The Washington Post recently reported that the Sinaloa cartel, Mexico’s oldest and most powerful, is selling a record amount of heroin and meth in Chicago as it takes its burgeoning marijuana trade to the next level.
But Amendment 64 in Colorado and I-502 in Washington both passed on election night, making marijuana legal for persons 21-years-old and older while taxing it under a tightly regulated system similar to that for controlling hard alcohol in those states.
The Mexican Institute for Competitiveness (IMCO), a Mexico City think-tank, published a report detailing how legalization at the state level could sink cartel revenues from drug trafficking because “one or more states could meet most of its domestic demand with domestic production.”
Since the quality of U.S.-grown marijuana is much better than Mexico-grown, the IMCO figures that domestic bud from Colorado or Washington would be cheaper everywhere in the country besides near the border.
Consequently, the IMCO estimates that cartels would lose about $1.4 billion of their $2 billion revenues from marijuana.
Furthermore, other drug exports would become less competitive as fixed costs such as bribes, transportation and fighting rivals would remain the same.
The study notes that there is “considerable uncertainty about the effect a substantial loss of income might have on the behaviour of Mexican criminal organisations and, therefore, on the security environment in Mexico.”
Nevertheless, it’s a potential gamechanger. The Economist puts it best: “Legalization could, in short, deal a blow to Mexico’s traffickers of a magnitude that no current policy has got close to achieving. The stoned and sober alike should bear that in mind when they cast their votes on Tuesday.”
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