One of the more popular conservative arguments for the legalization of marijuana (and other illicit substances) is that legalization immediately kills the black market for said products. For many this argument is not compelling because it does not deal with the moral questions which surround the legalization of such products but that doesn’t mean that the argument isn’t valid. Thanks to federalism, we are starting to see proof that the legalization argument may be right about destroying the black market for drugs. Today, marijuana is legal in many locales scattered across the country and Mexican drug cartels are having trouble matching prices and quality of the legal American product.
The growth of the U.S. marijuana industry has devastated drug cartels in Mexico, evidenced by fewer seizures of cannabis at the border and, according to Mexican security forces, a drop in total homicides and domestic marijuana production rates.
Mexican drug cartels are finding it difficult to compete in the cannabis market not only in terms of price, but also quality, given that the U.S. industry is starting to label products according to THC content, CNBC reports. According to The ArcView Group, a cannabis research firm, the marijuana industry in the U.S. grew 74 percent in just one year, up from $1.5 billion in 2013 to $2.7 billion in 2014.
Marijuana from Mexico, on the other hand, is often mass-produced in less than ideal conditions, with no guarantee as to the safety of the product.
Advocates who initially pushed for legalization in Washington and Colorado have argued strenuously in the past that increased access to marijuana in the U.S. would mean a decline in drug-related violence and revenue for the cartels in Mexico.
Homicides in Mexico have dropped from 22,852 in 2011 to 15,649 as of 2014, which tracks relatively closely with the legalization of marijuana in Colorado and Washington, although the link between the two events is not conclusive.
Last year, agents from the U.S. Border Patrol seized just 1.9 million pounds of marijuana. While that may seem like a large amount, it actually constitutes a 24 percent reduction from the 2.5 million pounds seized in 2011. On the domestic side, Mexican authorities in 2013 seized just 1,070 tons, which marks the lowest amount since 2000.
“Two or three years ago, a kilogram [2.2 pounds] of marijuana was worth $60 to $90,” Nabor, a 24-year-old pot grower in the northwestern Mexican state of Sinaloa, told NPR. ”But now they’re paying us $30 to $40 a kilo. It’s a big difference. If the U.S. continues to legalize pot, they’ll run us into the ground.”
Another nail in the coffin for drug cartels is the gradual trend of leniency towards marijuana in Mexico. As of 2009, the country decriminalized the possession of small amounts of marijuana.
But cartels have adapted and shifted to the U.S. side of the border, bringing in high-quality marijuana to Mexico, rather than producing the crop themselves before exporting for illicit sale to U.S. consumers.
“Traffickers who are operating in the U.S. are securing marijuana in the U.S. that is much higher quality and more expensive for the purpose of smuggling back into Mexico for sale and distribution,” DEA spokesman Lawrence Payne told U.S. News back in December.
Cartels have also diversified by moving into illegal mining and sex trafficking, as well as harder drugs like meth.
“In the long run, it looks like the US market for illegal Mexican marijuana will keep shrinking,” said Mexico drug expert Alejandro Hope. “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.”
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