FOR a growing number of American policy makers, politicians and activists, the best answer to the spiraling violence in Mexico is to legalize the marijuana that, they argue, fuels the country’s vicious cartels and smugglers. After all, according to official estimates, marijuana constitutes 60 percent of cartels’ drug profits. Legalization would move that trade into the open market, driving down the price and undermining the cartels’ power and influence.
Unfortunately, it’s not that easy. Marijuana legalization has many merits, but it would do little to hinder the long-term economics of the cartels — and the violent toll they take on Mexican society.
For one thing, if marijuana makes up 60 percent of the cartels’ profits, that still leaves another 40 percent, which includes the sale of methamphetamine, cocaine, and brown-powder and black-tar heroin. If marijuana were legalized, the cartels would still make huge profits from the sale of these other drugs.
Plus, there’s no reason the cartels couldn’t enter the legal market for the sale of marijuana, as organized crime groups did in the United States after the repeal of Prohibition.
Still, legalization would deliver a significant short-term hit to the cartels — if drug trafficking were the only activity they were engaged in. But cartels derive a growing slice of their income from other illegal activities. Some experts on organized crime in Latin America, like Edgardo Buscaglia, say that cartels earn just half their income from drugs.
Indeed, in recent years cartels have used an extensive portfolio of rackets and scams to diversify their income. For example, they used to kidnap rivals, informants and incompetent subordinates to punish, exact revenge or send a message. Now that they have seen that people are willing to pay heavy ransoms, kidnapping has become their second-most-lucrative venture, with the targets ranging from businessmen to migrants.
Another new source of cartel revenue is oil theft, long a problem for the Mexican government. The national oil company, Pemex, loses hundreds of millions of dollars’ worth of petroleum every year to bandits and criminal gangs who tap into pipelines and siphon it off. Now the cartels are getting involved in this business, working with associates north of the border to sell the oil to American companies at huge markups.
In 2009 a federal court convicted an American businessman of helping to funnel $2 million in petroleum products stolen from Pemex by a Mexican cartel, eventually selling it to a Texas chemical plant owned by the German chemical company BASF. The chemical company claims never to have known where the products came from.
Cartels are also moving into the market in pirated goods in Latin America. The market used to be dominated by terrorist groups like Hezbollah and Hamas, who operated in the triborder area of Argentina, Brazil and Paraguay. Now the field is being overtaken by Mexican cartels, which already have so much control over the sale of pirated CDs, DVDs and software that many legitimate companies no longer even bother to distribute their full-price products in parts of Mexico.
Taking another page from traditional organized crime, cartels are also moving into extortion. A cartel representative will approach the owner of a business — whether a pharmacy or a taco stand — demanding a monthly stipend for “protection.” If those payments aren’t made on time, the business is often burned to the ground, or the owner is threatened, kidnapped or killed.
A popular cartel racket involves branded products. For example, a cartel member — most often from Los Zetas and La Familia Michoacana, two of the largest and most diversified cartels — will tell a music-store owner that he has to sell CDs with the Zetas logo stamped on them, with the cartel taking a 25 percent cut of the profits. Noncompliance isn’t an option.
With so many lines of business, it’s unlikely that Mexican cartels would close up shop in the event of legalization, even if it meant a serious drop in profits from their most successful product. Cartels are economic entities, and like any legitimate company the best are able to adapt in the face of a changing market.
This is not to say that drug legalization shouldn’t be considered for other reasons. We need to stop viewing casual users as criminals, and we need to treat addicts as people with health and emotional problems. Doing so would free up a significant amount of jail space, court time and law enforcement resources. What it won’t do, though, is stop the violence in Mexico.
Sylvia Longmire, a former officer and investigative special agent in the Air Force, is the author of the forthcoming book “Cartel: The Coming Invasion of Mexico’s Drug Wars.”
Unfortunately, it’s not that easy. Marijuana legalization has many merits, but it would do little to hinder the long-term economics of the cartels — and the violent toll they take on Mexican society.
For one thing, if marijuana makes up 60 percent of the cartels’ profits, that still leaves another 40 percent, which includes the sale of methamphetamine, cocaine, and brown-powder and black-tar heroin. If marijuana were legalized, the cartels would still make huge profits from the sale of these other drugs.
Plus, there’s no reason the cartels couldn’t enter the legal market for the sale of marijuana, as organized crime groups did in the United States after the repeal of Prohibition.
Still, legalization would deliver a significant short-term hit to the cartels — if drug trafficking were the only activity they were engaged in. But cartels derive a growing slice of their income from other illegal activities. Some experts on organized crime in Latin America, like Edgardo Buscaglia, say that cartels earn just half their income from drugs.
Indeed, in recent years cartels have used an extensive portfolio of rackets and scams to diversify their income. For example, they used to kidnap rivals, informants and incompetent subordinates to punish, exact revenge or send a message. Now that they have seen that people are willing to pay heavy ransoms, kidnapping has become their second-most-lucrative venture, with the targets ranging from businessmen to migrants.
Another new source of cartel revenue is oil theft, long a problem for the Mexican government. The national oil company, Pemex, loses hundreds of millions of dollars’ worth of petroleum every year to bandits and criminal gangs who tap into pipelines and siphon it off. Now the cartels are getting involved in this business, working with associates north of the border to sell the oil to American companies at huge markups.
In 2009 a federal court convicted an American businessman of helping to funnel $2 million in petroleum products stolen from Pemex by a Mexican cartel, eventually selling it to a Texas chemical plant owned by the German chemical company BASF. The chemical company claims never to have known where the products came from.
Cartels are also moving into the market in pirated goods in Latin America. The market used to be dominated by terrorist groups like Hezbollah and Hamas, who operated in the triborder area of Argentina, Brazil and Paraguay. Now the field is being overtaken by Mexican cartels, which already have so much control over the sale of pirated CDs, DVDs and software that many legitimate companies no longer even bother to distribute their full-price products in parts of Mexico.
Taking another page from traditional organized crime, cartels are also moving into extortion. A cartel representative will approach the owner of a business — whether a pharmacy or a taco stand — demanding a monthly stipend for “protection.” If those payments aren’t made on time, the business is often burned to the ground, or the owner is threatened, kidnapped or killed.
A popular cartel racket involves branded products. For example, a cartel member — most often from Los Zetas and La Familia Michoacana, two of the largest and most diversified cartels — will tell a music-store owner that he has to sell CDs with the Zetas logo stamped on them, with the cartel taking a 25 percent cut of the profits. Noncompliance isn’t an option.
With so many lines of business, it’s unlikely that Mexican cartels would close up shop in the event of legalization, even if it meant a serious drop in profits from their most successful product. Cartels are economic entities, and like any legitimate company the best are able to adapt in the face of a changing market.
This is not to say that drug legalization shouldn’t be considered for other reasons. We need to stop viewing casual users as criminals, and we need to treat addicts as people with health and emotional problems. Doing so would free up a significant amount of jail space, court time and law enforcement resources. What it won’t do, though, is stop the violence in Mexico.
Sylvia Longmire, a former officer and investigative special agent in the Air Force, is the author of the forthcoming book “Cartel: The Coming Invasion of Mexico’s Drug Wars.”
