I use the following to display the contents of a MARKDOWN.

from 
https://github.com/bradermacher/web2py-plugin-authman/blob/master/controllers/plugin_authman.py

....

def index(): 
  # Read plugin description and display. 
  # Some logic in view (status of plugin and authorization 
  from os.path import join as pathjoin 
  from gluon.contrib.markdown import WIKI as MARKDOWN 
  with open(pathjoin(request.folder,'private', 'plugin_authman.README.md')) 
as f: 
    data = f.read() 
  return dict(data=MARKDOWN(data))
...

from 
https://github.com/bradermacher/web2py-plugin-authman/blob/master/views/plugin_authman/index.html


...

> {{extend 'layout.html'}}
>
> {{=data}}
>
>
> ...

Hope this helps

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