Hey there, fellow investing pioneers!
It’s Peter Burke, and today we’re diving into a groundbreaking development in the world of cannabis that’s set to revolutionize the market in the Netherlands.
The land of windmills and tulips, famous for its “coffeeshops,” is about to embrace a new era of legitimate cannabis commerce.
Buckle up, because this is an opportunity you don’t want to miss.
For decades, the Netherlands has maintained its unique stance on marijuana, allowing the sale of small quantities in coffeeshops while technically keeping cannabis possession and commercial cultivation illegal. However, this is all about to change come mid-December.
A select group of three officially approved companies will soon be authorized to domestically grow and supply marijuana to these iconic coffeeshops.
Now, you might be wondering, “What’s the big deal?”
Well, let me break it down for you.
The underground cannabis market in the Netherlands currently thrives at an estimated €1.3 billion annually.
But with the introduction of regulated sales, researchers predict that the first year alone could rake in €158 million.
If this trial succeeds, we’re looking at the Netherlands swiftly becoming one of Europe’s largest legal cannabis markets, with projected sales exceeding €250 million by 2027 in participating cities.
Years of pressure from mayors, campaigns, and growers have pushed the government to reconsider its stance on cannabis.
The Netherlands has been at a standstill for too long, and now the tides are turning.
Coffeeshop owners like Rick Brand in Breda are welcoming this change with open arms, recognizing that selling cannabis should never have felt criminal in the first place.
So, what’s in it for investors?
Well, this pilot program is set to start small, with three initial growers supplying coffeeshops in Breda and Tilburg.
But by the end of the first quarter of 2024, it will expand to nine more cities, including parts of Amsterdam.
Coffeeshop owners will be required to buy exclusively from sanctioned producers, creating a closed system that aims to control the entire cannabis supply chain.
Dutch Health Minister Ernst Kuipers explains that the goal of this pilot is to assess the impact on the illegal market, crime, public health, and usage.
It’s a move toward greater control and regulation, much like what we’ve seen in Canada, where legalization has brought substantial economic benefits without a significant uptick in usage.
But it’s not all smooth sailing for these pioneering cannabis companies.
Delays, bank account issues, secure transportation, and rising costs due to inflation have all presented challenges.
Yet, they persevere, driven by the belief that this is a game-changing moment.
One company, Village Farms International Inc., has even made its mark by acquiring a majority stake in Leli Holland BV, one of the final license holders for the pilot.
With decades of experience in growing crops, including cannabis, they see the Netherlands as a place where they understand the rules and are excited to play.
Despite potential supply chain obstacles and competition from the black market, the Dutch pilot program offers a tantalizing glimpse into the future of cannabis commerce in Europe.
As the industry matures, we can expect more professional growers and international companies entering the scene, bringing a new level of expertise and innovation.
This shift marks a turning point in the cannabis landscape, offering both challenges and opportunities for investors.
Keep an eye on the Netherlands, my fellow pioneers, because the journey to becoming one of Europe’s largest legal cannabis markets has officially begun, and it’s going to be one wild ride.
Stay sharp and stay tuned to “Investing Pioneers” for more insights and strategies to capitalize on emerging opportunities like this one.
Until next time, happy investing!
Peter Burke
