FEDERAL POT FARM PLANNED AT MINE

Subterranean Site Near Flin Flon Will Produce Crop

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 part of a copper and zinc mine near remote Flin Flon, Man.

Health Canada announced yesterday that biotechnology firm Prairie Plant
Systems of Saskatoon had 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 Ottawa will
loosen its policy on medical marijuana, which now allows legal use only by
patients in clinical studies and by about 140 people with medical exemptions.

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 slightly more than $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 officials 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 it.

He noted that earlier 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 shortsighted 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, such as marijuana brownies,
could have been tried.

Prairie Plant Systems beat out 34 other bidders for the medical-marijuana
contract, a deal that will require the company to provide two types of
marijuana with controlled levels of THC, the ingredient that causes
intoxication. A regular strain will always be 5 to 6 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 such
as cancer, Mr. Zettl 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.