Dutch "magic mushroom" vendors lost a court appeal Tuesday against a December 1 government ban on the hallucinogenic recreational fungi.
"The magic mushroom ban is not unjust," the Appeals Court in The Hague said, dismissing a challenge by the owners of the so-called "smart shops" that sold the drug.
"The effect of the ruling is that the magic mushroom ban, effective from December 1, 2008, remains in place."
The ban was introduced by Health Minister Ab Klink, who believes consumption of the fungi "can lead to unpredictable and risky behaviour".
It followed the death in 2007 of a French teenager who had taken mushrooms before jumping to her death from an Amsterdam bridge, reigniting a national debate over tolerance of the substance.
The ban, approved by lawmakers, forbids the cultivation and sale of 186 species of "shrooms" or "paddos", which also grow naturally in the wild.
The dried variety has been illegal in the country for several years.
"We are deeply disappointed," Paul van Oyen, a spokesman for the magic mushroom vendors' association VLOS, told AFP. "The court is allowing the minister to get away with lies."
VLOS maintains there is no proof that magic mushrooms are dangerous and is demanding compensation for the loss of income.
Before the ban, there had been six magic mushroom growers in the Netherlands, 180 smart shops, and a few hundred employees in an industry with an annual turnover of 15-20 million euros (20-26.5 million euros), according to the VLOS.
Authorities say about 90 percent of the 1.5 million to two million doses consumed in the Netherlands every year were bought by foreign tourists.
"We will not pursue this in the courts," said Van Oyen. "It is too expensive. We will retire to lick our wounds."
The magic mushroom ban is seen as part of a hardening stance on recreational drug use by the traditionally liberal Dutch, who have also been closing some cannabis-vending coffee shops.