Over the course of two days in late March, a coalition of U.S. law enforcement groups rounded up more than 40 people accused of supplying the greater Seattle area with illegal weapons and drugs. It was the culmination of nearly a year of painstaking interagency investigative work that traced a smuggling route stretching from Sinaloa, Mexico, through California and Arizona, and into the Pacific Northwest. These were not local gangsters with tenuous ties to the narcos wreaking havoc south of the border. One of the men reportedly confessed to DEA agents that he came to Seattle from Mexico as a 16-year-old. “They brought me here and showed me how to sell drugs,” he said.
The bust netted an impressive haul, including 20 pounds of heroin, 30 pounds of methamphetamine, $190,000 in cash, and 31 guns, including 10 assault rifles. One illicit substance was notably absent from the evidence locker: marijuana.
The notion that legalizing marijuana will cripple Mexico’s brutal drug cartels has gained steam in recent years, and finally boiled over last month when Washington and Colorado became the first states to legalize marijuana for recreational use. Adults 21 and over in both states will be allowed to possess up to an ounce of processed pot, reversing a prohibition policy that stood for the better part of a century. It’s unclear whether the federal government will tolerate the repeal, but if legal pot remains the law of the land, it is widely assumed that Mexican drug cartels will be out several billion dollars in annual revenue.
But talk to entrepreneurs familiar with the existing marijuana industry in Washington and Colorado — and to law enforcement agents who deal with gang crime — and there is reason for skepticism. Not only have the cartels diversified their portfolios (to borrow language applied to other multinational, multibillion dollar operations); the Mexican suppliers have already been edged out of the local markets in the two new green states.
Prior to the election, the Mexican Center for Competitiveness, a respected think tank based in Mexico City, issued a report estimating that legalization in Washington alone could cut the cartels’ annual marijuana profits up to $1.37 billion by eliminating the black market for pot. Legalization proponents (and numerous media outlets, including The Atlantic) seized on the figure, trumpeting about the opportunity to hit organized crime in the pocketbook as yet another reason to end America’s disastrous war on drugs.
The campaign in Washington featured endorsements by the FBI’s former field division chief in Seattle, as well as former U.S. Attorney John McKay, a George W. Bush-appointee who had become an outspoken advocate of drug law reform. Pitching the measure, McKay often invoked beheadings in Mexico and emphasized the negative impact that legal weed might have on the vicious narcos.
“I enforced our marijuana laws,” McKay said in a campaign ad. “I’ve come to believe they don’t work. Filling our courts and jails has failed to reduce marijuana use. And drug cartels are pocketing all the profits. It’s time for a new approach.”
Both Colorado and Washington, however, have booming medical marijuana industries that aid legitimate pain patients in need of extremely potent hybrid strains and also indirectly supply an untold number of connoisseur stoners. Mexican marijuana, typically grown outdoors on large plantations, contains little more than 5 percent THC — the compound responsible for marijuana highs — compared to the 15 percent or more found on the top shelf of a U.S. dispensary. Josh Berman, cofounder of the 4Evergreen Group, an organization that bills itself as Washington’s “premier medical cannabis patient network,” says the shrink-wrapped Mexican schwag is looked upon with scorn.
“It’s such a flooded market they can’t sell that Mexican brick weed here,” Berman said. “We have more weed being grown here than anywhere else in the world, probably by three-fold. Every gangster I know is already in the soup line because of medical cannabis.”
Mexican drug traffickers are undoubtedly active in Washington and Colorado. The latest National Gang Threat Assessment published by the FBI says the Sinaloa Cartel, for instance, has ties to various Sureño factions and the Mara Salvatrucha, street gangs with an established presence in both states. The FBI writes that these groups that “traditionally served as the primary organized retail or mid-level distributor of drugs in most major U.S. cities are now purchasing drugs directly from the cartels, thereby eliminating the mid-level wholesale dealer.”
Joe Gagliardi, a gang-unit detective in Seattle’s county sheriff’s office, says product from local growhouses has largely replaced the once-coveted “BC Bud” imported from neighboring Canada. Gangs, he says, will sometimes trade Washington pot to get discounts on meth shipments that originate in Mexican labs. The detective foresees gangsters buying out weed stores’ inventory and selling it in other states, or perhaps using the black market to undercut the heavily regulated legal one, which levies a 25-percent tax at each step of the way from grower to smoker. (The duty adds an estimated $500 million to Washington state coffers every year.)
“I just don’t see the legislation of marijuana causing any problems for the criminals,” Gagliardi said. “The gangs are still going to grow marijuana and they’re still going to sell marijuana, only now it will be legal for them to walk around with an ounce supply individually packaged and not have any repercussions.”
The only way cartels will be seriously affected by the new pot laws, according to the Mexican Center for Competitiveness, is if Washington and Colorado’s legal weed spreads to parts of the country more reliant on Mexican grass. These states include the more conservative ones that are unlikely to legalize marijuana anytime soon.
The Mexican study borrows heavily from research published in 2010 by the RAND Corporation, which examined the potential fallout of California’s failed Proposition 19. Back then, the researchers used statistical analysis to debunk outlandish government claims that cartels earn 60 percent of their drug revenue from marijuana (these figures implied that Americans consume more than 30 million pounds of pot annually, enough for “almost 4.5 joints per day for every past-month user for every day of the year.”) According to RAND’s conservative estimate, Mexican mafiosos supplied roughly 40-67 percent of the marijuana used in the United States in 2009, good for about $1.5 billion in business.
Beau Kilmer, a RAND senior policy researcher and co-author of the book “Marijuana Legalization,” says he wasn’t surprised when the best-case-scenario figures from the Mexican study were taken at face value in the days following the election. “These things get picked up and people don’t focus on all the assumptions involved,” Kilmer says. “You have to assume that the federal government wouldn’t intervene. You’re assuming other states wouldn’t try to stop this, and that Colorado and Washington would just let this happen. Those are three really big assumptions.”
As Kilmer notes, the fallout from the recent legalization measures hinges on the response of federal officials. A protracted legal battle that leads to a Supreme Court ruling is within the realm of possibility, as is a certain level of tolerance similar to the stance the DEA now takes with medical marijuana. (In Seattle, DEA spokeswoman Jodie Underwood said unequivocally, “We’re going to continue to do business as usual.”) President Obama could intervene and push to end prohibition across the entire union, but that seems like the definition of a pipe dream. Obama has said he is open to a “broader debate” on the issue, but always stopped far short of endorsing legalization.
Internationally, a handful of Latin American governments, including Mexico’s, are already discussing their own drug policy changes in response to the new laws in Washington and Colorado. A spokesman for incoming Mexican president Enrique Peña Nieto told reporters recently, “I think that we have to carry out a review of our joint policies in regard to drug trafficking and security in general.”
Perhaps someday, pot-farming campesinos in the Sierra Madre will pay taxes directly to the Mexican government rather than ruthless drug lords. In the meantime, cocaine, heroin, and meth will likely remain illegal, in addition to marijuana in most states. And so long as there’s insatiable demand for those lucrative goods among consumers, narcos will continue turning bricks of Acapulco gold into American greenbacks.