Landmark Netherlands cannabis experiment set to begin this week

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The Netherlands’ cannabis cultivation and distribution experiment is set to kick off Friday in what executives are calling a milestone for the industry in Europe – even though the supply-chain trial is starting years later than originally planned.

In September, the Dutch Cabinet decided to give the startup phase of the Closed Coffee Shop Chain Experiment a start date of Dec. 15, 2023.

At the time, only two legal growers – Canadelaar and Fyta Group – had been authorized for delivery to coffee shops in the municipalities of Breda and Tilburg.

The program, which was supposed to involve 10 cannabis cultivators supplying dozens of stores, originally was intended to launch years ago.

Industry sources say the project faced delays in part stemming from:

  • The Meticulous Public Administration Probity Screening Act, which effectively involved corporate background checks.
  • Major challenges for selected growers trying to set up financing for their operations.

The Dutch government said the next two growers, currently unidentified, are expected to start supplying coffee shops in Breda and Tilburg in early 2024.

In the first phase, which is scheduled to start this week, about 19 participating coffee shops in Breda and Tilburg will be allowed to offer both legally grown cannabis and unregulated products.

After six months, in approximately June or July 2024, all participating coffee shops will have a transition period of about six weeks.

At the conclusion of the transition period, the participating shops will be allowed to sell only legal products.

For decades, “coffee shops” in the Netherlands have operated in a system where cannabis sales are legally tolerated but cultivation has been prohibited.

That effectively means consumers had no way to verify where their cannabis was grown, by whom, when and under what conditions.

A cannabis industry executive told MJBizDaily on condition of anonymity that the launch of the experiment represents a landmark for the industry.

“It is one of the first times in Europe you can show that a closed value chain from cultivation to retail can work,” the executive said, adding that the system gives consumers a new level of transparency that does not exist in the current coffee shop system.

The new experiment will introduce a track-and-trace system to provide more transparency.

Cannabis that is produced legally will come in a package with a QR code, which will give consumers access to information, including where and when the product was cultivated and by which company.

The experiment will last four years, at which time a decision will be made on whether it will be extended.