On Tuesday, the Dutch Justice Ministry announced that growers who wished to take part in the Dutch government’s regulated marijuana experiment can sign up to apply from July 1. The project, which will see a maximum of 10 growers licensed to produce a variety of marijuana products, has been designed to remove the gray area surrounding coffee shops. Although they have permits to sell marijuana, most of them rely on an illegal circuit of suppliers as production and distribution of marijuana is prohibited.
“The government wishes to initiate an experiment involving the cultivation of cannabis for recreational use. The purpose of the experiment is to ascertain whether or not it is possible to regulate a quality-controlled supply of cannabis and to study the effects of a regulated supply chain on crime, safety, public nuisance, and public health,” says the government website. The experiment will last four years with an option of extending it for another one and a half years.
For a prospective grower to be eligible, they must be a resident of the Netherlands or a legal entity with a Dutch address. They must already have a business location in the Netherlands or a location in mind where they want to grow the marijuana. They will also be required to submit an application form containing a Certificate of Good Conduct, the cultivation location, and their cultivation plan. The plan will outline how many pounds of marijuana they plan to grow on an annual basis and how many variations they expect to produce.
They will also be required to submit a business plan detailing how they want to organize their business operations and administration as well as a security plan showing how they intend to keep their marijuana safe and transport it to the coffee shops they will be delivering to. According to officials, it will take up to six months to select the 10 growers who will take part in the experiment. The trials are due to start in 2021, and ten local authorities, including Breda, Almere, and Tilburg will be taking part.
However, the four biggest cities in the country have declined to be part of the experiment citing numerous issues with the proposal, such as the limited four-year window which will not be extended even if the program is successful. Additionally, the requirement that all coffee shops within a council area have to participate in the program will make control and oversight impossible as places like Amsterdam have over 150 coffee shops. The shops will also be prohibited from selling foreign marijuana which currently makes up 25% of sales.
This is an experiment that North American marijuana companies like SinglePoint, Inc. (OTCQB: SING) are likely to watch closely as its lessons could be picked by other jurisdictions, such as the U.S. federal government, taking a lot of flak for not implementing a regulated cannabis industry.
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