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Legalizing marijuana in California would not curtail Mexican drug organizations, study says

A new study concludes that Proposition 19, which would partially legalize marijuana in California, would do almost nothing to curtail violent Mexican drug organizations that ship the drug across the border, a finding that undermines one of the main arguments proponents have made.

The report, released Tuesday by the Rand Corp., the non-partisan research institute in Santa Monica, estimates legalized marijuana could displace Mexican marijuana sold in California, but says that accounts for just 2% to 4% of the revenues gangs get from drug exports.

The researchers said that if California’s legal pot were smuggled around the country, it could replace most Mexican marijuana sales, slicing more deeply into cartel revenues.

They say, however, that that scenario is highly unlikely. “We do not believe that the federal government will stand idly by if California were to capture the entire national market now held by Mexico-sourced marijuana,” they wrote in the report, called “Reducing Drug Trafficking Revenues and Violence in Mexico: Would Legalizing Marijuana in California Help?”

Comparing the Mexican drug gangs to the mafia after alcohol prohibition, the researchers also say that they are likely to find other businesses, just as the mafia did to replace bootlegging. In the short term, they conclude, violence might even increase as gangs fight over smaller revenues.

Proposition 19 would allow cities and counties to authorize the cultivation and sale of marijuana. It’s unclear, even if the initiative passes, how many would do that. It’s also unclear whether the Obama administration would allow it, since marijuana is illegal under federal law. The researchers do not address those issues. The initiative would also allow people 21 and older to possess as much as an ounce and grow up to 25 square feet of marijuana.

The initiative has triggered a serious debate south of the border, where a four-year campaign against drug gangs has left 30,000 people dead. Last week, Mexican President Felipe Calderon stressed his opposition, saying that the United States has done too little to suppress consumption. But Calderon's predecessor, Vicente Fox, supports the initiative and has called for legalization in Mexico.

Ethan Nadelmann, executive director of the Drug Policy Alliance, said the initiative would not solve Mexico’s drug problems in the short term, but said, “When marijuana is legal, over time, the criminal organizations are going to lose all of their competitive advantage.”

Roger Salazar, a spokesman for the campaign against Proposition 19, said it would have little impact on cartels if it passed. “There’s going to be a tremendous opportunity to traffic in marijuana and make money in avoiding the taxes, so there’s still going to be a shady element,” he said.

The Rand report takes a harsh view of U.S. government estimates of the role marijuana plays in the revenues earned by cartels, dismissing the commonly cited claim that it makes up 60%. The researchers estimated marijuana revenues at between 15% and 26%. The higher estimate was published by the drug czar in 2006, but the researchers could find no documentation to support it.

“This 60% figure is a truly mythical number, one that appeared out of nowhere and that has acquired great authority,” they wrote. “This figure should not be taken seriously.”

The report also notes that U.S. government estimates of marijuana production “have long been inconsistent and sometimes implausible.” To illustrate the absurdity of one number, the researchers calculated regular users would need to smoke a joint every two hours they are awake.

The researchers suggest the government should start collecting better data. “Existing estimates about drug production and consumption are cryptic, inconsistent, and often impossible to verify,” they conclude.

Gil Kerlikowske, the drug czar, embraced the report’s conclusion that Proposition 19 would not dent the cartels. “At a time when drug use in America is on the rise,” he said, “we must focus our efforts on actions that will protect young people from the harms and consequences of illegal drug use instead of supporting initiatives that will make our nation’s drug problem worse.”

As part of their study, which they acknowledge is replete with uncertainties that could alter the results, the researchers had to do such calculations as determining the average weight of a joint: .46 grams.

The researchers also conclude that Mexican marijuana, which is lower in quality and lower in the main psychoactive ingredient than California-grown pot, has a U.S. market share between 40% and 67%.

Putting the wholesale price of Mexican marijuana at about $400 per pound, they determined that Mexican drug organizations make about $1.5 billion from exporting marijuana to the United States.

The researchers conclude that California marijuana, grown legally, could compete with the price of Mexican marijuana, even if it were taxed. And they note that California consumers would likely prefer the state’s pot, which is at least two times as potent. In an earlier report, Rand concluded that the price of marijuana would plunge about 80%, if it were legalized.

