On March 10, a 23-year-old man's severed head was displayed at the entrance of a hookah lounge in Amsterdam where drug dealers are known to gather. The rest of the victim's body was found in a burned-out car on the other side of the city.

It was the latest grisly episode in a conflict between rival gangs that authorities say has produced roughly 20 percent of all murders over the past three years in the Netherlands, a country that has one of the lowest homicide rates in the world.

The feud broke out after a load of cocaine went missing from the harbor in the Belgian city of Antwerp four years ago, and has been blameed for numerous associated killings across the country ever since. The spate of violence shows how even a country known for its progressive drug policies can fall prey to the war on drugs.

The drug war basically started at The Hague with the signing of the International Opium Convention of 1912, the world's first international drug control treaty. The pact served as a stepping stone to the eventual establishment of the United Nations and the passage of three stringent drug control treaties that have largely determined international drug policy.

Starting on Tuesday, the UN General Assembly will hold a special three-day session in New York to discuss the course of policy for years to come — its first since 1998. Advocates for reform argue that existing policies have caused more harm than good, and even the World Health Organization, the UN's health agency, has called for harm reduction measures and the decriminalization of drug users.

Though the Dutch have struck a compromise with international treaties that shows great results for reducing harm for drug users, the approach has largely shielded problems with drug crime in the Netherlands from public view.

'It's a system that is fundamentally flawed, pumping millions into a criminal underworld.'

Drugs in the Netherlands occupy a sort of legal limbo. All common illegal drugs are officially forbidden, but penalties for the possession are non-existent to low, depending on the substance and the amount in question. In reality, there are different gradations to the decriminalization of various substances, as well as a number of contradictory policies.

Amsterdam's coffee shops are a notorious example. They dispense cannabis to locals and tourists alike, though the drug is illegal to produce, possess, and sell. But once the marijuana lands behind the counter of a coffee shop, the law is no longer enforced in a spirit of tolerance of soft drugs, as long as the shops keep their stock low and don't sell more than five grams per customer. The compromise arrangement allows the Netherlands to still observe the UN drug conventions.

"This two-tier system where you're selling it openly but can't produce it is completely bankrupt," said Jan Brouwer, a law professor at the University of Groningen who specializes in Dutch drug policy. "It's a system that is fundamentally flawed, pumping millions into a criminal underworld."

Brouwer doesn't believe in the regulation of all drugs necessarily, but sees that the limited harm in some drugs cannot validate the current system.

"I advise the government to start regulation as soon as possible, to prevent these hardened crime syndicates from taking over this market completely. We've tried this two-tier system for 40 years now," he said. "For the sake of judicial clarity, it's time to make a choice. Either we go the American way and crack down on all of it and it's clear to everyone, or we finally take a next step. Let's try regulation of cannabis first and take it from there."

The Netherlands' reputation for tolerance was always more a product of so many people living in such a tight space rather than an active endorsement of the rights of others. "You mind your business and I'll mind mine" is more characteristic of Dutch culture than "live free or die."

This sentiment is reflected in a remark that Dutch Prime Minister Mark Rutte made during a 2014 interview. "People should do with their own bodies whatever they please, as long as they are well informed about what that junk does to them," he said.

Rutte added in the same interview that cannabis legalization of the Colorado model — where the state taxes and regulates all levels of the supply chain, and adults 21 and over are allowed to purchase weed from state-licensed stores — was out of the question. "If we were to do that," he said, "we'd be the laughing stock of Europe."

Apart from a veneer of tolerance, drug culture in the Netherlands isn't that different from much of the rest of the world. Despite the misleading idea of Amsterdam as a paradise for weed, the general public couldn't care less about cannabis, and its production is still forbidden. For most Dutch, marijuana is mostly a tourist thing or something you fool around with when you're still in school. Some 24 percent of the country's adult population has tried it, which is high, but only 10 percent did so last year, which is low.

The fact that people use drugs is taken as an unfortunate given in this country, but its approach from a health perspective has made life a lot better for drug users compared to 40 years ago. Prescription drugs are tightly regulated and are especially withheld when physicians suspect abuse. Addiction treatment is paid for under universal healthcare. And the most progressive policies go as far as providing addicts with free heroin at designated health centers.

"Our heroin program has been wildly successful," said Floor van Bakkum, head of prevention at the Jellinek Addiction Care in Amsterdam, which is funded by the national healthcare system. "We've been able to take care of addicts, take them out of a life of crime, lowered diseases, lessened harm, and eventually made sure that there were basically no new heroin addicts added to the group we were taking care of."

The average age of opioid addicts is now well over 40 years and continues to rise. Drug overdoses still occur, but the Netherlands sits near the bottom within Europe, with a rate of 9.1 total opioid overdose deaths per 1 million adults. For comparison, the United States has a rate of about 83 overdose deaths for illegal drugs and 123 for prescription drugs.

The healthcare approach has improved the quality of life of drug users, effectively turning drug use into a health issue rather than a criminal issue.

