than six months.
Developments are monitored during the lead-in phase, and the phase can be ended early if necessary. Because municipalities have the clearest view of any emerging risks, the mayor, public prosecutor and police consult periodically (within the local triangle). If the lead-in phase seriously endangers public order or safety, the phase can — in consultation with the mayors — be ended. This decision is then implemented by reducing the permitted regulated stock from 500 to 0 grams.

Possible participation of Amsterdam

The coalition agreement set out that the experiment would be expanded with one major city. In earlier letters, the Ministry of Justice & Security informed parliament that mayors of municipalities with more than 100,000 inhabitants were invited to express interest in participation.

Amsterdam has indicated the conditions it sets for participation — including that the experiment should not lead to an increase in street dealing and that the supply of participating coffeeshops should remain at previous levels. Amsterdam also wants clarity in advance about the financing and implementation of the experiment.

Amsterdam is an important player in the Dutch coffeeshop market. Adding a major city makes a meaningful contribution to the experiment. Under the criteria of 100,000 inhabitants and at least 10 coffeeshops, three city districts qualify: Zuid, Oost and West. The municipality has not yet decided on the chosen district — a decision is expected by mid-June.

Designation of the 10th grower

The designation of the tenth grower is an important step in the progress of the experiment. With this, the expected cultivation capacity for regulated cannabis and hashish is sufficient to start the experiment. The growers will produce regulated cannabis and hashish for the participating coffeeshops during both the lead-in and experimental phases. The growers are located across different regions of the Netherlands.

The Bond van Cannabis Detaillisten (BCD) and the participating coffeeshops continue to follow developments closely and will report on next steps via this knowledge platform.