-- John Hoeffel

Comments () | Archives (91)

I would have been curious to see the percent of transactions as well as revenue. It could be the case that marijuana is sold daily at smaller prices (one might say nickeled and dimed) while the more lucrative drugs are sold less frequently but bring in a bigger slice of the pie. But that is left inconclusive at least based on this report.

Another survey.. Ok, what time period does the survey cover. Where does the information come from? How many people were interviewed? Were the people who were interviewed asked to present pro0f of their claim? Were any of the interviewed paid for their time? It's time we stoppcd accepting just any old survey that comes along. Any survey should involve, money expended, time expended, verification of all facts used. Of course that is not going to happen, if that were required there would be no surveys taken. Come on people, I know they consider us these little sheep wondering around in a daze. accepting what ever they tell us, so let us show them that we can think. It worked with the British years ago.

Fine, so the cartels find "other businesses." That's neither predictable nor certain; however, the analogy to the prohibition-era mafia is valid, and legalizing, marketing, and taxing marijuana makes sense on many levels. Like alcohol, it's another area of our lives in which the government has no business playing babysitter.

I agree. The societal benefits of legalizing weed are probably overstated. Another similar misconception is in regards to crime associated with drug distribution within the US. In the beginning, dealers can make money selling drugs legally. But after a while, the weed market will be similar to that of any other agricultural product: run by a few very large and successful businesses. The handful of owners of these business will get very rich, while everyone else will be just an employee. Since the salary is comparable with retail jobs, dealers will go into other areas of crime to make money.

But I still think we should legalize it. Just don't expect the world to heal itself miraculously.

Free the weed!

Now we'll see how the this study holds up once Cali legalizes it. Until then it's just heresay.

Notice How Rand says its research concludes that the cartels percentage is between 2 and 4%. So......did the cartels open its books? Did the juts take an email from a drug lord at face value? I call bull when I see it. Non one knows. But that real percentage is irrelevant. The fact that it zero revenue coming to CA is all that matters Yes on 19.

Basically this report is saying that legalizing marijuana in California won't be enough to make an impact in the cartel's profits, because California only makes up 2% - 4% of the cartel's marijuana market. That sounds to me like an argument for legalization everywhere, not an argument for prohibition.

Notice how Rand just comes up with 2-4%. Did the Cartels open their books? Did the Drug Lord say "trust me", and Rand took it at face value. We call bull when we see it. Who knows what the percentage is. But it doesn't matter. All that matters is that CA's cut of the pie is zero right now, and Maxico is against 19. Nuff said. Yes on 19! Emphatically.

This is the desperation of the status quo. If they really knew so much about drug use and could predict it's behavior, wouldn't the 70 year drug war have had better progress at this point?

Marijuana prohibition is rooted in racism. No amount of sugarcoating it will change history. Remember folks, the last day to register to vote is 10/18, and the last day to submit an absentee mail in ballot is 10/26. Let's take back some freedoms from the government for a change.

There will always be something for the gangs to fight about.

I agree, legalizing marijuana will not stop the violence.

I couldn't care less whether legalization would curtail Mexican drug gangs, whether it will bring in taxes, or whether it will increase use among "children" (a red herring argument if ever there was one). Marijuana should be legal because it is virtually harmless, non-addictive, beneficial to so many, and the amount of time and money this country throws away on enforcing puritanical nonsense laws has got to stop.

If pot is legalized, demand will immediately increase, faster than supply, and so prices will jump too. Why should we expect the Mexican drug gangs to simply walk away from this piece of the action? I'm predicting Mexican-style drug warfare in places like Garberville.

Seems like LA Times is No on prop 19

Another day, another yellow journalism article by the desperate powers that be at the LA Times trying to stop Prop 19 from passing.

Another problem with the argument that decriminalizing marijuana would put a dent in the cartel's drug business is that decriminalizing marijuana use would actually legitimize their business and cut out the middle men. The cartels would simply start producing in California. Good thing about this article is that is dispels the so call 60% plus revenue non-sense.

It seems somewhat disingenuous to discuss what effect a change in California law would have on the country of Mexico. I would think most people voting on Prop 19 are more concerned about what effect it will have on the state of California. Those effects should include less tax dollars sent on prosecuting and punishing low level drug offenders and freeing up law enforcement resources to go after the more damaging drug problems in the state.

