Dutch government to appeal court order to pay compensation to owners of cannabis cafes

British, French and Swiss students in the first ever Coffee Shop College at the Willie Wortel (Carrot) Coffee Shop in March 2002. Photograph: Michel Porro/Getty Images

The Dutch government is to appeal a court decision ordering it to pay compensation to the owners of cannabis cafes in the south of the country who claim their incomes plummeted last year when they were forced to become members-only clubs which excluded foreigners.

The decision to appeal was confirmed last night by justice minister Ivo Opstelten, who said the ruling was unsustainable: "This concerns a policy that was set out in detail and approved by parliament – and which we were fully entitled to carry out."

The new wietpas or "weed pass" law was introduced in three provinces around Maastricht in May 2012, barring non-nationals from using the "coffee shops" and requiring Dutch customers to register as members, a requirement rejected by civil liberties groups as an infringement of privacy.

The law was to have become nationwide at the start of this year, but suffered a major setback when Amsterdam – which has some 220 coffee shops – said it would ignore the new legislation, and other cities, such as Rotterdam and Utrecht, followed suit.

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The latest decision by a court in The Hague described the requirement to become members-only clubs as “a disproportionate incursion into the interests of coffee shop visitors”, and said it had had the effect of driving customers away, leading to a sharp reduction in business.

Some members of the Dutch Cannabis Retailers’ Association, which took the case, claimed they had lost as much as 90 per cent of their clientele – and that illegal street dealing had increased.

And while the court also ruled that the government was within its rights, that had become virtually irrelevant given the number of local authorities that have opted out.