What is a tolerated coffeeshop worth?

If we should believe ‘Quote’ you should establish a coffeeshop if you want to become a millionaire. Criminologist Spapens recently stated in the Brabants Dagblad (Dutch newspaper) that all coffeeshop owners should be multi-millionaires by now. The thought is that coffeeshops rake in the money. Even the tax authorities think that you can appraise the goodwill of a coffeeshop. The Mayor of Terneuzen predicted ten years ago that the government should auction of the permits for coffeeshops, similar to radio frequencies. Last year the Mayor of Rotterdam proclaimed the same. Aboutaleb was going to auction of a permit for a new coffeeshop to the highest bidder. That way the council would profit as well. But what is a coffeeshop actually worth? In my opinion not so much. I shall explain why I think so.

Permit?

If you want to run a coffeeshop, you aren’t able to get a permit to sell hash or weed. The Mayor isn’t allowed to issue a permit for that. The mayor is allowed to issue a permit for selling non-alcoholic drinks. The sales of hash and weed he can only tolerate. This toleration entails that he knowingly ignored the fact that you are doing something that is against the law. Sometimes that toleration is put into writing, a so called edict of toleration. You can read under what circumstances an administrative prosecution is omitted. If you take the well-known backdoor problems for granted, then you at least know what you are up against.

Taking away property;

Unfortunately there is a difference between a permit and an edict of toleration in a legal sense. What if the Mayor changes the policy on the edict of toleration and withdraws the edict of toleration? Can you protest this decision? No you can’t. According to the Council of State (Raad van State) you can’t protest or appeal the withdrawal of an edict of toleration. With granting the edict of toleration this is possible. The rule of law states that the neighbourhood must be given the opportunity to oppose the establishment of a coffeeshop. I hear you thinking; that can’t be true? The Mayor can’t just take away someone’s property? The answer to that question can only be found by a lawyer. An edict of toleration is not property. The European Court of Human Rights came to this conclusion in 2013. You can’t award an edict of toleration with a lot of value, because the Opium law (Opiumwet) bans the trade of hash and weed. A Mayor isn’t obliged to tolerate the trade of hash and weed. Only a quarter of the Dutch councils tolerate coffeeshops. Seen in this light you are lucky if your coffeeshop is being tolerated.

Uncertainty

A number of years ago the opening hours of a coffeeshop in Hengelo were restricted. The Appeal Court in Arnhem denied a claim for lost damages brought by the owner. The tolerated coffeeshop couldn’t measure up to the normal catering businesses, according to the judges. For a regular business in the catering sector the rules of toleration don’t apply. The Supreme Court has denied a claim for damages brought by a coffeeshop in Amsterdam without further explanation in its ruling of December 1st 2017. The Mayor refused to extend the edict of toleration. The coffeeshops claimed damages. The judges emphisized that the nature and the content of the edict of toleration is based on the (local) political insights. These insight can change. Not renewing an edict of toleration is a business risk for coffeeshops. For that reason the government is not obliged to compensate damages. As long as there is no permit system for coffeeshops, you are buying uncertainty and that suppresses the value. Translated by Joanna McKernan. Joanna works as a Lawyer for the law firm Beckers & Bergmans in Sittard. She is a native English speaker. Joanna has a lot of experience in cannabis related civil cases. André Beckers (Lawyer) andre@beckersbergmans.nl available on phone: 003165317489 Joanna McKernan (Lawyer) joanna@beckersbergmans.nl available on phone: 0031467600030