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Study: Prop. 19 might not hurt cartels much

By Josh Richman
Tuesday, October 12th, 2010 at 11:55 am in 2010 election, ballot measures, marijuana.

Violent Mexican drug trafficking organizations will lose a lot of money if California voters legalize marijuana next month only if the Golden State’s legal marijuana is smuggled illegally into other states, according to a new study by a public-policy think tank.

The study – co-authored by RAND Drug Policy Research Center co-director Beau Kilmer along with professors at Carnegie Mellon University and the University of Maryland – finds that Mexican cartels’ gross revenues from illegally smuggling marijuana to U.S. wholesalers probably is less than $2 billion, and the claim that 60 percent of these cartels’ gross drug export revenues come from marijuana shouldn’t be taken seriously.

If legalization only affects revenues from supplying marijuana to California, the cartels’ drug-export revenue losses would be very small, perhaps only 2 to 4 percent, the study found. The only way legalizing marijuana in California would significantly influence the cartels’ revenues – and the related violence now plaguing Mexico – is if California-produced marijuana is smuggled to other states at prices that undercut Mexican supplies.

That interstate smuggling will depend on several factors, including the U.S. federal government’s response, the study notes. But if marijuana is smuggled from California to other states, it could significantly undercut sales of Mexican marijuana in much of the U.S., cutting the Mexican cartels’ marijuana export revenues by more than 65 percent and probably by 85 percent or more. In this scenario, the cartels would lose about 20 percent of their total drug-smuggling revenues.

Jonathan Caulkins, professor of operations research and public policy at Carnegie Mellon University and a co-author of the study, told reporters on a conference call this morning that the study’s authors can’t estimate whether California will become the rest of the nation’s main marijuana source, significantly undercutting the Mexican cartels. The study worked scenarios with and without such a development, he said, and “we’re not pretending we can anticipate which one will occur.”

But “we’ve known for a while you can’t solve the U.S. drug problems in Mexico, and I think we know you can’t solve Mexican drug violence in the United States,” Caulkins said.

Supporters of Proposition 19, the marijuana-legalization measure on next month’s ballot, immediately responded to the RAND study, noting prohibition has fueled the illegal drug-smuggling economy.

“The bottom line is that creating any lawful, legitimate market for sales of marijuana to adults isn’t good for the criminal syndicates that currently control this gigantic underground economy,” said Stephen Gutwillig, California director for the Drug Policy Alliance. “Whether their share is $2 billion or some other number, Prop. 19 is bad for their bottom line and a direct challenge to the monopoly they currently enjoy over their most lucrative product.”

“Creating an exit strategy from the disastrous war on marijuana has to start somewhere,” Gutwillig continued. “Ending marijuana prohibition, bringing the multi-billion dollar marijuana market into the light of day and under the rule of law, will deal a major blow to criminal syndicates on both sides of the border. California can’t put these cartels out of business by itself, but Prop. 19 is a crucial first step.”

Meanwhile, the campaign for Prop. 19 is hosting a telephone town hall at 7 p.m. tonight to rally supporters (who received e-mail invitations last week) and reach out to undecided voters (who’ll get an automated phone call this evening). Speaking on the call will be recently retired Orange County Superior Court Judge Jim Gray, Prop. 19 proponent Richard Lee and Yes On 19 spokeswoman Dale Jones; invited voters will be able to pose questions to the panelists.

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