The Dutch Tolerance Policy
The New Opium Act was implemented in the Netherlands in 1976, which was to lead the way for the so-called ‘Policy of Tolerance’. Initially, the policy was meant as a first step towards full regulation of soft drugs - although here we are 40 years later with very little progress.
As it stands, personal use is technically illegal but is tolerated in small amounts for Dutch citizens. Specifically - carrying a maximum of five grammes or cultivating no more than five plants is acceptable. The private sale of cannabis is also illegal - although this is tolerated in the case of coffee shops as long as the proprietor adheres to certain rules:
- No selling of ‘hard drugs’ (cocaine, heroin, ecstasy etc.)
- No selling to anyone under the age of 18
- Not being a nuisance to the local community
- No shops to be opened within a 250-metre radius of a school
Today, Amsterdam is known globally as a haven for recreational cannabis. People travel from across the world to experience its famous coffee shops. This culture has become so entwined with the tourism industry that any change in tolerance would have a significant impact on the city’s economy. However, despite the perceived liberal outlook, the overall Dutch approach to cannabis - much like the rest of Europe - is not without its rules and restrictions.
Bizarrely, it has always been illegal for coffee shop owners to grow the amount of cannabis plants they need to meet demand. Of course, this forces them to turn to so-called ‘back-door’ sales (black market) which in turn perpetuates Amsterdam’s reputation as a global hub for illegal drugs. However, this situation looks set to change with a bill that was put forward by the progressive D66 party and supported by the part-ruling Labour party earlier this year. It will effectively allow the government to regulate the supply of cannabis to coffee shops, which will then stifle dependency on criminal networks.
Unsurprisingly Holland has been somewhat of a pioneer in using cannabis as a treatment. The Ministry of Health, Welfare & Sport even has a subsidiary, known as the Bureau For Medical Cannabis (BMC), which has been ‘responsible for the production of cannabis for medical and scientific purposes’ since it was first legalised in 2003. In spite of this, the Dutch medical cannabis industry somehow still appears to be in its infancy.
More than 2,000 pharmacies nationwide have been legally required to stock medical cannabis and must provide instructions and advice regarding methods of consumption. Yet many doctors are still not educated as to the therapeutic benefits of cannabis and therefore rarely offer it as a prescription.
Unfortunately, over the last year, changes to insurance policies have meant cannabis-based treatments are now more difficult for patients to acquire. This came on the back of a review by the National Health Institute (Zorginstituut Nederland). This is the body that officially advises government and insurers on the impact and financial feasibility of different medications. Quite unbelievably, they concluded that there are no conditions for which medical cannabis can be considered a suitable treatment. This decision lead to a number of health insurance companies withdrawing cannabis from their policies and subsequently leaving patients without the effective and often irreplaceable pain relief that cannabis is known to provide.
Distribution & Exportation
Dutch company, Bedrocan, has a license from the BMC to export cannabis medication to other countries (and has done so to Italy, Germany, Finland, Canada and the Czech Republic). However, with a growing number of countries reforming cannabis laws, and companies in the likes of Canada and Israel ready to export globally, Holland’s share of the export market is set to slow down.
One potentially lucrative route to market is hemp. In the Netherlands, it is completely legal to cultivate and process industrial hemp containing less than 0.3% THC. It was thanks to this that Ben Dronkers was able to establish his company Hempflax in 1994. Today, the company has flourished internationally, with 550 hectares in Germany and 700 in Romania to add to the 450 hectares now under production on Dutch soil.
Another promising sector lies in the seeds themselves. Thanks to the 40+ years of legal personal and industrial cultivation, the Dutch have a unique pool of data and understanding when it comes to DNA and genetics. The challenge will be protecting this IP over the coming years.
Opportunity for Growth
The Netherlands, and more specifically Amsterdam, is a world-renowned global hub of cannabis culture, but the Dutch are no longer the industry leaders that they once were. However, decades of experience in cultivation and R&D means this country is still in pole position in Europe - whether that be on the genetics side or as an exporter to neighbouring nations as laws are gradually reformed. A good example is the exception that has been made to increase the standard legal export limit of 100 kilos to 350 kilos specifically for the German market. This will then increase to 700 kilos over the next two years.
Bedrocan recently became the first medical cannabis producer in the world to receive the European Medical Agency’s seal of approval for Good Manufacturing Practice (GMP). As a result, they are now set to increase their production by more than double - from 1,400 kilos to an estimated 3 tonnes. This will certainly help them keep abreast of the competition as the market grows.
We believe Amsterdam’s culture and reputation as a much loved cannabis destination / brand, the decades of knowledge and experience that the industry has and the necessary regulatory reform will ensure this country is at the forefront of the European legal cannabis industry for many years to come.