MARKET GLUT LEAVES DUTCH GOVERNMENT AWASH IN POT

AMSTERDAM, Netherlands - There's a whiff of crisis in the air at the
Dutch Health Ministry: It's sitting on a pile of pot that it just can't
sell.

The Netherlands rolled out a program last year that allows patients to
buy prescription marijuana at any pharmacy. Some medical insurance
policies cover at least part of the cost, but often not enough to
offset the pharmacy price.

In a country where any adult can walk into a "coffee shop" and smoke a
joint for much less than the government price, many say the experiment
is a bust.

"I think it's a shame that they can't deliver a cannabis product a
little bit cheaper than the coffee shops," said David Watson, head of
Hortapharm, an Amsterdam-based company licensed to research and
develop cannabis for pharmaceutical use.

"Why is it that a legal commodity is more expensive than an illegal
commodity?"

The government says packaging and distribution push up its prices, and
acknowledges its program may be foundering. Of some 200 kilograms in
anticipated sales, only about 80 kilograms have been sold, said Bas
Kuik, spokesman for the Office of Medicinal Cannabis, an arm of the
Dutch Ministry of Health.

The government sells two varieties ranging from about $12 to $15 Cdn a
gram -- enough for up to four joints. Coffee shops sell it for as
little as $6 a gram, with only the highest-quality weed fetching
prices comparable to the government's.

Under the liberal Dutch approach dating to the 1970s, the law forbids
privately growing and selling marijuana, and has no tolerance for
dealing in hard drugs, but refrains from prosecuting the sale of small
amounts.

The medicinal program allows pharmacies to sell standardized,
quality-controlled marijuana from authorized growers to sufferers of
chronic or terminal diseases such as multiple sclerosis, HIV/AIDS,
neuralgia, cancer and Tourette's syndrome.

The competition comes from hundreds of marijuana bars, thinly
disguised as coffee shops to maintain the fiction of legality. Though
patronized mostly by recreational smokers and tourists, people in pain
who find relief from cannabis are also customers, paying less than
they would to a pharmacy.

Erik Bosman, manager of the Dampkring coffee shop, says many of his
regulars are medical patients, and he even used to offer discounts for
people with prescriptions.

But many coffee shops are dingy, unappealing hangouts that hardly
inspire a feeling of pharmaceutical confidence, and some seriously ill
people will pay more for guaranteed quality, especially if it's
covered by insurance.

One of two legal marijuana growers for the government program is James
Burton, an American who immigrated after spending a year in a U.S.
prison.