Could Amsterdam’s days as a cannabis capital be numbered?

On an average night in Amsterdam’s De Wallen district, the streets are filled with tourists – often doing their worst.

“We are faced with people vomiting, screaming, peeing, pooping,” said Arjan Welles, until now a resident of the district. “This part of the city has only one purpose – to please the tourists.”

Tourists come to De Wallen – better known as the Red Light district – for many reasons: sex fairs, bachelor parties, pub crawls. But one attraction has proven to be greater than all: a good coffee shop in the city, where legal marijuana has been sold to tourists for decades.

A new survey found about half of the city’s 20 million annual visitors say visit a coffee shop is the main reason to travel to the city – supporting an industry worth almost €1 billion ($1.4 billion), according to one estimate.

For Welles, and his advocacy group Stop the Madness (Stop the Madness), the coffee shop became a problem, contributing to the free party atmosphere for the entire district. But they don’t want to see cannabis banned – instead, they want Amsterdam to enforce the so-called law i-criteriawhich will limit sales to local residents only.

Although petition with hundreds of supporterslong debate in the council, and the full backing of the city mayor and police chief, the initiative failed to pass again this fall because concerns could lead to an explosion in the black market.

However, there are reasons to believe that the era of drug tourism in the city may be coming to an end.

Amid a wider trend towards legalization in Europe, the Netherlands is reassessing its relationship with cannabis – and potentially upending the coffee industry in the process.

Back door problem

Since it was first popularized in the Netherlands by American GIs and jazz musicians, the use of marijuana has been legally tolerated in the country, to some degree, since the 1970s.

First, this tolerance led to the proliferation of coffee houses – more than 500, at one time, in Amsterdam alone. In the anarchist era of the 1980s, Henry Dekker, who now owns five coffee shops, started.

“A sheet of wood and some crates, it’s a bar,” he said. “The coffee shop was really a hideout for the unemployed … to rest between fights with the police. It was a rebellious environment.”

In the 1990s, the Dutch attitude changed to increase the police, and the coffee shop industry quickly became professional. Today, “customer types are more common,” Dekker says. “We see young and old from 18 to 88, men and women.”

But there is a problem. Selling and consuming cannabis is legal in the Netherlands, but growing it, or possessing more than half a kilo, remains illegal. That makes supplying coffeeshops with products that are criminal companies – known in the Netherlands as “back-door problems.”

The Netherlands, in my opinion, has been abandoned.– Onnick Jessayan, founder of Greenmeister

“It’s always like this cat-and-mouse game,” says Onnick Jessayan, a cannabis industry insider and founder Greenmaster, an app that offers reviews of coffeeshops and cannabis strains. “Dutch cannabis dispensaries are still forced to buy from the black market.”

according to one impact report from the City of Amsterdam, this legal loophole has encouraged connections with organized crime, who find in coffeeshops a convenient way to convert black market cash to legal income. “There is no faster way to launder money than to have a coffee shop,” said Robbert Overmeer, an Amsterdam resident and advocate for i-criteria.

Meanwhile, owners like Dekker, who are trying to run a legal business, are taking significant risks. In 2021, he facing criminal charges and lost 45 kilograms of stock to have more than 500 grams of the legal limit, despite the legal shop selling “10 or 20 kilos per week.”

Stocking the store, he says, is like a “James Bond operation you have to do every week,” which includes shady deals in apartment parking lots. A hold-up could mean the store is forced to close – and 70 employees suddenly out of work.

The backdoor issue is also a hurdle for investors. Dekker said more and more foreign companies want to buy into the market – but they “want to buy a place, a name, without participating,” he said, “because the law in the Netherlands is not up to that standard.”

This has caused some of the cannabis industry to feel pessimistic about its future in the Netherlands.

“Nelanda, in my opinion, has been abandoned,” said Jessayan. At fairs across Europe, he encountered cannabis growers and marketers who could treat the product like “craftsmanship, like … a Swiss knife or chocolate.”

“This is what the Netherlands can have, if they just embrace the cannabis culture,” he said. “But they don’t. They always see it as something illegal.”

Legal cannabis – but when?

After decades of tolerance, the Dutch government may be ready to crack down on cannabis – within the limits of government programs.

In 2019, the government laid the foundation for what it called “a controlled cannabis supply chain experiment”: a four-year pilot project involving ten government-licensed farmers who will supply coffee shops in ten medium-sized municipalities.

As in Canada, growers undergo quality tests and strict legal requirements while facing establishment costs that can run into the tens of millions. Unlike in Canada, it can only be implemented for four years if the experiment goes as planned.

“It’s another step into the dark, a bit braver,” said Alistair Moore, who consults, Hanway Associates, works with several licensed growers in the Netherlands. “There’s a lot of pressure for those ten licenses.”

The experiment got off to a rough start. Delays in selecting farmers, completing background checks and producing enough stock mean that it will not start before 2024.

Still, Moore and others see reason for optimism. Ralph Blaes, a founding member of the Linsboera licensed grower based in Lelystad, said the delay because the government wants “to maximize the chance of success.”

Unlike Canada, Blaes said, the Dutch government is rolling out legalization slowly, in select markets, to encourage a variety of suppliers with a guaranteed market for their products.

“They are not the fastest, the Dutch government, but they are doing it strongly,” he said.

Others are more skeptical. Jessayan, with Greenmeister, is concerned about the strain’s limited availability compared to the black market. Dekker, the owner of the coffee shop, fears that small-scale farmers who take the risk to supply him will be “driven away.”

Besides, he says, “it’s better to do it on a small scale – where people play classical music for the plants, instead of filling them with fertilizer.”

The last day of the drug capital?

The Netherlands not alone in reimagining the relationship with cannabis. Germany, Czech Republic, Switzerlandand Luxembourg all are on the road to legalization or moving forward with their own pilot projects for legal supplies. Malta is legalizing cannabis last year.

For cannabis industry insiders like Moore, this is a sign that “the consensus has changed in Europe – this is not something we can do, and this is not something we can ignore.”

Moore hopes the result is a more “mature” conversation, about how “legalization is not only for people who like marijuana and want to be seen in society, but also for people who don’t like it.”

That includes people like Welles and members of the Stop the Madnesswho still hopes Amsterdam will do everything possible to make it “less attractive to come to the Netherlands just for cannabis.”

With bigger neighbors like Germany ready for the legalization of marijuana in 2024may not take it i-criteria to complete it. One way or another, Amsterdam’s days as the capital of medicine may be numbered.