The Netherlands’ “coffee” shops are retail stores where the Dutch government tolerates cannabis sales for personal consumption.  In our prior post, we explained the basic legal framework around cannabis in the Netherlands.  Here, we will discuss how the country has implemented its coffee shop system.  Through the Tolerance Policy we previously described, the government allows coffee shops to sell cannabis under strict conditions and will not prosecute them if those conditions are met.  

In order to open a coffee shop in the Netherlands, the owner needs both an operating licence and a Declaration of Tolerance (and a license to deviate from zoning regulations to the extent applicable). The operating licence, if mandated by the locality where the coffee shop will be located, is governed by local General Bye-Laws.  Because coffee shops will sell cannabis, a prohibited List II soft drug pursuant to the Opium Act, they also must obtain a “Declaration of Tolerance,” which indicates that the municipal government and law enforcement agencies will not take any enforcement action against the shop owner. The Declaration of Tolerance together with the other license(s) are issued by the executive of the relevant municipality.  

The coffee shop owner must also follow Dutch zoning regulations, which generally require that the coffee shop be established as a hotel and catering facility.  The owner can apply for an exemption from this requirement, but the zoning regulations mandate that the shop must have the same zoning impact that would be expected from a shop that sells coffee beverages, such as a café or snack bar.  The locality cannot approve and regulate a cannabis store, since cannabis sales remain prohibited under the Opium Act, and the zoning submission and approval must therefore focus on the alternative functions.

In order to sell cannabis, coffee shops have to comply with specific rules related to the Tolerance Policy. These rules are also called the AHOJGI criteria, as explained below.

  • No posting or advertising (A). This means no advertising other than an indication on the façade that cannabis is for sale;
  • No hard drugs (H). No hard drugs may be sold in a coffee shop;
  • No nuisance (O). Nuisance is understood to include: noise nuisance, pollution and/or customers gathering in front of or near the coffee shop;
  • No sales and no access to young people under the age of 18; (J)
  • No sales of more than 5 grams per day per person and only a limited trading stock (no more than 500 grams); (G) and
  • No sales to non-residents. (I)

In order to avoid and mitigate public nuisance, localities may impose additional requirements on a coffee shop, such as limited opening hours or a greater distance (250 metres) from schools. Localities are also free to use a distance or other location criterion based on the local situation. In this way, localities can take additional measures appropriate to the specific local circumstances.

Supervision and Enforcement

The local government has authority over the coffee shop.  This means that the local government determines the locality’s coffee shop policy – within the guidelines of the Opium Act – and is in charge of it.  The city mayor (”burgemeester”), the local police, and the prosecutor’s office establish the concrete implementation framework for the coffee shop policy and set priorities for day-to-day enforcement.  An enforcement arrangement among the local administration, the police, and the Public Prosecutor’s Office forms the basis for administrative and criminal enforcement priorities.

The locality can decide that it will tolerate no coffee shops.  In localities that do not choose the zero tolerance option, its coffee shop policy will provide for a maximum number of coffee shops.  The locality will also take into account residents’ concerns.  In addition to the AHOJGI criteria, localities may formulate additional regulations with which coffee shops must comply. These regulations form part of the local coffee shop policy and can be included in an operating licence or a Declaration of Tolerance.  Compliant companies will not be subject to criminal proceedings.

However, the sale of List II soft drugs remains technically illegal.  If coffee shop owners do not abide by the applicable regulations, including the AHOJGI criteria, the government can criminally prosecute them, and the city mayor can (temporarily) close the coffee shop. 

Practical enforcement lies primarily with the mayor, who can exercise his/her power to shut down the shops pursuant to Article 13b of the Opium Act, which includes an administrative enforcement power that the mayor can exercise if drugs are sold, dispensed or delivered in dwellings or premises or on (adjacent) public grounds. This authority can also be used against coffee shops that do not comply with the local regulations.  The mayor’s authority does not in any way preclude other criminal law enforcement.

In short, the Netherlands has established a framework for permitting, supervising, and enforcing regulations against its coffee shops.  It has done so despite keeping cannabis on its list of illegal drugs.  While there is a national policy of cannabis sale and consumption tolerance, the Netherlands has delegated most authority to the locality where the coffee shop will be located.  The locality controls where the coffee shop can open, what shops must do to comply with local regulations, and can close any coffee shop that runs afoul of those laws.  This means that localities have control over what happens in their borders, but it also means that there is no one set of regulations governing all Dutch coffee shops.


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.