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When SIMM® received the first license of its kind in the world to produce medical cannabis for the Dutch Ministry of Health in 2003, we entered into the contract with the full expectation the program would be successful. For that reason, we invested an enormous amount of our time, our energy, and our finances to guarantee that we did everything humanly possible to make the program a success.
For example, you see here the physical condition of the glasshouse at the time we rented it in 2001. It was in a state of disrepair and needed a complete overhaul before it could even be used to grow one plant. The same was true of the warehouse space, which eventually became our processing area, among other things.
 
In addition, it was necessary to develop a complete set of standardized documents. These included the actual batch documentation, methods and forms for maintaining the daily inventory required by the Opiumverlof, development of forms used by employees for their daily operations, setting up Standard Operating Procedures for the various day-to-day jobs that needed to be done. Since there was no system previously set up anywhere in the world, developing these protocols was very time-consuming.
In March of 2003, we signed our contract which was to run for a period of 5 years, with a renewal coming up every calendar year.
There were two growers selected and each grower was able to enter one cannabis variety. During our initial negotiations with the BMC, we tried very hard to convince them we needed to enter at least 3 varieties, so that patients could have a fair selection. However, we were advised that for financial reasons, that would not be possible.
On 24 February 2003, the order was placed with us to deliver monthly quantities, beginning in July of 2003 and continuing through February of 2004. In 2004, the orders were given to us based on the inventory on hand with the BMC. To the best of our knowledge, the amount of kilograms ordered from each grower were identical, in fairness to both growers.
In August of 2003, one month before the program began, we learned for the first time from the BMC what the actual price for the patients would be in the pharmacy. When we first heard the price, we became very concerned. Mr. Scholten of the BMC had always reassured us that in all likelihood, this medicine would be paid for by the social insurance plan. If that did not happen, we were very concerned about whether most patients would be able to pay the very high price of the pharmacy cannabis.
As the months passed and the preliminary sales figures each month were far less than was expected, our concerns increased.
These were concerns that were also expressed by the other grower, Bedrocan. At the request of Bedrocan, an emergency meeting was held in Den Haag with the BMC in the first part of 2004. Present at this meeting were officials from the BMC, the CIBG, the Health Inspector’s office, Bedrocan, and SIMM. The two growers conveyed to all of those present at the meeting that unless something was done to increase sales, eliminate competition, or lower the price, we would both be in financial danger by the end of the year 2004.
Although the BMC continued to place orders during 2004, and did offer to make a pre-payment on the coming orders, sales did not change in any dramatic way.
When SIMM was originally opened in 1993, our goal was to provide high quality cannabis to patients at a reasonable price (3,00 to 4,00 per gram). We realized at that time that patients must have access to the medicine at a reasonable price, or they would find some other source (coffee shop, friend, etc.)
The BMC claims that they did market surveys to establish the number of patients in the Dutch marketplace. From us, they learned that we distributed on average 10 kilograms per year. However, they did not ask for actual invoices or backup documentation to prove these numbers. How they arrived at the estimation of 10,000+ patients is unknown to us. If there are 10,000 patients, are those same patients able to pay a price that is double or triple the price they were paying? We received many e-mails and telephone calls from distraught patients, asking what could we do to help them, and how did the cannabis get so high-priced. Some of them said they were not able to afford the price and would now go to a coffee shop or to a patient organization.
We think we had a moral obligation to speak the truth. The BMC did not want us to speak the truth. They wanted us to continue to publicly defend their price. After an appearance by James Burton on the NOVA program in July of 2004, our contract was abruptly ended. According to the web site posting of Mr. Scholten, head of the BMC, posted on cannabisgroups@yahoo.com on 30 July 2004:
“From the point of view of business economics, it cannot be justified to work with 2 growers”.
It is obvious to us that our contract was terminated because the BMC was not happy we were speaking openly about problems with the program.
Less than 7 months later, the BMC has introduced a new variety grown by Bedrocan. This is to replace the SIMM 18. It is amazing to us that within this short period of time, Bedrocan was able to develop a new variety the BMC says is comparable to our SIMM 18, grow test samples to see how the analysis developed, and then grow the first crop, have it flowered, harvested, cured, packaged, sterilized, and ready to come on to the market. We find it very surprising indeed that this could have been organized in only 6 months time.
The BMC states that this new Bedrocan product will have less variable specifications than our SIMM 18. However, the contract which we signed with the BMC allowed for variance of plus/minus 2% on the THC and plus/minus 1.2% variance on the CBD.
In article 5.3 of the Raamovereenkomst, it states that if there are 3 consecutive batches that do not meet the specifications, then the contract can be terminated. This did not happen for SIMM’s batches.
As recent as 30 June 2004 (one month prior to the NOVA report) the BMC was sending us draft contract revisions for supplying several kilograms of cannabis for the European Union CRAFT project. The BMC was actually pressuring us to give them a quick answer on whether we would sign this contract. If our products were unreliable, which was given as one reason for terminating our contract, why would the BMC want us to sign this contract and produce this cannabis?
If you look at the GAP contract which was signed by both SIMM and Mr. Scholten of the BMC, Bijlage 1, you will see the samenstelling for cannabidiol at 7,6%. To the best of our knowledge, we NEVER met the specification of that percentage of CBD. As a matter of fact, the BMC has never explained to us how they arrived at this figure. Nor have they explained why they accepted batches from us that did not meet this specification.
It is our belief that the BMC treated us unfairly by terminating our contract. Because they have a monopoly over the medical cannabis distribution in the Netherlands, they have an extraordinary obligation to act in a fair and reasonable manner. If they only need one grower (as stated in Mr. Scholten’s own words on his web site) then why did they put us at financial risk by signing a 5-year contract in 2003 with two growers?
Had we known that we would actually be “in competition” with the other grower, then we might have made a different business decision, taking the competition factor into consideration.
As impossible as it might have seemed to us at the start of this “legal” cannabis project, we find ourselves in the position of being victimized by the Bureau of Medical Cannabis, of the Health Ministry. After having lived through the ordeal of going to prison and having the US government seize our farm and home, and filing personal bankruptcy, we never in a million years could have envisioned facing financial ruin AGAIN as a result of actions taken by the Dutch government.
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