FROM the Colorado state capitol in Denver, head south on Broadway, one of the city’s main arteries, and before long you find yourself in “Broadsterdam”, a cluster of dispensaries with names like Ganja Gourmet and Evergreen Apothecary. They peddle dozens of strains of pot, as well as snacks, infusions and paraphernalia, to any state resident bearing a “red card”: proof of a doctor’s recommendation.

Landlords in the area were struggling, says William Breathes (a pseudonym), whose reviews for a local paper make him, he says, America’s first mainstream pot critic. But when Colorado began to regulate the sale of marijuana for medical use in 2010, they saw an opportunity.

Broadsterdam of 2013, and many places like it in America and Europe, would have been unimaginable in New York in 1961, when diplomats hammered out the Single Convention on Narcotic Drugs, which aimed to counter the “serious evil” of addiction. That treaty, with 184 countries signed up, underpins the prohibition policy of the past half century. Though an international debate on legalisation has barely started, experiments are already showing how the production and consumption of drugs could be regulated.

Change is coming because the “war on drugs” is being convincingly won by drugs, and the powerful criminal gangs who deal in them. Since 1998, when the UN held an event entitled “A drug-free world: we can do it”, consumption of cannabis (marijuana) and cocaine has risen by about 50%; for opiates, it has more than trebled. And a swelling pharmacopoeia of synthetic highs is spinning heads in dizzying new ways. The UN reckons that 230m people used illegal drugs in 2010. They and their suppliers (usually the humblest ones) fill prisons in rich and poor countries alike. Drug convictions account for almost half of American prisoners in federal jails.

Burned at both ends

If efforts to stem demand have been futile, trying to control supply has been disastrous. The illegal-drug industry’s revenues are some $300 billion a year, according to the very roughest of guesses by the UN, and flow untaxed into criminal hands. Drug-running mafias corrupt and destroy the places where they operate. Of the world’s eight most murderous countries, seven lie on the cocaine-trafficking route from the Andes to the United States and Europe. Only war zones are more violent than Honduras. More than 7,000 of its 8m citizens are murdered each year. In the European Union, with a 500m population, the figure is under 6,000.

Latin American leaders are tiring of this. Trying to stop the flow of narcotics is akin to the legendary Sisyphus futilely pushing a boulder uphill, says Fernando Carrera, Guatemala’s foreign minister. In recent years his country has laboriously cleared its San Marcos region of opium crops, only to see it replanted five times. The president, Otto Pérez Molina, now wants to see global legal regulation of all drugs, from hashish to heroin, albeit with strict controls. Juan Manuel Santos, president of Colombia, favours legalisation, but says that his country cannot lead the way. Last year Felipe Calderón, the outgoing president of Mexico, declared it “impossible” to stop the drugs business and called for “market alternatives”. Uruguay’s government has sent to congress a bill to legalise the sale of pot through state-backed dispensaries. Smokers would be allowed to buy up to 40g per week, with profits funding crime-prevention and anti-addiction schemes.

In parts of the United States, change has already come. In November voters in Colorado and Washington backed proposals to legalise, tax and regulate cannabis for recreational use. State officials are now scrambling to draft the practical rules. On February 28th a task force charged with producing recommendations for the Colorado legislature will issue its report.

Though non-binding, this will be the first glimpse of what a fully formed regulatory regime for legal cannabis may look like. Although plenty of countries (and 15 American states) have decriminalised cannabis possession, in many cases treating it as no worse than a traffic infraction, nowhere has fully legalised its supply. Within a year the entire supply chain in Colorado and Washington, from cultivation to manufacture to retail, will be within the law. State coffers will gain tax and fee revenues and save in law-enforcement resources (maybe $60m a year in Colorado). Licensed outlets will appear on the streets.

Assuming, of course, that the federal government consents. Marijuana remains illegal under America’s Controlled Substances Act, the 1970 law that implemented the Single Convention in the United States and that is still the foundation of federal narcotics policy. The CSA classifies it as a “Schedule I” substance, meaning it can easily be abused and has no recognised medical value. (A federal appeals court recently rejected an attempt to have it reclassified.)

