Legalizing Pot Makes Mexican Cartels Even More Dangerous

The Fiscal Times

The growing movement to legalize marijuana is radically altering the way Mexican drug cartels do business, forcing them to seek other revenue streams through increased illegal activity.

Right now, only Washington State and Colorado have decriminalized pot. Taken together, they account for just a small portion of the American marijuana market. But that’s just the start of a trend that’s growing like a weed.

Peter Reuter, a professor at the University of Maryland’s School of Public Policy and Department of Criminology, said he expects the decriminalization movement to grow rapidly in the coming years.

“I’ve always been quite skeptical that anything would come of these movements” to decriminalize pot, he said. “I think now that in five years half the country will be living in states that have decriminalized marijuana.”

Wider decriminalization would push the price of pot down, taking away a key revenue stream for cartels like Los Zetas and La Familia. It’s pushing them to dive deeper into illegal markets for other drugs. It’s also forcing them to adopt tactics used by militant groups in Africa, upping the ante with the Mexican government and putting them at odds with powerful energy interests.

A 2012 study by the Mexican Institute of Competitiveness says legalization in Colorado will cost cartels $1.425 billion annually, while Washington State’s legalization would cost cartels $1.372 billion. The study also found that legalization in these two states would push the cartels’ annual revenues down 20 to 30 percent, and cut revenue to the Sinaloa cartel by 50 percent.

Related: Why Legalizing Marijuana Is a Smart Fiscal Move

In two separate reports  one in 2010 and one from last September  Rand Corp. dismissed these numbers as overstated. These reports found that the biggest domino to fall would be California, a state where one-seventh of all pot in the United States is consumed.  

Reuter said he expects California to decriminalize pot in the coming years. He said the only reason a 2010 referendum to legalize marijuana failed was because it was poorly worded. 

“These two states account for 5 percent of U.S. pot consumption. It’s not a big deal. If California legalizes, that changes things,” he said.

Reuter added that the lack of pushback from conservative interest groups also makes wider decriminalization more likely. Just one group — Smart Approaches to Marijuana, headed by former Rep. Patrick Kennedy, who has struggled with substance abuse — is vocally opposed to decriminalization. Other conservative groups have been oddly quiet, Reuter said.

“One of the fascinating things is how little real criticism there’s been from the right,” he said. “Social conservatives have not made much of this.”

That could change since a new study from Northwestern University shows teenagers who smoke marijuana daily may suffer changes in brain structure that resemble schizophrenia.

Related: Study Finds Link Between Teen Pot Use and Schizophrenia

George W. Grayson, an expert on Mexican cartels at The College of William & Mary in Virginia, said, “Mexican syndicates are diversifying their sources of revenue beyond marijuana, cocaine and heroin. They are heavily involved in kidnapping — number one in the world — extortion, prostitution, migrant smuggling,” he said. “In addition, the cartels are ever-more active in stealing and exporting opioids such as Oxycontin and Roxicodone. Even cigarette smuggling is on the rise.”

Kidnapping has become so common that some have even been caught on tape. According to Mexico’s National Institute of Statistics and Geography, more than 105,000 people were kidnapped in 2012. 

Grayson also said that the cartels are stealing from energy companies, a practice more common in West Africa than Latin America. For instance, in 2012, the Mexican Army estimated that 538,000 gallons of fuel were stolen in May in Veracruz alone. 

“Los Zetas, in particular, are stealing lots of oil, gas, explosives and solvents from Pemex, the state oil company. Pemex uses the chemicals for hydraulic fracking; Los Zetas for cooking methamphetamines.” 

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