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Tuesday, December 8, 2009

By: Nol van Schaik: The price level of cannabis in Dutch coffeeshops: How and Why.



This article is almost like a request write up, because the price level of hash and weed in Dutch coffeeshops is a hot topic amongst our customers, but also for our staff and those working in other coffeeshops.
During the last evaluation talks with our staff, one question came up a few times from several members of our staff. They asked me if we could offer cheaper bud on sale… Sure, I said, get me some cheaper marihuana, and I will offer it cheaper on the menu.
I fully understand why they came up with this question, our dealers are the ones listening to complaints about high cannabis prices from our customers. They did not know how to explain the level of prices as they are, and believe me, Haarlem coffeeshops are cheap compared to the Amsterdam prices for bud and resin. Of course our customers blame us for upholding the prices the way they are, but that is not so, on the contrary, we have no say in the prices at all!

In the good old days a coffeeshop had its own group of growers/suppliers, which meant the coffeeshopowner had influence over the strains their growers produced, and we knew how the cannabis was grown. The prices were the same all over the Netherlands, just because there were no other takers in our line of business. Sure, some people would buy a kilo to take abroad, or even some more, but they bought from coffeeshops, not from the growers. There was a raise in prices during and after the holiday season, for two reasons: Growers take holidays too, when they do, they cannot grow, so they lose production time, like half a harvest. Another reason is the heat of summer, marihuana plants are pretty easy to grow, but when the temperature in a growroom goes above 27 degrees centigrade, the growth stuns. Many Dutch growers don’t even start growing in July and August, after they had bad summer crops. This meant coffeeshops had to stock up in Spring, to keep themselves supplied during and after the summer. All in all, the situation was easy to oversee, and growers went to coffeeshops to offer their products, where else?

Things changed when the UK started craving for Nederweed, triggered by a more tolerant stance towards cannabis consumption in England around 2001. Flocks of British buyers started to move in on our market and growers, buying marihuana left and right, to make up a bulk transport for their clients across The Channel. The only way to get their hands on the merchandise was to outbid the market, in other words, the coffeeshops. Growers are not bound to coffeeshops by contract, they will sell to the highest bidder, so the UK buyers started to offer higher prices to assure themselves of their merchandise. Cannabis prices in England went up to 8-9 pounds per gram, which meant 12-14 euro’s per gram. We were taken by surprise, growers we were reckoning with did not show up anymore, they already sold to some guy offering them 400 euro’s per kilo more than the going price in coffeeshops. We, some of my close colleagues and me, started running short on weed, so we called each other for an eventual coffeeshop to coffeeshop deal, meaning helping each other by selling some of your stock to a colleague. All of us were facing the same problem, weed was becoming scarce, and prices were soaring. Normally, we would get cannabis offered, a sample bag with a price and a phone number, you would call the numbers with the right weed, quality and price attached. Now, we had to hit the streets again, to buy ourselves weed wherever we could, but only if we wanted to pay the price, the same or a bit more than the UK export price. If you do not want to pay their price, no deal, no weed. So, coffeeshops pay the price, what else?

In the meanwhile, the Netherlands changed governments, the political compass went from liberal to conservative, and eventually to very conservative. The past three governments and the present one were and are dominated by religious groups which pretend to be political parties. These political pilgrims do not like cannabis, nor the people that smoke cannabis, grow cannabis and sell cannabis, so they use every trick in the book to get rid of coffeeshops, their visitors and their suppliers.

So, another trick was set up to make people stop growing cannabis in their homes, because if you cut the supply, the coffeeshops might run dry and lose their customers. Politicians, like chess players, should be looking a few steps ahead, their clever scheme did not foresee that it would effectively eliminate a lot of the true homegrowers, but it did not dry up the coffeeshops, so the customers keep on coming and smoking. The people that kept/keep on growing were not intimidated by the eviction rule, they grow in some warehouse or basement, the lease is not in their own name, so they cannot be kicked out of their homes. These big growers used to supply the export market, the smaller growers used to supply the coffeeshops. Now, coffeeshops or their suppliers have to turn to big growers to buy cannabis, because the few small growers left cannot take care of the coffeeshop market. The homegrowers used to sell their merchandise for reasonable prices, the big boys keep their prices on the export level. I hope this makes people understand that coffeeshops have absolutely no influence on the market/buying price of cannabis, I wish we had!
This is only the first half of the story, this was about the buying price. Explaining how we go from the buyers price to the consumers price is the other half of the story.
Although it is theoretically forbidden to buy cannabis in quantities bigger than 5 grams, coffeeshops or their suppliers by hash and weed by the kilo, and stash those batches somewhere to be able to supply the coffeeshops from there. These stashes are illegal, but as soon as a cannabis products moves from a stash to a coffeeshop it becomes legal, and taxes have to be paid over the sales of these products. The Tax people tell us what the consumer price is: we have to sell our cannabis products for the buying price + 100 %, or more than 100 %, NOT less! This means we can no longer sell cannabis with discount, the Taxman taxes us for the full price, so discounts are no longer allowed.
It also means that coffeeshops have to sell a gram of cannabis they bought for 4 Euro’s for 8 euro’s, cannabis bought for 5 euro’s for 10 euro’s etc…
As you can see, the taxman sets the consumer price, there is nothing we can do about that, if we do not pay our taxes as prescribed, we will lose our businesses.
I took the time to explain this hot topic the best possible way I can, because I want the consumer to know why the price level of cannabis has gone up since the introduction of the euro currency. I want to ask the consumers to realize all this when they buy cannabis in a Dutch coffeeshop, the dealer serving you cannot be blamed for the prices of bud…. This article is also meant for the many smokers criticizing the prices in coffeeshops on forums around the world, calling my colleagues and me ‘greedy bastards’ and other insulting names connected to our profession. I took and take accusations like this personal, because I am a Dutch coffeeshopowner, and proud of it!

Nol van Schaik.
Haarlem, the Netherlands.

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