Legalizing Pot Would Cut Mexican Cartel Revenues Only Slightly, Could Boost Violence, Study Finds | The Informer | Los Angeles | Los Angeles News and Events | LA Weekly
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Legalizing Pot Would Cut Mexican Cartel Revenues Only Slightly, Could Boost Violence, Study Finds

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Tue, Oct 12, 2010 at 11:00 AM

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Legalizing marijuana in California would cause only a modest drop in revenues for Mexican drug cartels, according to a Rand Corporation study released today.

Proposition 19 could also lead to a short-term increase in Mexican drug violence, as warring cartels fight over a diminished market, the report concludes.

The study addresses one of the main arguments from supporters of Prop. 19, which is that legalizing marijuana in California would dramatically cut into cartels' profits, and thereby cause a sharp drop in Mexican drug violence.

Proponents often cite a U.S. government estimate that marijuana exports account for 60% of Mexican cartels' revenues. If California voters legalize marijuana, those exports would be unable to compete with cheaper, higher-quality marijuana grown and distributed legally in California.

The Rand study does not dispute that Mexican cartels would be forced out of the California market if Prop. 19 passes. But it argues that the overall impact on cartels' revenues would be much smaller than supporters contend. The study argues that the 60% figure is grossly inflated. The actual share of cartel revenues from marijuana exports is something like 15-26 percent, the study argues. The rest comes from cocaine, methamphetamine and heroin.

Like any good Rand study, this ones gives very precise numbers and then piles on a heap of caveats. In this case, one of the major unknowns is how the federal government will react if Prop. 19 passes. If the the feds take a relatively passive approach to interstate smuggling, California-grown marijuana could dominate the U.S. market. Under that scenario, the impact on Mexican cartels' profits would be on the order of 13-23 percent. That would be a major drop in revenues -- though not nearly as large as Prop. 19 supporters have argued.

That, however, could lead to an increase in Mexican drug violence as cartels battle over a smaller market -- at least in the short term. In the long run,

it's possible that violence could subside as drug trafficking becomes

less profitable.

But if the U.S. government takes a more aggressive approach to interstate trafficking, then California-grown pot might be limited to the California market. In that case, Mexican smugglers would see their revenues drop by a mere 2-4 percent. That would be almost negligible in the context of other factors that affect cartel operations.

Stephen Gutwillig, California director of the Drug Policy Alliance, argued that the Rand study "misses the mark." The Drug Policy Alliance supports Prop, 19, and argued that whatever the true figures are, any step toward legalization will cut into cartel profits.

"Prop. 19 is bad for their bottom line and a direct challenge to the monopoly they currently enjoy over their most lucrative product," Gutwillig said. "California can't put these cartels out of business by itself, but Prop. 19 is a crucial first step."

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