Legal Marijuana May Be Affecting Drug Cartel Profits
By Sylvia Longmire
Contributor, In Homeland Security
Despite the availability of medical marijuana in more than two dozen states, as well as the full legalization of recreational marijuana in several U.S. states, pot fundamentally remains a black market commodity. This means organized crime groups are still involved in the drug’s manufacture and distribution, batch quality varies widely, and prices on the street are inconsistent. However, recently published U.S. Border Patrol seizure data indicates these legalization and decriminalization measures in the U.S. may be having a quantifiable impact on Mexican cartel marijuana profits.
According to a Washington Post report, recent data from the U.S. Border Patrol shows that in 2015, marijuana seizures along the southwest border tumbled to their lowest level in at least a decade. Agents seized approximately 1.5 million pounds of marijuana at the border, down from a peak of nearly 4 million pounds in 2009. Annual seizures have been steadily trending downward since that year.
It is important to understand that seizure statistics shouldn’t be used in isolation to paint a broader picture. Drug interdiction has many moving parts along the southwest border, including Border Patrol policy and agent effectiveness, shifts in smuggling routes and methods, and possibly better evasion tactics being used by traffickers. Lower seizure rates could also mean cartels are producing less marijuana in a supply-and-demand response to market shifts on the U.S. side of the border. Marijuana farmers in Mexico are feeling the pinch as well, losing as much as 70 percent of crop revenue in recent years.
Another point the Post report makes is that Mexican marijuana is not only competing with the price of domestic pot; it also has to overcome inferior quality. Mexican marijuana quality has been typical of anything mass-produced—it’s cheaper on the street, but more widely available to those who can’t afford boutique pot. However, as domestic marijuana grown with hydroponics and ultraviolet lights in controlled conditions continues to drop in price and grow in availability, it is also eating up market share at a rapid pace.
This isn’t to say Mexican drug cartels weren’t prepared for this eventuality. The major smuggling organizations didn’t reach their level of financial success by ignoring U.S. demand trends. The consumption of Mexican-origin black tar heroin in the U.S.—particularly by white middle-class teenagers—has exploded in the last decade, due largely in part to the abuse of prescription opiates like oxycodone. Mexican manufacturers have come up with a drug formulation that is purer, cheaper, and a better high than opiate pills. Black tar heroin also doesn’t have to be injected, removing that nasty stigma from the drug’s ingestion. Mexican cartels have also overtaken domestic production of methamphetamine, and have ramped up both production and distribution to make up for any lost marijuana market share.
While cocaine accounts for a small percentage of drug seizures at the southwest border, it still accounts for the largest profits for many drug cartels. The Sinaloa Federation controls much of the international cocaine market, feeding European users through routes across West Africa and making as much as $120,000 off of one kilogram of cocaine in Australia that cost the cartel only $3,000 wholesale in Colombia.
Some may consider any sustained drop in drug seizures a victory. However, it is important to remember that the number of marijuana users in the U.S. hasn’t changed—just the suppliers. Drug cartels are also nowhere near going out of business, and they are still resorting to the same deadly tactics across Mexico. The short term numbers may look good, but both users and smugglers are ready for the long game.
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