Going up in Smoke

Bernhard Mchler has shoulder-length brown hair and finely chiseled features. He's gunning a sporty blue Mazda along country roads north of Zurich toward Ossingen. Fast, with no seat belt. "We've got electronic alarm systems, entry codes and fields guarded by dog handlers 24 hours a day," he says. "Our problems aren't with organized crime, they're with 17-year-old kids." He breaks off to overtake a slow-moving cyclist, cutting back just in time to avoid an oncoming truck. "The only real trouble was at the shop in Baden," he continues. "Three guys walked in and put pistols to the assistants' heads." Mchler is talking business, and his business is selling marijuana.

For most Europeans, Switzerland is a conservative place of chocolates, bank secrecy and luxury watches. Now another product, cannabis, is on its way to becoming as quintessentially Swiss as the multifunction penknife. Mchler is a manager and founding member of the Enetbrugg cooperative, which employs 200 people and racked up revenues of $5.5 million in 1999 by growing the weed and selling it to the country's burgeoning network of legal hemp shops. The cooperative's revenues were lower last year.

In late September, police helicopters swooped down on its fields to seize 70,000 top-grade marijuana plants. Mchler spent 16 days in jail, along with the five other Enetbrugg founders, and puts the group's net loss from the episode at $1.7 million. Yet he is not one to bear a grudge. "I don't blame the police," he says. "They're just doing their job."

The bust and Mchler's reaction to it highlight the legal ambiguity of Switzerland's cannabis economy. Technically, growing or selling the plant is legal unless it's to be used as a narcotic. Proving that seized marijuana was intended for that purpose is a job for the police and the courts. "If you said you were selling it to treat epilepsy, the police would have to follow buyers home to see what they did with it," says Thomas Zeltner, head of the Federal Office of Public Health. "It's an interesting example of a sector of agriculture finding loopholes in the legislation and then taking advantage of them."

The marijuana business has mushroomed in recent years. Twenty hemp shops were trading across Switzerland in 1997. Today there are as many as 300. Official figures show 250 hectares of fields producing marijuana for some 600,000 occasional-to-regular consumers. The Swiss Hemp Coordination a mouthpiece for the cannabis industry in its dealings with Swiss authorities reckons that 30% of production is distributed through hemp shops, with sales for the sector as a whole running at $550 million a year.

"A lot of shops are making a lot of money because the margins are very high," says the Coordination's president Franois Reusser, who also runs the Zurich hemp shop Chanf. Behind him, a handful of youngsters are bagging up dried marijuana buds from huge paper sacks. A 9-g bag sells for around $28. "Some shops make a 50% markup on wholesale prices," says Reusser, who professes to keep his margins at 30%. "But we do have to write off losses from police seizures," he adds, "just as other shops write off losses from shoplifting."

The store has an airy, modern feel. Its shelves and other display spaces are crammed with a bewildering array of products: hemp cosmetics, hemp clothes, hemp washing powder and hemp paper. A refrigerator is stocked with hemp wine, hemp spirits and hemp beer. There are books to help you cook hemp and accessories to help you smoke it. But most customers make straight for the counter and its white plastic drawer of cellophane-wrapped marijuana. "Hemp shops are basically places that sell grass," says Reusser. "The rest has been a good way of camouflaging an illegal activity. I like all the other stuff, but it doesn't make a lot of money."

Reusser insists that his primary goal is not so much making money as changing the law. He may be about to get what he wants. The federal government announced plans this autumn to decriminalize personal possession and consumption of cannabis. In February it will unveil proposals to regulate shops and growers, a move that could involve Dutch-style tolerance, subject to a few conditions: sales restricted to certain outlets and forbidden to minors or foreigners. After parliamentary debate, a new law could take effect in 2002. "We certainly don't want to become a country which exports cannabis," says Zeltner, "and the Swiss government will not take the step of legalizing the substance." But well-dressed men are already rolling joints in Swiss train carriages without fellow passengers batting an eyelid. Heidi wouldn't recognize the place.