ABC News Downtown went to Holland to take a look at the nation's tolerant drug policy.

Some of America's biggest taboos thrive in the Netherlands, where prostitution is a legitimate and profitable industry, and same-sex marriage and euthanasia are legal.

And in 1976, the Netherlands decided to tolerate — meaning allow without legalizing — the sale and use of cannabis in some 1,200 licensed "coffee shops."

While Dutch officials believe their policy of tolerance is the antidote to the presence of harder drugs, Downtown's hidden cameras encountered a different reality. Dealers were on what seemed like every street corner, selling drugs like heroin and cocaine.

All drug use — not just marijuana — is decriminalized in Holland, but the growers who supply the drugs operate illegally and can face prosecution.

'Remarkably Benign Drug'

The age minimum to purchase marijuana or hashish (a drug made from hemp) is 18, and the daily limit is 5 grams (.2 ounces), which is the equivalent of about five joints.

"The customer base is everybody from 18 to 80," says Arjan Roskam, who operates the Greenhouse Coffee Shops in Amsterdam. "A lot of politicians. I have a lot of police officers. They're all allowed to smoke in Holland."

American psychologist Art Lecesse went to Holland to research drug use. He was so impressed by the policy that he moved there.

"Here, you don't have to go to jail if you're a marijuana smoker," says Lecesse. "The goal is to try to keep young people in particular away from the criminal drug environment that may get them involved with the harder drugs such as cocaine and heroin."

He adds: "Just like there are many people in the United States who think it's OK to have a beer with lunch, there are also many people here who feel it's OK to smoke a joint after lunch. … All Holland is doing is acting on pharmacological evidence that in terms of its acute and long-term affects, marijuana is a remarkably benign drug."

Dr. Els Borst, the Dutch minister of health, says cannabis does not have serious health risks. "People have died from tobacco and alcohol, from heroin, from cocaine. But never from cannabis," she says.

Steppingstone for Harder Drugs?

Borst also points to a study that shows among Dutch citizens who smoke cannabis, 75 percent abstain from all other drugs.

But retired Gen. Barry McCaffrey, the former U.S. "drug czar," believes marijuana is a steppingstone to harder drugs.

"We don't agree that marijuana is a benign drug. We think it leads to dysfunctional behavior, it requires effective drug treatment and we want to see high social disapproval of marijuana use," McCaffrey told Downtown .

He has called Dutch drug policy "an unmitigated disaster," and says that half the teenagers entering drug treatment programs in the United States are chronic abusers of marijuana.

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