In December Eric Holder, the attorney-general, said that the justice department would issue a response to the state laws “relatively soon”. But for the time being the department says only that it is reviewing the state initiatives, and that marijuana remains illegal under federal law. Shortly after Mr Holder’s statement, Barack Obama told a television interviewer that he would not make it a priority to prosecute pot smokers in the two states. But the federal government has never had the resources to target users, only big traffickers.

One clue to the future comes from the 18 states plus Washington, DC, where medical marijuana is legal. The Feds have come down hard on some growers and distributors in states that have drafted their laws poorly. In 1996 California was the first state to approve medical marijuana but lawsuits clog the courts, competing regulatory ballot measures confuse voters, and in some cities pushy dispensaries unnerve residents. In better-regulated places (like Colorado) the federal authorities have done little. A big issue will be leakage of legal marijuana from Colorado or Washington to other states. After meeting Mr Holder in January, Jay Inslee, the governor of Washington, told reporters that the state would pay particular attention to this.

For some, that is a futile gesture. “We’ll become the source for most of the rest of the country,” says a weary Tom Gorman, of the Rocky Mountain High Intensity Drug-Trafficking Area, a federal anti-drug outfit in Denver. Last year it tracked dozens of cases of diversion of Colorado’s medical marijuana, finding it in 23 states. Legalisation will add to the flow.

Yet diversion also makes life more difficult for the criminal gangs of Mexico, which are reckoned to supply anything between 40% and 70% of America’s pot. Their trade reaps profits of $2 billion a year according to IMCO, a Mexico City think-tank; cocaine profits are $2.4 billion. Part of the business model is murder: of around 70,000 people over the past five years. But IMCO reckons that once Colorado and Washington’s growers get going, the Mexicans could lose nearly three-quarters of their American customers (though others question these numbers).

Much will depend on how the state laws take shape. The Colorado task force has already suggested letting retailers serve non-residents, possibly in limited amounts. It also wants to relax restrictions on financial services for the industry. Many dispensaries struggle to obtain even basic banking and credit.

Trying to stay upright

Jack Finlaw and Barbara Brohl, who chair the task-force, are also pondering the “vertical integration” rules that have shaped the state’s medical-marijuana industry. Dispensaries must grow at least 70% of the marijuana they sell. Some cultivate it in-house; most grow it in off-site warehouses. This hampers distribution and wholesale markets. Rob Corry, a pro-legalisation lawyer, terms it “absurd, like a supermarket owning apple orchards”. As elsewhere, tight rules have costs. But they have also helped citizens get used to an unfamiliar trade. “We’ve shown that we can make the industry work here,” says Ean Seeb of Denver Relief, a leading dispensary.

Public acceptance, plus a clever campaign (paid for partly by outside money), led to victory in Colorado. Washington’s medical-marijuana industry is less advanced, but opponents of legalisation there were even more widely outspent.

More changes are looming. As with gay marriage (see chart), something that seemed revoltingly decadent to many Americans in past years has rapidly won acceptance. Campaigners are seeking further wins, mainly in the relatively liberal states of the west and north-east. Some dare to dream of changing federal law. Their foe is the mighty prohibition industry: officials and bureaucrats who have spent their professional lives combating illegal drugs. Law-enforcement officers and Drug Enforcement Agency (DEA) officials have written to Mr Holder urging him to uphold federal law. Yet others counter that legalising pot will boost consumption, particularly if it can be advertised and marketed. That brings fears of health and other risks. Others counter that smoking more dope would mean people drank less alcohol, which is arguably a more destructive drug. But the effect could be the other way round. What legal pot would mean for tobacco and cocaine use is also unknown. Cannabis policy is changing in Europe, too. At Santa María, a shop across the street from one of Madrid’s main hospitals, customers queue to buy fertilisers, potting earth and imported Dutch cannabis seeds. The owner, Pedro Pérez, cheerfully warns customers not to plant until late in March when the frosts have gone. Spain’s approach now rivals that of the pioneering liberal Dutch. Though selling is illegal, buying is not. One result is hundreds of cannabis “social clubs”, which allow members to pool their purchases. These range from small co-operatives where new members must wait six months for new cannabis to be grown before joining, to huge semi-commercial organisations, with thousands of “members” buying cannabis. One in Barcelona even made a €1.3m ($1.74m) deal with the country town of Rasquera to grow supplies on local land, better known for its almond trees. Similar experiments are under way in France, Belgium, Italy and Germany, says Tom Blickman of the Transnational Institute, a think-tank based in Amsterdam. In much of Britain, especially its big cities, the risk of prosecution for those using small quantities of soft drugs is vanishingly low.

