DUTCH GOVERNMENT FACES MARIJUANA GLUT

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 450 pounds in
anticipated sales, only about 175 pounds 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 $10 to $12 a
gram - enough for up to four joints. Coffee shops sell it for as
little as $5 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.

At midday in the Dampkring, off one of Amsterdam's busiest shopping
streets, dozens of mostly young people sit in a haze of smoke, sipping
soft drinks, smoking prepackaged joints or rolling their own. A scene
was shot here for the movie "Ocean's Twelve," and pictures of George
Clooney and Brad Pitt with the staff hang on the wall.

The menu, with 23 types of marijuana and 18 of hashish, carries a
"fair smoke" assurance that the cannabis is organically grown.

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 for growing marijuana to fight glaucoma. He founded the
Stichting Institute of Medical Marijuana in Rotterdam, and for more
than a decade sold pot directly to as many as 1,500 patients. He
estimates about 10,000 people in the Netherlands use it for medical
reasons.

In 2001 he signed an exclusive contract to provide the government
program with cannabis. But the five-year agreement was terminated
prematurely after he talked about it on Dutch television and was
accused by the government of breaking a confidentiality clause.

"I finally had to come out publicly," Burton told The Associated
Press. "The program's not working. They have less than 1,000
patients." he suggested the conservative coalition, which replaced the
more liberal government that created the program, was not promoting
it.

"The whole country is leaning to the right," he said. "I think a year
from now this program's gone."

Kuik, the official, confirmed the program is up for review early next
year.