Legalizing US pot costly to Mexican cartels

A study released Wednesday by a respected Mexican think tank contends that proposals to legalize the recreational use of marijuana in Colorado, Oregon and Washington could cut Mexican drug cartels’ earnings from traffic to the U.S. by as much as 30 percent. Opponents questioned some of the study’s assumptions, saying the proposals could also offer new opportunities for cartels to operate inside the U.S.

The ballot measures to be decided on Tuesday would allow adults to possess small amounts of pot under a regimen of state regulation and taxation. Polls have shown tight races in Washington and Colorado, with Washington’s measure appearing to have the best chance of passing. Oregon’s measure does not appear likely to pass.

The study by the Mexican Competitiveness Institute, “If Our Neighbors Legalize,” assumes that legalization in any state would allow growers there to produce marijuana relatively cheaply and create an illicit flow to other states, where the drug could be made available at cheaper prices and higher quality than smuggled Mexican marijuana. The report, based on previous studies by U.S. experts including those at the Rand Corp., assumes that Mexican cartels earn more than $6 billion a year from drug smuggling to the U.S.

It calculates the hypothetical, post-legalization price of marijuana produced in Oregon, Washington and Colorado and sold within those states and smuggled to other states. It then assumes that purchasers around the U.S. will prefer cheaper domestic marijuana. That choice will lead to a loss of $1.425 billion to the cartels if Colorado legalizes, $1.372 billion if Washington approves the ballot measure and $1.839 billion if Oregon votes yes, the study says.

It only looks at the effects of legalization in individual states. Opponents of the ballot measures said the study bolsters one of their principal objections, that it will turn any state with legal marijuana into a producer for the rest of the country. They said, however, that they did not believe that production will rob the cartels of significant profits, saying instead that they thought Mexican drug lords would try to participate in legal production in the U.S.

“If I were a cartel member and I knew Colorado and Washington had it legal, I’d get a couple front people and do my business out of those states. Why would I not?” said Thomas J. Gorman, head of the Rocky Mountain High-Intensity Drug Trafficking Area, a government agency that coordinates anti-drug efforts by local, state and federal agencies in four Western states.

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