NL: Dutch experiment on cannabis supply chain to kick off application process

After many years during which the cannabis industry in the Netherlands has been navigating a grey area, from the first of July, the Dutch experiment on a regulated cannabis supply chain will finally kick off the application process.

The experiment will involve ten municipalities where cannabis will be grown. Growers that are interested to join will have to apply between July 1st and July 28th. The application consists of five parts, which includes: general info such as residency requirements; cultivation location information; a cultivation plan describing how a grower is going to grow at least 6,500 kg per year; a business and a security plan. The Dutch government thinks that it will take approximately six months to select the 10 participants.

Thomas Rau is the founder of the Legal Cannabis Coalition, whose mission is to support companies to enter the regulated market thanks to the support of the suppliers involved in the Coalition. “When you as a company, or as a person, have been following the idea of this experiment since its inception, the things required by the applications were expected,” he says. “At the same time, the people who haven’t been involved in this will hardly manage to present the application in time.” Thomas specifically mentions the window within which said application needs to be handed in. “You only have roughly seven weeks to put this together: you need to find a location, do the financial homework, build your business and growing plan; it is almost impossible to do this if you haven’t started doing this well in advance.”

What makes the Dutch experiment really interesting is the amount of cannabis that growers are expected to produce every year. “The big question then is how many foreign companies are interested in this tender,” Thomas points out. “If you look at the last two years of legalization in Europe, you have countries like Denmark, Germany, Portugal and Italy which only allow medical cannabis. But if you also look at how things have been progressing there, the first facilities have been completed only in Denmark and Portugal, and these are only a few; in Germany, for instance, they are still building. What puts the Dutch experiments ahead of these other countries is the amount of cannabis to be produced each year. Usually, in Europe this has been only in terms of hundreds of kilos, while in the Netherlands it is going to be more than 6,000 kilos per grower.”

“Therefore, I expect that many foreign companies will apply,” Thomas points out. “But I also think that a lot of Dutch growers would like to participate. However, not all of them have experience with growing cannabis. Thus, if you haven’t been preparing in detail what is recommended, it will be very hard to compete with these companies coming from abroad. This not only for the growing, but also for the drying, packaging, and distribution. If you have no experience at all in any of these things, then it is extremely hard to get ready.”