Marijuana legalization is already making Mexican drug cartels poorer


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We’re still not sure of the full impact of marijuana legalization, in terms of pot use and abuse, in the states that have legalized. But a report from Deborah Bonello for the Los Angeles Times shows one way that legalization for recreational and medical purposes is working:

The loosening of marijuana laws across much of the United States has increased competition from growers north of the border, apparently enough to drive down prices paid to Mexican farmers. Small-scale growers here in the state of Sinaloa, one of the country’s biggest production areas, said that over the last four years the amount they receive per kilogram has fallen from $100 to $30.

The price decline appears to have led to reduced marijuana production in Mexico and a drop in trafficking to the U.S., according to officials on both sides of the border and available data.

As Bonello reports, the drop in price — and competition from higher-quality US-made marijuana — is hitting drug cartels, too. So now they have to look to other opportunities, or look for ways to deal in high-quality cannabis, to make up for lost profits, or just accept the hit in their finances.

This was a predictable outcome of legalization, but still a big deal and welcome news. One of the major arguments for legal pot is that it will weaken drug cartels, cutting off a major source of revenue and inhibiting their ability to carry out violent acts — from mass murders to beheadings to extortion — around the world. And cannabis used to make up a significant chunk of cartels’ drug export revenue: as much as 20 to 30 percent, according to previous estimates from the Mexican Institute of Competitiveness (2012) and theRAND Corporation (2010).

Will this be enough to completely eliminate drug cartels? Certainly not. These groups deal in far more than pot, including extortion and other drugs like cocaine and heroin.

Still, it will hurt. As the numbers above suggest, marijuana used to be a big source of drug cartels’ revenue, and that’s slowly but surely going away. It’s still possible that legalization in America could produce downsides in the US, such as more cannabis abuse. But it’s a potentially huge win for Mexico and other Latin American countries.

The big argument for drug legalization is reducing drug cartels’ power around the world

What if I told you that the US could sacrifice tens of thousands of American lives to potentially save a few thousand lives in Canada and other developed nations? Would it seem like a good trade-off to you?

Most Americans, I’d guess, would not accept this trade-off. But that’s what developed countries, including the US, essentially expect from Mexico and other developing countries embroiled in drug violence as a result of the war on drugs. In a 2014 paper, economists Daniel Mejia and Pascual Restrepo explained:

Suppose for a moment that all cocaine consumption in the US disappears and goes to Canada. Would the US authorities be willing to confront drug trafficking networks at the cost of seeing the homicide rate in cities such as Seattle go up from its current level of about five homicides per 100,000 individuals to a level close to 150 in order to prevent cocaine shipments from reaching Vancouver? If your answer to this question is ‘perhaps not,’ well… this is exactly what Colombia, Mexico and other Latin American countries have been doing over the last 20 years: implementing supply-reduction policies so that drugs don’t reach consumer countries at the cost of very pronounced cycles of violence and political corruption, with the consequent losses of legitimacy of state institutions.

The way the drug war works is that developing nations, such as Colombia and Mexico, act as manufacturing and transshipment countries for drugs, while the US and other wealthy countries make up the great majority of demand for these illicit substances. So criminal groups will produce cocaine in Colombia and ship it to Mexico, and the drug is smuggled into the US from there.

It’s not that Colombians or Mexicans don’t use drugs, but demand in the US — where people are wealthier and can thus better afford an expensive drug habit — is much higher. This is obvious in national drug surveys: They show that about 1.5 percent of Mexicans ages 12 to 65 in 2011 used illicit drugs in the previous year, while about 8.7 percent of allAmericans 12 and older in the previous month did in 2011. (The age and timespan differences are due to differing methodologies in national surveys, but they nonetheless show that way more Americans than Mexicans use drugs.)

In theory, the Mexican government and those in other developing nations should be able to stop drug violence within their borders, and crack down on drug trafficking groups to suppress crime just as well as the US and other developed nations have. The problem is Mexico and other developing countries don’t have the incredibly powerful political, economic, and criminal justice institutions that developed nations have. So drug trafficking organizations can exploit these weaknesses, build up huge operations, and effectively wage war within developing countries.

What’s worse, the drug war makes it harder for developing countries to build up these institutions. For one, the threat of violence is generally destructive and makes it tough for any of these countries to see the kind of meaningful economic growth that is necessary to build up any institutions. But the drug war also gives drug trafficking groups enormous profits — through the black market of prohibited drugs — allowing them to bribe, extort, blackmail, and finance a war against any government entity that poses a threat.

Developed countries have tried to alleviate all of these issues by helping developing countries finance their own war on drugs, such as the US-funded Merida Initiative for Mexico. But these measures either fail to suppress violence — as shown by Mexico’s war on drugs, in which as many as 80,000 people have died — or shift violence to other countries that aren’t getting as much support, as happened when drug trafficking operations moved from Colombia to Mexico and Central America after the US government helped Colombia crack down on drugs in the 1990s and 2000s.

The final result: a never-ending cycle of a violent trade-off that most Americans would consider unacceptable within our own borders. Legalizing pot — and perhaps other drugs — might help cut into that cycle, as the Los Angeles Times report shows.

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