But the most comprehensive policy comes from Portugal. In 1997 opinion polls rated drug use the country’s biggest social problem. Now, 12 years since the decriminalisation of personal use of small amounts (meaning less than ten days’ worth) of all drugs, it ranks 13th. All parties now support the policy of treating drug use as a health issue, not a crime. HIV rates have plummeted, too, says João Goulão, the national drugs co-ordinator.

But decriminalisation is not the same as legalisation. Portugal uses “dissuasion boards”, made up of doctors, psychologists and other specialists. They aim to get addicts into treatment and to prevent recreational users from falling into addiction. When necessary they can impose fines and community work. By removing the “fear and stigma” of criminal punishment, says Mr Goulão, drug users are encouraged to seek the help they need.

Brendan Hughes, of the Lisbon-based European Monitoring Centre for Drugs and Drug Addiction (EMCDDA), an agency of the European Union, says Portugal stands out for its “consistency and comprehensiveness”. Other countries wanting to focus on health have only “tweaked” their criminal laws, he says.

In 2009 the Czech Republic decriminalised possession of most drugs along Portuguese lines. In December it went further, fully legalising medicinal cannabis. The plan is for imports—probably Dutch or Israeli—to be sold in pharmacies, says Jindrich Voboril, the head of the government drugs council. If that works, it will then license a number of competing companies to grow supplies locally.

The elusive molecules

The other big policy innovation in Europe has been to drop punitive policies in dealing with heroin and cocaine addiction, in favour of harm reduction (see article). But a much bigger worry now is the rise of legal highs. The EMCDDA reports that a new psychoactive substance is found weekly, on average. These concoctions are openly marketed as “plant food” or “research chemicals”. Mephedrone and ketamine—both legal highs until recently—have become mainstream clubbing drugs in Britain, taken alongside ecstasy and cocaine. Tim Hollis of the British Association of Chief Police Officers says that the police are “flat-footed” trying to keep up. Many of the new drugs do more harm than the illegal narcotics that they are replacing.

The legal regime governing cocaine is more controversial. Some countries, including Portugal, Mexico and Colombia, have decriminalised the possession of small doses of the drug, referring users to treatment rather than giving them a criminal record. But the harm cocaine does to health and its addictive nature make governments queasy about legalising its sale.

High in the Andes, regulated cultivation for “traditional” use (coca leaves give a mild caffeine-like buzz and suppress hunger, cold and altitude sickness) has been going on for decades. In Trinidad Pampa, a tiny village in Bolivia’s mountainous Yungas region, the hillsides are divided into neat terraces, where coca saplings are planted after being cultivated in beds enriched with rice-husks and sand. The whole village is involved. Children and even toddlers help their parents.

The 1961 narcotics convention banned coca along with cocaine (albeit with a long transitional period). But on January 11th Bolivia became the first country to negotiate a partial opt-out from the treaty. It was readmitted with a get-out clause for coca, having resigned last year over the ban on what its president, Evo Morales, calls the “sacred leaf”. A former coca-grower and union leader, he enjoys grandstanding against America (he expelled its ambassador in 2008 along with DEA officials).

In 2004, following protests by coca growers led by Mr Morales (then in opposition), Bolivia brought most of its 28,000 hectares of coca fields within the law. The government claims that increases in population and heavy use among miners and truckers justify the extra growing-permits. But sales figures suggest that in fact most coca goes elsewhere. Leaves must be sold in state-controlled markets, which in 2011 bought just over 18,000 tonnes from farmers. The UN estimates that potential production was about 48,000 tonnes. Most of the missing 30,000 tonnes leaked into the cocaine business, reckons César Guedes, head of the UN drugs office in La Paz.