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It's not legalized in the Netherlands. It's not criminalized due to an official stance of tolerance.

https://en.wikipedia.org/wiki/Gedogen

It's complicated, and there's a lot of nuance to the Dutch model, but it is distinctly different from what you have now in Canada and in numerous US states.



That wiki link has a great example:

"To give an example in layman's terms: a mother may tell her child he can't have cookies from the cookie jar. The father, regardless of his beliefs, can't tell the child it's okay to have a cookie as that would result in a conflict with the mother. If the father sees the child taking a cookie anyway, he may choose not to say anything. He may not want to punish or stop the child but can't condone the behaviour either. The father may act as if nothing had happened to avoid a conflict with both his beliefs and the mother. He "gedoogs" the behaviour."




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