"In the Dutch system, use is always a health issue first," she said. "It's only in trade and production where the criminal perspective starts playing a role."

That's where problems persist. Last year's 2.5 million Dutch cannabis smokers, 260,000 MDMA users, and 170,000 cocaine consumers still sourced all of their product from illegal networks.

Weed is locally sourced and hash comes mostly from North Africa, according to locals who work in the cannabis trade. A 2012 national police report indicated that cocaine is trafficked primarily through the Rotterdam or Antwerp harbor and then distributed across Europe. Synthetic drugs such as MDMA are mostly locally sourced, since the Netherlands is one of the world's main producers of them.

"Production of synthetic drugs mostly takes place in warehouses, office buildings, sheds on industrial parks or out in the country," said the 2012 police report, an anonymized summary of about a dozen large-scale investigations.

'This is an international issue. We shouldn't have the illusion that if we start doing things differently, that it would help with our problems with this ballooning organized crime.'

Earlier this month, 150 people were arrested after a wide investigation uncovered a major drug production operation. Authorities told the Dutch newspaper NRC that the lab was big enough to produce "70 kilos of MDMA multiple times a week."

The market for drugs being what it is, criminal drug distribution can easily become an integral part of local economies, spurring local corruption and money laundering. Fighting the illicit drug market now costs the Netherlands roughly $1 billion a year. If the dollar figure were adjusted to reflect the US population, it would be $19 billion — roughly equivalent to NASA's annual budget.

Unlike the US, the Netherlands does not have three-strikes laws or impose mandatory minimum sentences. There's also no wide militarization of the police force, and all of its prisons are state-run rather than private. Though the prison population has been declining overall because of aging, about 17.5 percent of all Dutch prisoners are locked up for violating of the country's Opium Act.

Nicole Maalsté, an independent sociologist, studies the people who work in the country's illicit drug industry. Police and government departments often ask her for help understanding these criminal networks. In an email to VICE News, she said people who work in the Dutch weed business can be divided into separate categories.

"First, the classic criminals who are trying to make a buck any way possible," she said. "Second, the pioneers who love the plant and never saw themselves as doing something wrong, then there are farmers who are trying to find a solution for their business in a bad economy, and then there are the accidental workers who were forced by life or criminals to start growing."

In recent years, she said, government crackdowns have scared off many of the pot enthusiasts while professionalizing the ones that are just in it for the money.

Watch the VICE News documentary Amsterdam's War on Weed:

The other flaw of the current Dutch system of not going after drug users while busting drug producers is that it reduces quality of the illicit substances, making them more dangerous. Coke is almost always cut with something else, and bad pills cause some fatalities. The quality of ecstasy pills fluctuates with the amounts of seizures of precursors, occasionally leading to deaths.

While the Dutch system has major drawbacks, the current UN treaties forbid countries to legalize and regulate drugs for recreational use. Specifically, the Single Convention on Narcotic Drugs from 1961 states that member states have a "general obligation" to "limit exclusively to medical and scientific purposes the production, manufacture, export, import, distribution of, trade in, use and possession of drugs."

Piet Hein van Kempen, a professor of criminal law and criminal procedure at Radboud University in the Netherlands, was recently asked by the Justice Ministry to study if international drug treaties offer any wiggle room to "legalize, decriminalize, tolerate and/or regulate cannabis in any other way for recreational use." His answer was an emphatic no.

"If you solely look at both UN treaties and European drug laws, then even our current system is not allowed under these treaties," he wrote. "Any movement into not enforcing drug laws is a violation of the treaties."

In the US, where three states and Washington, DC have legalized marijuana for recreational use, the Obama administration has argued — to skepticism from some members of the international community — that its approach of keeping weed outlawed at the federal level while permitting some states to legalize is compliant with the UN treaties. Many governments, including Russia, Iran, China, and others that take a hardline approach, insisting that the treaties be interpreted only as a total ban on all illicit substances.

'If you solely look at both UN treaties and European drug laws, then even our current system is not allowed.'

Van Kempen and a fellow researcher are currently working on a book that considers solutions outside of the UN drug treaties. He wouldn't offer any specifics, but said, "I can say that many people will probably find the results interesting."

The drug war has always been framed as a campaign for public health and against organized crime. The two-tier system in the Netherlands has not only removed the worst excesses of the drug war, it has also narrowed the public's view of the problems that remain, making it difficult to build momentum for regulation. One of the country's major political parties supports legalization in principle, but its members won't campaign on the issue for fear of a political backlash.

When asked about the effects of the Dutch drug policy on organized crime, Martin van Rijn, the country's secretary of health, essentially said that the jury is still out, but that no matter what happens with the country's drug policy, it will take action from the rest of the world to make a real difference.

"This is an international issue," he said. "So we shouldn't have the illusion that if we as the Netherlands would start doing things differently, that it would help with our problems with this ballooning organized crime."