Legalization of Pot in California Could Hurt Mexican Cartels

by on July 17, 2010 · 15 comments

in Civil Rights, Culture, Economy

marijuana_bust_osp_71606by R. M. Schneiderman / Newsweek / July 17, 2010

So far, no modern country has ever legalized marijuana production—not even the Netherlands. Yet with heavy drug-related violence plaguing the U.S.-Mexican border, some analysts and policymakers now say that America should legalize weed in order to reduce the power of Mexico’s drug cartels.

Marijuana carries the least amount of overhead cost for many of the cartels and provides some of their cash flow for buying guns and influence. Estimates vary, but analysts say pot accounts for somewhere in the range of 20 to 50 percent of the cartels’ profits. But that could soon change with competition from El Norte: California has a proposition set for the November ballot—on which voters are roughly split—that would legalize the drug’s domestic production and sale.

If the measure passes, says a recent analysis by the RAND Corporation, California could become a major supplier of the drug to the rest of the U.S. That, according to George W. Grayson, a professor of government at William & Mary, “would hurt the cartels badly.” RAND estimates that it could reduce the drug’s pretax price by more than 80 percent.

Mexican_drug_cartels_2008

Mexican Drug Cartels, 2008.

Of course, whether legalization has any real effect depends on the rate at which the drug is taxed. A tax rate of $50 per ounce, for example, would generally not make high-grade California cannabis cost-competitive with less potent Mexican imports. Yet a lower tax rate could significantly decrease the cartels’ market share. That wouldn’t put them out of business—they’d still be major players in the markets for cocaine, heroin, and meth—but it could reduce their power.

Editor: Here is an earlier article by Linda Sanchez for the Arizona Republic raising the same issue.

{ 15 comments… read them below or add one }

avatar nunya July 17, 2010 at 10:26 am

linked to you :)

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avatar Editordude July 17, 2010 at 11:23 am

Great! Now when will you be writing for us (we’ll link to your website)?

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avatar nunya July 17, 2010 at 12:00 pm

You guys are doing just fine without my deplorable writing skills!

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avatar Ricky v July 17, 2010 at 11:10 am

Nice Weekly poll , Now start practicing what you preach.

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avatar Editordude July 17, 2010 at 11:25 am

Huh? We’ve been doing that – practicing what we preach, and we also preach what we practice. We also peach what we access. Plus we beach what we excess.

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avatar Molly July 17, 2010 at 11:26 am

Whatcha been smokin?

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avatar Molly July 17, 2010 at 11:28 am

Hey, if pot is legalized, will you guys at this blog post comparisons of different weeds? Or weed out the different comparisons of posts?

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avatar Sarah July 17, 2010 at 10:14 pm

heh… too cute

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avatar Chris Moore July 17, 2010 at 1:23 pm

I’m pretty skeptical this thing will pass, no matter how much sense it makes.

Like Prop. 8, the haters are going to come out in droves and vote against it just because they can – there’s nothing as rewarding as using your vote to screw someone else over, at least if you’re a bitter angry crank.

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avatar nunya92110 July 20, 2010 at 10:43 am

Right now the polls are too close to call, but the drug cartels (and the medical marijuana dispensaries) are against the law and money has been flowing into the campaign against it. Soon we will see a rash of commercials denouncing the legalization of marijuana.

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avatar Frank Gormlie July 17, 2010 at 1:30 pm

This article sure makes alotta sense. Just like in the 30’s, when FDR overturned the prohibition of alcohol, the organized crime empires crashed. Of course they got into something else, but at least booze was legal. Same thing here: make it legal and all those crime-organizations will lose their material base.

Chris, don’t be too pessimistic – I hear even Roger Hedgecoke is for legalization.

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avatar OB Joe July 17, 2010 at 1:32 pm

All this talk, talk, talk. Now I have to go smoke some.

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avatar Patty Jones July 17, 2010 at 1:49 pm

Joe, promise you’ll come back soon and indulge us in your after-party wisdom?

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avatar OB Joe July 17, 2010 at 2:55 pm

Patty, things are still as fugged up as normal. SNAFU, FUBAR – but being high does help. (tip of the hat to Ed Decker for bringing us back to “fug-land” – popularized by a famous novel from the fifties about WWII. What was it and who was the author?)

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avatar nunya92110 July 20, 2010 at 10:35 am

The United States could literally GIVE away all the Cocaine, Meth, Heroin and other drugs for anyone that would use them in a controlled setting provided by the government all while providing increased drub abuse education and a bed for every person seeking treatment (currently one in 15 that want it can get treatment) for the $28 billion price tag of interdiction alone. This does not include the savings we would see on the current cost of police, jails and others in the criminal justice system if all drugs were legalized.

To keep the average Joe from selling these drugs you could actually increase the penalties for dealing amounts over a kilo of any of the serious drugs like Cocaine, Meth and heroin to life imprisonment as a deterrent to use outside the system.

I don’t think this would ever happen because those cartels you have spoken about would simply kill, bribe or blackmail any politician who broached the subject.

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