We have to start somewhere. (1) Remove the profits from crimminals (2) Stop crimminalizing people for smoking a plant; those who want to will anyway.

In truth, marijuana isn't the focus of the problem anymore. The efforts by authorities in the US over the last decade and a half to stamp out the mom-and-pop meth labs on this side of the border have led to an unexpected consequence--industrial-scale production by the Mexican cartels. It might help, though, if legalization of weed freed up resources to fight the meth trade, whose product is genuinely destructive.

Unfortunately, as long as Federal law remains as it it, and as long as the DEA continues to receive extravagant funding to fight "killer weed", we're likely to see a lot of time and treasure wasted on turf battles between the Feds and state and local authorities.

And why should we believe the figures the Rand Corporation puts forth?
The cartels derive most of their income from the sale of cocaine and heroin, much smaller quantities sell for much more than marijuana, which takes up more space.
It is important that proposition 19 be passed if for no more reason than the marijuana be separated from the truly dangerous drugs such as cocaine and heroin. Illegal purchases of marijuana often expose the buyer to much more dangerous drugs and the cartel representatives.
Marijuana that is now selling for around $300 to $400 per ounce is more frequently smoked in small pipes or bongs. Rolling and smoking joints is wasteful as one watches their expensive pot go up in smoke.
The regulation, taxing and selling of marijuana for adult use will not guarantee that those under twenty one will not obtain and use pot any more than alcohol and tobacco laws. But there will be savings from law enforcement in the ever failing and more costly war on drugs and incarceration from mere possession. The monies thus made available can be used for education and treatment in addition to helping the state and perhaps the country with its high deficit.
This whole article celebrates the agenda driven and unsupported blathering of corporate interests who rightly are concerned that the much less harmful and legal marijuana will take money away from the alcohol and tobacco industries.

Yet another opinion report by the Rand Corp.
First, they say the price will drop by %80 to try to counter the tax revenue claim by the pro regulation side.
Now, they try to counter the argument that it will decrease cartel revenue.

Next, I predict a 'report' by the Rand Corp that says marijuana does in fact cause blacks to walk on white peoples shadows and rape our sisters and wives.

This column looks at the money statistics, which are probably all just made up numbers anyway.. Guesstimates and numbers pulled out of the air.
There are other issues involved.
The great harm to people caught up in the criminal justice system for a harmless activity. The cost to the taxpayers for prosecution and housing of prisoners.
All these costs will go away 100% if marijuana is legalized.
It really doesn't matter what the exact numbers are for these savings because all savings are good. The revenue is just gravy. Not wasting money on the issue is very important too.

According to DEA testimony before congress, marijuana is a significant source of income for drug cartels:

"The profits derived from marijuana trafficking—an industry with minimal overhead costs, controlled entirely by the traffickers—are used not only to finance other drug enterprises by Mexico’s poly-drug cartels, but also to pay recurring “business” expenses, purchase weapons, and bribe corrupt officials. "

Sure, not all of their profits come from CA but there can be no doubt that legalization in CA will take some of their profits and legalization in CA could lead to nation wide legalization and that certainly would not be good for drug cartels.

Has the LA Times published anything on this subject that is not anti-legalization propaganda?

The Rand Corp is funded in part by BIG pharma and the insurance lobby. How did they gather statistical evidence from drug cartels? Their argument is a slippery slope using a red herring as its' precipice making it invalid even as a fallacy. The researchers even state their conclusion: “Existing estimates about drug production and consumption are cryptic, inconsistent, and often impossible to verify.” What a useless article.

Hang on...

So, partially legalizing pot in just 1 of the 50 states would drop Cartel drug revenues 2-4%? And somehow the LA Times is spinning this as DISPROVING Prop 19's claims that legalization would hurt the cartels?

Just a quick back of the napkin calculation: even using the more conservative 2% and assuming that CA smokes twice as much as the average state, a national version of Prop 19 would cut Cartel drug revenue 51%!!

That's not significant?

Trust me, if Coca Cola saw profits from regular Coke drop 51%, they would be scrambling.

No one ever said that legalizing pot in just CA would somehow kill the Cartels all by itself. And to imply as much is disingenuous at best. Come on LA Times.

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