Village Farms starts building cannabis facility for Netherlands pilot program

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Village Farms International has started building an indoor cannabis production facility in Drachten, Netherlands, which will supply the country’s cultivation and distribution experiment that started in December.

The Vancouver, British Columbia-headquartered company has one of the Dutch licenses via its majority-owned subsidiary, Leli Holland, permitting Village Farms to legally produce and distribute recreational cannabis.

Village Farms is planning to start production in the fourth quarter of 2024.

The company said it’s financing the build-out of the facility from cash on hand, and Leli Holland plans to sell flower and hash products in various formats, including pre-rolls.

“As a limited license market with a long-established consumer base and a cannabis-friendly regulatory environment, the Netherlands represents a very attractive near-term opportunity in our international cannabis strategy,” Village Farms CEO Michael DeGiglio said in a statement.

“Our two-phased approach to ramping up production enables us to enter the market in a timely and capital efficient manner in line with the roll out of the Dutch program.”

The Drachten facility is expected to have a capacity of up to 2,500 kilograms (5,511 pounds) of dried flower annually.

It is the first of two facilities Village Farms plans to use to supply the Netherlands market.

The second facility will be located in Groningen, about 25 miles east of Drachten.

That larger building has a planned production capacity of up to 10,000 kilograms annually, with production beginning as early as 2026.

The Netherlands’ cannabis cultivation and distribution experiment started in December, years later than originally planned.

The first phase of the trial involved approximately 19 participating coffee shops in Breda and Tilburg.

Those stores are allowed to offer both legally grown cannabis and unregulated goods for six months, after which they must start transitioning to selling only fully regulated products.

The experiment is intended to determine whether and how controlled cannabis can be supplied in regulated channels to existing retailers, known as coffee shops.

Coffee shops in the Netherlands have for decades been operating in a system where cannabis sales are legally tolerated but cultivation has been prohibited.

The experiment is planned to last at least four years.

At least three cultivators are currently delivering products to the coffee shops in Tilburg and Breda.

The Ministry of Health, Welfare and Sport told MJBizDaily it will not reveal the names or locations of selected cultivators, citing security concerns.