While recreational pot markets are bracing for a potential crackdown stemming from orders by Attorney General Jeff Sessions, former law enforcement officials say another group is likely celebrating: Mexican drug cartels.
“They are, right now, mapping out a plan to fill this hole,” said Arthur Rizer, a former Justice Department narcotics prosecutor. “There are meetings going on. They are watching the same TV panels we’re watching and taking notes on what other Republicans are saying.”
Marijuana sales made up at least half the cartels’ drug revenue a few years ago, according to some law enforcement officials; some studies put it closer to a quarter. In any case, pot provided a significant amount of cash for the organizations. But the amount sold into the United States has decreased since states started legalizing marijuana. A crackdown north of the border would likely put more money in the hands of the cartels — which would bring more instability to Mexico.
“Violence costs money,” said Terry Blevins, who worked in intelligence gathering and security throughout Latin America and subsequently with an anti-terrorism task force with the Department of Defense. “You have to pay off government officials, you have to hire people to kill off those who don’t follow orders, and you have to pay off law enforcement to ignore it.” And there’s more motivation to fight when there are significant profits to fight over, he added.
Sessions announced last week that he was rescinding an Obama-era policy that allowed states to legalize marijuana despite a federal ban; instead, enforcement of the prohibition will be up to the discretion of individual U.S. attorneys, the attorney general said.
Due to other factors – a major one being the leadership vacuum and subsequent power struggle created by the arrest and extradition of former drug boss Joaquin “El Chapo” Guzman – recent years have been among Mexico’s bloodiest. Through November, the Mexican government recorded 26,573 homicides in 2017, the most in a single year since initial tracking began in 1997. The number of deaths fell in 2013 and 2014, but started rising in 2015.
Colorado and Washington became the first states to legalize recreational cannabis in the U.S. in 2012. And while it’s difficult to pin exact numbers on cartel activity and revenue, border seizures provide some imperfect insights. Since 2011, the amount of marijuana seized crossing into the United States from Mexico has decreased by 66 percent – from 2.53 million pounds in 2011 to about 861,000 pounds in 2017. The same reports suggest the cartels have shifted to producing more heroin and methamphetamines.
Rizer and Blevins are concerned that number will creep back upwards, and could be worse than before.
Rizer, who’s now with a libertarian think tank called the R Street Institute, said the cartels will profit from the fact that many people in Washington state, Colorado and elsewhere first started using marijuana when it became legal in their states.
“They’re not going to stop now because Sessions says it’s bad,” Rizer said. “You have a lot of people like that in the U.S., so not only would cartels be able to tap back into their former market, but they’d absolutely have a bigger market.”
“It’s no different than what Coca-Cola would be doing if an ingredient in Pepsi was banned,” Rizer continued. “These are efficient business people. They’re going to look at how they can capitalize on this.”
The market was already sizable, and a recent arrest suggests marijuana is still a major part of cartel business. A cell leader of a major Mexican cartel, Damaso Lopez-Serrano, pleaded guilty in federal court Wednesday to distributing controlled substances after surrendering to authorities last July. The case against Lopez-Serrano began in late 2011, according to DOJ, and resulted in the collection of more than 34,000 pounds of marijuana, about 3,000 pounds of meth, about 5,000 pounds of cocaine and about 200 pounds of heroin.
The public affairs office for the Mexican embassy in the U.S. declined comment for this story.
About $40.6 billion was spent on marijuana in the U.S. in 2010, before any states legalized recreational marijuana, according to the nonpartisan RAND Drug Policy Research Center. More recent figures are not available, according to co-director Beau Kilmer, though a report on the White House’s National Drug Control Strategy in 2016 said 10.2 percent of the U.S. population, more than 32 million people, have used marijuana.
But Kilmer cautioned that cartels are not the only ones who can fill any potential market holes. He pointed to illicit sales within the U.S. and loosely regulated medical marijuana markets as more likely substitutes, should Sessions successfully cut down the recreational market.
“There’s a lot of production in the U.S. outside of recreational markets,” Kilmer said. “And there’s research now that shows high potency product is more in demand in the U.S., and pot from Mexico tends to be a lower potency.”
Sessions is unlikely to bother medical marijuana markets for now due to a budget amendment originally passed in 2014 that prevents the Justice Department from using federal funds to target medical markets. But the amendment, included in Congress’ stopgap spending bill passed in December, could vanish when the spending bill expires on Jan. 19. Sessions has called for repealing it, saying the matter should be left to DOJ.
Recreational marijuana use is legal in eight states plus the District of Columbia; medical marijuana is legal in 29 states plus the District of Columbia.
Kilmer also argued in research in 2010 that the cartels’ dependency on marijuana sales was overblown, saying cannabis sales likely only amounted to between 15 and 26 percent of cartels’ drug revenue, not counting revenue from other illicit activities. The revenue decline cartels faced with increasing marijuana legalization in the U.S., Kilmer wrote at the time, would be “significant but not overwhelming, on the order of 13-23 percent.”
Both Rizer and Blevins said marijuana comprised at least 50 percent of cartels’ total revenue as recently as 2013, citing intelligence received from Mexican law enforcement.
“Black market actors have always been afraid of legalization, and the California market would have been huge,” said Blevins, who grew up in Mexico and is now affiliated with the Law Enforcement Action Partnership, a group that opposes drug prohibition. “But even if those existing markets continue, local and state regulators are looking at what the federal government is doing and they may refrain now.”
Kate Irby: 202-383-6071, @kateirby