(Adds Amsterdam resident's comment in last paragraph.)

Amsterdam, Nov. 13 (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 ($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 Cash Cow'

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,'' Cohen said. 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.

Betty's Bubble Gum

Judges -- that means anyone who pays $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 is 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. Barney's cannot post signs informing people that his shop offers the reigning king of
marijuana, because it's illegal to advertise cannabis. Brett relies on word-of-mouth advertising and articles in High Times magazine for people to know he has the goods.

`Political Reality'

Coffee-shop owners said the reason for the monitoring is clear: while the liberal drugs policy may draw tourists it also creates an image problem for Amsterdam.
``In America, if you say you went to Amsterdam, people assume you went to smoke weed all vacation long,'' said Xochitl Gonzalez, 25, an events planner in New York. ``There's a perception that drugs and debauchery are everywhere.'' The Dutch government doesn't flaunt its drug policy. The official Dutch tourism Internet site doesn't mention the Cannabis Cup under its ``Events'' site, instead showcasing the country's windmills and tulips. Calls to Amsterdam city hall about the city's drug policy were referred to its Internet site. The country's statistics bureau hasn't compiled financial statistics about the drug trade since 1996. The Christian Democratic Appeal, which emerged as the biggest Dutch party in May elections, remains opposed to the decriminalization of marijuana. Statements from government officials suggest that a reversal of the policy may not happen anytime soon.

Treatment Programs

``It would be a sweet thing if we could eventually retract'' decriminalization, said Piet-Hein Donner, the acting Dutch minister of justice, in October, according to Dutch newswire ANP. ``But we're stuck with the political reality and we want to give priority to other forms of crime.'' The government is using some of the money collected from taxes on marijuana to help fund drug-treatment programs and needle- exchange centers where addicts are provided with clean needles to reduce the spread of diseases such as HIV, according to the city of Amsterdam's Internet site. The tactics are working, experts said. Fewer hard drugs are used in the Netherlands than in other countries. Heroin addiction is as much as 25 percent lower than in the U.S. and HIV transmission via needles hovers around 2 percent, said Craig Reinarman, a professor of sociology at the University of California at Santa Cruz. Other Countries

``The people who smoke marijuana in the coffee shops bring no danger to public safety,'' said city resident Charles Bromet, 25, a sports writer who doesn't smoke cannabis. ``There's no more crime because of the toleration of drugs in Amsterdam.'' Some other countries, including the U.K., Portugal, Switzerland and Belgium, are moving toward or considering the decriminalization of marijuana. Until then, the Netherlands continues to cash in on cannabis. ``It's about time for them to allow the sale of marijuana in the supermarket,'' said Dick van Klink, 48, a civil servant. ``That would allow to the government to take in billions in extra taxes.''

--Celeste Perri in the Amsterdam bureau (31-20) 589-8505, or cperri@bloomberg.net with reporting by Michael Kelley in Amsterdam, Jim Silver in Portugal, Simone Meier in Zurich, Larry King in London and Kyle Stock in Brussels. Editor: Ruane.

Story illustration: See http://www.420tours.com for more
information about the Cannabis Cup.
See http://www.barneys-amsterdam.com for the coffee shop's Web
site. See {CNP09827030105 } for a breakdown of Dutch
macroeconomic statistics.