Netherlands: Commercial cannabis cultivation on the horizon

Following legislative changes in other countries, The Netherlands might become a next interesting place for the development of commercial scale legalized cannabis cultivation. Should cannabis cultivation indeed under certain conditions be allowed, the Dutch professional greenhouse growers are best positioned to take this on. "In the end it is all about creating the highest yield at the lowest cost, just like with commercial greenhouse growing." Michiel de Jong of Lemnis Oreon observes.

Last week Tueday, a majority of the Dutch House of Representatives voted for a private members’ bill to tolerate the cultivation and sale of cannabis under certain conditions. Will this mean that Dutch greenhouse growers will remove their bell pepper and tomato crops to make place for pot?

It will not go this fast yet. "For a start, in any case the law must first be approved by the Senate," says researcher Eric Poot of Wageningen UR. "Only then can the market develop itself any further." But, he also sees that certainly there is a serious market opportunity for commercial greenhouse horticulture."

Research on cultivation

Poot has already been involved in the research of commercial cannabis cultivation at the request of suppliers of LED lighting. Last year, tests were conducted at Wageningen UR Greenhouse Horticulture with medicinal cannabis crops. "If, in the Netherlands you want to research indoor cannabis cultivation, you require a waiver. And then the research must be medical related," he said.

Lighting manufacturer Lemnis Oreon initiated the research at Wageningen UR . The company expects a tremendous growth of the cannabis market in the USA and Canada. And their water-cooled LEDs do well in the cultivation of cannabis, sales manager Michiel de Jong says. "Because through the water cooling the excess heat from the cultivation space is removed cost-effectively. We have developed the lamps for other reasons, so this application actually is a bonus."

Both Poot and De Jong believe there is a market for commercial cannabis cultivation. "Of course there is a market. The cannabis consumed in Holland is now also grown somewhere. According to the plans closed chains must be made, of coffee shops and suppliers. It is exciting how this is going to develop. More should become clear in the coming months."

But so far the commercial Dutch greenhouse growers have showed no interest in the new possible cash crop: Concrete questions from the growers have been received by Wageningen UR, but at a meeting of the Research Centre on Plant Substances, medicinal cannabis was mentioned as a new business model for greenhouse horticulture. "We are always looking at valuable crops for commercial greenhouse cultivation."


Regulating a legal chain


The cultivation of recreational cannabis does not differ very much from medical cannabis, and if that would be legalized first, it will also mean a good market for a supplier like Lemnis. "Personally, I think that you will get more control on the chain by regulating the production of cannabis, so we're prepared to talk about that", de Jong says.

But businesswise it also would offer opportunities," says De Jong. In his view, greenhouse vegetable growers have the best credentials to grow cannabis. "Undoubtedly, 'underground growers' will also start with it, but I am of the opinion that the knowledge of Dutch commercial greenhouse growers is very valuable. This we also saw in the US: On one side the illegal cannabis growers came into the open, but in the end they need cultivation knowledge to work on a professional level. So they have to work together with commercial greenhouse vegetable growers. I think these can achieve higher yields at lower costs than someone who is used to growing in a basement."

Market demand

Wageningen UR certainly is very interested in cannabis cultivation. "Whether it is best to grow cannabis in spaces without daylight or in greenhouses," Poot says. "Both have advantages and disadvantages and in the USA this is discussed fiercely. Now we let students think about this." Students are also employed to explore how great the demand for cannabis might be.

Because that is not clear at all, De Jong knows. "It was mentioned that about 166,000 kg should be delivered to the Dutch market. That would require several hectares, but definitely less than 100. Some newspapers even mentioned a maximum area of 6.75 hectares.

Supply of technology still illegal

The passing of the law by the Senate does not mean that cultivation of cannabis is immediately permitted. At certain growers, who meet the government’s conditions, cultivation will be tolerated. Consequently, there will be issues about the deliveries to these companies. Two years ago the government changed the Opium Act and the ban on grow shops was invoked. Since then, the preparation of cannabis cultivation is a criminal offense and also the supply to professional cannabis growers. For suppliers of lamps, but also of substrate or of ventilation systems, it is prohibited to supply customers who use these materials for cannabis cultivation.
This is not addressed in the bill, lawyer Joost-Joris of Doleweerd of 3Advocaten says. "The bill only provides the possibility to grant an exemption to professional or commercial growers. The grow shop ban is precisely aimed at these professional and commercial growers, so that the supplier of nursery equipment is still guilty of violating the Opium Act, despite the fact that he is supplying to a legal nursery."
"The bill does not specify special consideration for this aspect," Joost-Joris adds. "For example, by creating an exemption system for suppliers as well. So according to the letter of the law they are punishable." But he does not go into the consequences. "It will be quite some time before the passed bill will become law, and until that time this point can be cleared. Also I think that would not be obvious, the chances of a successful prosecution of suppliers of growing equipment that deliver only to controlled farms, will not be very great."

For more information:
Lemnis Oreon
Lorentzlaan 6
3401 MX IJsselstein
T: +31 30 760 0660

Eric Poot
Wageningen UR

Joost-Joris van Doleweerd
3 Advocaten

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