Birthplace of Semi-Legal Pot Risks Falling Behind U.S.

Since the Netherlands decriminalized marijuana in 1976, Amsterdam’s “coffee shops”—which are much more about joints than java—have become a destination for weed lovers from around the globe. But pot has never been fully legalized in the country: You won’t get busted for smoking or selling small quantities, but producing or selling it in bulk remains a legal gray zone. And that’s proving to be a handicap for the Dutch marijuana industry as full legalization speeds ahead elsewhere.

Dutch seeds are considered the gold standard worldwide, and people with ties to the Netherlands are a big part of the global business. But many of the country’s growers say the future lies across the Atlantic, where Canada and 11 U.S. states now allow recreational pot use, and many more states permit medicinal consumption. “We’ve lost our head start,” says Jair Velleman, a Dutchman who dropped out of high school in 1990 to grow pot for Amsterdam’s coffee shops. He now runs Lbs. Distribution, a California growing operation that he expects to double in size this year, to sales of $50 million. “In the U.S. I can make money,” he says. “In the Netherlands I’m just considered a nutty cannabis activist.”