The Netherlands is famous throughout the world for its trailblazing attitude toward cannabis consumption.  However, despite its reputation in popular culture as an open cannabis haven, the Netherlands still criminalizes aspects of the cannabis trade and has a strict regulatory structure for its famous “coffee” shops.  As other countries, states, and municipalities legalize aspects of cannabis sale and consumption, they may look to the Dutch experience for an example of an existing system that tries to balance some of the many completing legal, regulatory, political and cultural interests.  

In this post, we will describe the legal framework that underpins the Dutch cannabis market.  In a follow-up post, we will review the regulations that govern the coffee shop system the Dutch have created to handle cannabis sales and consumption.

At a high level, the Dutch Opium Act (the “Opium Act”) criminalizes the sale and possession of certain drugs.  The Opium Act distinguishes between drugs with an unacceptable risk to public health (hard drugs, List I) and other drugs (soft drugs, List II).  The Opium Act places cannabis on List II.  Although the Opium Act still prohibits the possession, cultivation, sale, and export of List II drugs, including cannabis, the legislation distinguishes between “hard” and “soft” drugs based on the risks associated with their use.

Tolerance Policy

Although cannabis remains broadly criminalized through the Act, cannabis consumption is not prohibited, although possession is.  To help regulate cannabis consumption, the Dutch College of Procurators General, the highest prosecutor’s office, has issued national guidelines for compliance with the Opium Act. The national guidelines state that if a retailer (i.e., a coffee shop) complies with specific conditions, there is no need for the police or the judicial authorities to take action against the sale of cannabis by the retailer.  This means that those cannabis sales are tolerated, though still technically illegal.  This lack of action by the police and the judiciary is referred to as the Tolerance Policy (”Gedoogbeleid”).  Local Public Prosecutors may deviate from these guidelines, but they are usually followed.

The idea behind the Tolerance Policy is to facilitate a more controlled sales channel and prevent cannabis users from being exposed through uncontrolled sales channels to hard drugs that pose greater health risks.  This tolerance policy expressly does not apply to the sale of cannabis products from other business premises such as cafés, shops, delivery via a courier or taxi company, mobile phone orders, mail orders or from homes.

Consumption and possession

The Netherlands may have determined that its public health interests outweigh its law enforcement interests, but the Tolerance Policy does not change the underlying law.  The Opium Act prohibits the possession, cultivation, sale, and export of soft, List II drugs.  Therefore, a person could be prosecuted for possession even if he/she could not be prosecuted for consumption.

The College of Prosecutors has issued guidelines on how the Opium Act should be interpreted.  The guidelines state which cases the government should prosecute and what penalties should be imposed.  These guidelines state that possession for personal use does not need to be prosecuted.  For cannabis, the guidance limits possession for personal use to 5 grams or 5 plants.  However, the police are under no obligation to enforce this law and can simply confiscate cannabis possessed in excess of the personal use limitations.

Medical cannabis

In addition to its coffee shops, the Netherlands is also known for its production and supply of medicinal cannabis to pharmacies and scientific institutions. Oversight of this process is the responsibility of the Office of Medicinal Cannabis (”Bureau voor Medicinale Cannabis” or ”BMC”).

The BMC, established in 2000, handles the cultivation of medicinal cannabis, particularly to the quantity produced. The Opium Act contains provisions that stipulate that the government must provide sufficient cannabis for medical and research purposes. In September 2003, medicinal cannabis became available for the first time in pharmacies.

The government awarded the concession to produce medicinal cannabis to Bedrocan, a company in Emmeloord, the Netherlands.  The BMC buys the entire harvest, 80 to 100 kilograms per week, and supplies it to pharmacies and hospitals.  More than half is intended for export and goes to patients in Germany, Italy, Poland and other countries.  Bedrocan has a monopoly in the market, since they are the only supplier allowed to produce medicinal cannabis for the government.

In 2016, the number of dispensations of medicinal cannabis increased considerably because, in addition to the dried version, medicinal cannabis oil became available with a prescription.  The number of dispensations of cannabis oil accounts for almost half of all medicinal dispensations by pharmacies.

With its decades of experience, the Netherlands has confronted many of the challenges facing governments that are now joining the wave of cannabis legalization.  In the next post, we will see how the Netherlands has regulated its coffee shops, which are the retail front of the Dutch cannabis market.


Frenk Huisman co-heads the Real Estate Practice in Baker McKenzie, Amsterdam. He mainly acts for international investors, developers and corporates in the financial, TMT and energy and infrastructure sectors in real estate and construction law matters. Frenk is ranked and recommended as a leading practitioner in Chambers and Legal 500.


Ceyda Alkan, an intern in Baker McKenzie's Amsterdam office, contributed to this article.


John Kosmidis is a partner in the Washington, D.C. office where he specializes in internal investigations and government enforcement actions.