LEGAL MARIJUANA OPERATION OPENS

Ottawa - The federal government's first legal supply of marijuana will come
from high-tech greenhouses hundreds of metres below the ground in an unused
portion of a copper and zinc mine near the remote community of Flin Flon,
Manitoba.

Health Canada announced Thursday that biotechnology firm Prairie Plant
Systems, of Saskatoon, won the first government contract to legally produce
marijuana for medical purposes, in a five-year, $5.7-million deal.

The high-tech, subterranean growing environment, normally used to keep in
the genetically modified seeds and pollen of plants grown for
pharmaceutical purposes, was in part chosen because it will keep potential
pot thieves out. "In this case, it's for the two-legged biological
control," said Brent Zettl, president of Prairie Plant Systems.

The awarding of the contract solves a conundrum for the government, which
had seen courts in Ontario and Alberta strike down marijuana laws because
they did not allow for medical use, but had not yet identified a legal
supplier.

However, Health Canada officials gave no indication whether Canada's
relatively stringent policy on medical marijuana, which now allows only
patients in clinical studies and about 140 people with medical exemptions
to use marijuana legally, would be loosened.

Medical marijuana proponents said that unless those policies are made less
restrictive, they will continue to challenge the current drug laws in court.

Under the contract, Prairie Plant Systems, will supply at least 1,865
kilograms of marijuana in cigarette and dried-leaf form. That means the
marijuana will cost just over $3 per gram, less than a third of the $10-15
street price.

The first delivery to the government will not take place for a year,
however, and Health Canada official said they have not yet decided how they
will distribute the drug to patients who use it under a doctor's orders, or
whether those patients will pay.

Judy Gomber, the director-general of Health Canada's Drug Strategy and
Controlled Substances Program, said they are considering whether it will be
distributed through pharmacies, delivered or made available through
government offices.

"We imagine we have a few months to take into account the distribution
details," she said.

However, some marijuana activists said the government will have to do a lot
more to avoid fresh legal battles.

Marc-Boris St-Maurice, the leader of the Marijuana Party who was arrested
for selling marijuana at Montreal's Compassion Club, where the drug is sold
to those who bring a note from a doctor, said the government must widen its
exemption system to allow any patient with a doctor's prescription to
obtain the drug.

He noted that earler this month, the Alberta Court of Queen's Bench gave
Grant Krieger, a Calgary man who suffers from a chronic disease of the
nervous system, the right to grow marijuana for his own use, even though he
does not have a government medical exemption.

In July, the Ontario Court of Appeal struck down criminal laws banning
marijuana possession, but gave the government one year to revise the law to
allow for medical use of the drug.

"The government has reacted in a very short-sighted way. They haven't
addressed the issue of doctors and prescriptions," Mr. St-Maurice said.
"They haven't tied up all the loose ends. They're far from being done with us."

The government's proposal to provide the marijuana in cigarette form also
came under fire from an antismoking group, Physicians for a Smoke-Free
Canada, who criticized the government for planning to distribute marijuana
in cancer-causing form when smoke-free forms, like marijuana brownies,
could have been tried.

Prairie Plant Systems beat out 34 other bidders for the medical marijuana
contract, a deal that will require them to provide two types of marijuana
with controlled levels of THC, the ingredient that causes intoxicating
effects. A regular strain will always be five to six per cent THC, while a
placebo strain for clinical tests will have less than 0.1 per cent THC.

The company, founded in 1988 with a plan to produce Saskatoon Berry trees
for farming, branched out into carefully controlled plant biotechnology
including producing plants for ingredients in drugs to fight diseases like
cancer, Mr. Zettel said.

Since 1991, it has produced specialized plants in a mine owned by Hudson
Bay Mining and Smelting, and will grow the marijuana in a similar process,
he said. Mr. Zettl, who said he has never smoked marijuana, said the
company has plant-growing expertise, but no experience with marijuana.

"But there's a lot of information on the internet," he joked. on the Internet?