Alaskans are finally able to legally smoke, now that recreational marijuana legislation
has gone into effect. Like in Washington, Oregon, and Colorado, the legalization continues
to carve the path for nationwide decriminalization. But as more states allow for controlled, homegrown,
legal pot, Mexican drug cartels are left with less demand for their most popular product.
So how badly is US marijuana legalization affecting the Mexican drug trade?
Well, for Mexican cartels, growing and selling weed is an extremely lucrative business.
Other drugs, like cocaine, have much higher profit margins. But unlike marijuana, cartels
are forced to buy cocaine from Colombia, while weed can be homegrown in Mexico. According
to the White House, in 2006, marijuana made up $8.6 billion out of a total $13.8 billion
in revenue for cartels - that’s nearly ⅔ of their entire revenue stream- although this
figure has been considered high.
However, reports show that since Americans have been buying more US grown pot, the price
has plummeted from $100 a kilo five years ago, to less than $25 today. Mexican pot farmers
have reportedly complained that they cannot make enough money to justify the risk of supplying
traffickers. Plus, US grown weed can be up to four times stronger than Mexican brick
weed. And although US weed is more expensive, it does not need to be smuggled across the
border. In fact, cartels have begun to ship marijuana out of the US due to the price and
quality.
Although one Mexican think tank suggested that cartel revenue would fall by up to 50%
as a result of marijuana legalization, they really don’t seem to be struggling to make
up the difference. One of the reasons is that while states surrounding Colorado, Oregon
and Washington are mostly buying their marijuana locally, more southern states, like Texas
and New Mexico, still rely on cartel weed. And when California, which consumes one seventh
of all US pot, decriminalized marijuana, cartel profits dropped by only a few percentage points.
Some think that major cartels like the Sinaloa Cartel and the Zetas are able to withstand
lower marijuana profits by increasing their role in other illegal trade, such as heroin
and meth sales and human trafficking. Despite losing out on some marijuana profits, the
cartels continue to be as active as ever.
Colorado has learned a lot about just what legalizing pot can do for the economy and
crime rates. To see what they’ve found so far, check out our video right up here