CANNABIS TRADE GETS DUTCH ECONOMY HIGH

Bloomberg

In a bright yellow room dotted with multicolored suns, Barney's Breakfast
Bar serves eggs, pancakes, and the house special -- Sweet Tooth, the best
marijuana on sale in Amsterdam.

At least that's what the judges at the Cannabis Cup decided last year. Now,
Barney's and its coffee-shop rivals are gearing up for this year's edition
of the contest. Beginning Nov. 24, close to 3,000 marijuana fans will spend
five days in Amsterdam rating the very best in cannabis. That means a boom
in business for the shop owners and for the Dutch economy.

"There's great demand for the winning product," said Derry Brett, a former
engineer and the owner of Barney's. His shop has no corners; the fluid
shapes create the feeling of floating when high, Brett said. "Cannabis is a
huge business for Amsterdam," Winning the cup can increase a shop's sales
by as much as 50 percent, the event's organizer said. The 1976
decriminalization of smoking marijuana contributed to the Dutch economy.
Drugs were a 1.4 billion euro (US$1.36 billion) business worth 0.5 percent
of gross domestic product in 1995, the last time the government collected
such figures.

"It is a huge industry and growing," said Peter Cohen, an associate
professor of sociology at the University of Amsterdam. "Cannabis creates
jobs and income for people who may not otherwise have jobs, who then pay
taxes to the government."

The government also collects taxes on income from marijuana -- as much as
52 percent depending on a shop's take.

"The Dutch government is doing so well with drug tourism," said Mike
Esterson, the Cannabis Cup's promoter and organizer. "It's a cash cow for
everyone involved."

A gram of marijuana sold in an Amsterdam coffee shop costs between 5 and 10
euros. Most shops also offer pre-rolled joints at an average price of 3
euros. Such sales can bring in more than a million euros a year for a shop,
academics and economists estimated.

For every 20 euros a tourist spends stocking up on White Widow, White Smurf
or Warlock marijuana, he or she spends 200 euros on food and lodging in the
city, coffee-shop owners estimated. The 10.1 million visitors of all kinds
who visited the Netherlands in 1999 spent 2.45 billion euros.

"It is certain that many tourists come to the city to see the deviance
here, the drugs, the prostitution," said Peter Cohen, an associate
professor of sociology at the University of Amsterdam.

The Cannabis Cup, first held in 1987, boasts its own headquarters, travel
agency and concert program. And it's growing: Twenty-six of Amsterdam's
coffee shops, the most the cup has ever hosted, will this year present
their best specimens for critique.

Judges -- that means anyone who pays US$225 for the right to vote on Betty
Boop's Bubble Gum marijuana and Bushmaster's Kali Mist hash -- have five
days to sample the goods from the shops and vote in the Cup's headquarters.

The judges, mostly Americans, are transported by bus from the home office
to the doors of each shop. They're asked to avoid other mind- altering
substances, such as caffeine and alcohol.

While Dutch law permits the smoking of marijuana, it's illegal and
punishable by law to grow more than 5 plants. Growing more than 1,000
plants is subject to a fine of as much as 125,000 euros and up to 6 months
in prison. The possession and sale of hard drugs such as cocaine and heroin
are also illegal.

Proprietors must have a license to sell marijuana, and while some have a
license to also sell alcohol, most can only sell beverages like tea, coffee
or juice. Other shops in the country are allowed to sell hallucinogenic
mushrooms and herbal ecstasy.

The government monitors the coffee shops to see that the rules of the
license are being followed.