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US Legalization Initiatives Impact Mexican Cartels

Bill Weinberg



Is the relieved pressure on cannabis in the United States undermining the Mexican cartels, as we’d long hoped? There are encouraging signs. Global Post cites a new report by California cannabis industry think tank The ArcView Group, finding that legal marijuana sales jumped 74% in 2014 to a new high of $2.7 billion—a growth pace expected to continue for several more years. And Mexican producers may be taking the hit. In 2014, the US Border Patrol saw a plunge in pot seizures—1.9 million pounds, down 24% from 2011, the year before Colorado and Washington voted to legalize.

Mexico also reports a drop in cannabis interceptions. In the most recent figures (released in September), Mexican authorities said they seized 971 metric tons (1,070 US tons) of cannabis in 2013, the lowest figure since 2000. “In the long run, it looks like the US market for illegal Mexican marijuana will keep shrinking,” said analyst Alejandro Hope (a veteran of Mexico’s intelligence agency CISEN). “The logic of the legal marijuana market is that it will force prices down. This would take out the big profits from the illegal market. A good way to make some money could be to short the prices of marijuana.”

Here’s the bad news. The Washington Post reports that US agents seized 2,181 kilograms of heroin coming in from Mexico last year—nearly three times the amount confiscated in 2009. Methamphetamine seizures at the border jumped, too. Said Raul Benitez-Manaut of Mexico’s National Autonomous University (UNAM): “Legalization of marijuana for recreational use has given US consumers access to high-quality marijuana, with genetically improved strains, grown in greenhouses. That’s why the Mexican cartels are switching to heroin and meth.”

So are the new legalization policies north of the border helping or paradoxically hurting? Probably both. By this time, the cartels are so entrenched that undermining them is not an easy proposition. In addition to meth and smack, they have lucrative rackets in ransom kidnapping, human trafficking, and even bootlegged minerals and oil. There isn’t any magic wand we can wave to make them go away. But we can take measures that begin to weaken them. And the switch from compacted cannabis bricks to refined powders was underway for decades before 2012—because the latter are easier to smuggle and deliver more bang for the buck. It’s also important to remember that as cannabis use rises in the United States, meth use has been dropping.