How Marijuana Legalization Is Destroying Mexican Drug Cartel Business

[Chef Ramsay]

Submitted by Tyler Durden on 05/16/2014 19:26 -0400

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

Nothing is more amusing (and sad) than when I see some ignorant out of stater commenting about how nightmarish the legalization of marijuana has been for Colorado. The most high-profile and hilarious example of this came from disgraced New Jersey Governor Chris Christie, who I have criticized sharply on several occasions, here, here and here. He foolishly spouted some hysterical nonsense last month when he said:
“See if you want to live in a major city in Colorado, where there’s head shops popping up on every corner and people flying into your airport just to come and get high. To me, it’s just not the quality of life we want to have here in the state of New Jersey and there’s no tax revenue that’s worth that.”
Honestly, what planet does this clown live on? As someone who actually lives in Colorado, I can tell you that the only thing that has changed since legalization is that there is a greater sense of freedom and people are no longer getting arrested in droves for non-violent drug possession charges. Let’s not forget that the police arrest someone every two seconds in America, many of which are for mere drug possession charges. Apparently, Christie thinks this is a good thing and ultimately results in this mythical wonderful “quality of life” that apparently exists in some corner of New Jersey where rainbow farting unicorns roam the countryside.

In 2012, a study by the Mexican Competitiveness Institute found that US state legalization would cut into cartel business and take over about 30 percent of their market.

Given the DEA’s historic relationship with the Sinaloa cartel, and the agency’s fury over legalized marijuana, it almost seems like the DEA wants to crush the legal weed market in order to protect the interests of their cartel friends. Almost.
Not almost, that is exactly what they want to do.
"The DEA doesn’t want the drug war to end,” said Nelson, when asked about a possible connection between the agency’s hatred of legal pot and its buddies in Sinaloa. “If it ends, they don’t get their toys and their budgets. Once it ends, they aren’t going to have the kind of influence in foreign government. I’m not a conspiracy theorist, but where there’s smoke there’s probably fire.”

The Sinaloa cartel came to prominence in January when the “Fast and Furious” scandal surfaced, in which it was revealed that DEA agents ignored Sinaloa drug shipments and essentially granted immunity to cartel criminals in exchange for information.

Another way the DEA tries to shut down legal marijuana dispensaries, and medical marijuana clinics, is through the banks. While large banks like HSBC and Wachovia have gotten away with laundering billions in cartel drug money, famously referred to as “too big to jail” by Attorney General Eric Holder, banks have been meticulously instructed by the DEA not to work with any kind of marijuana facility.

That’s pennies compared to what the US spends on the drug war. According to the Drug Policy Alliance, we spend $51 billion per year fighting illegal drugs. A 2010 study by Harvard economist Jeffrey Miron found that not only would the US save tremendous amounts of money were it to end drug prohibition, legalizing could bring in an additional $46.7 billion in yearly tax revenue.

“We’ve spent 1.3 trillion since 1972 on the drug war. What have we gotten for that? Drugs are cheaper and easier to get than ever before,” Nelson told VICE News.

More info about state legalization and related benefits at http://www.zerohedge.com/news/2014-05-16/how-marijuana-legalization-america-destroying-mexican-drug-cartel-business

[Hazir]

One thing people need to understand about current state of drug business. Drug cartels WANT to keep status quo, they don't want to legalize ANY form of narcotics. It will be very bad for their income if the drugs were legally available.

If drugs were legal gangsters wouldn't be earning much. Now they can actually PAY the government to NOT legalize drugs. I would like every form of drugs legalised. It would kill every drug cartel. And if people will be  dumb enough to use drugs, well, its their choice. After all: Volenti non fit iniuria.

[Unluckyduck]

Wasn't it published somewhere that narcotics aren't even their primary source of income these days?

[Hazir]

Wasn't it published somewhere that narcotics aren't even their primary source of income these days?

If not narcotics are their best deal I bet financial services are. It is better to borrow from mafia than from banks nowadays.

[bryant.coleman]

I don't understand. The Mexican drug cartels mostly deal with cocaine (which is actually trafficked from the South American nations such as Bolivia and Colombia). Cannabis accounts for only a small part of their business.

[Elwar]

More jobs lost?!?





thanks Obama

[snarlpill]

I don't understand. The Mexican drug cartels mostly deal with cocaine (which is actually trafficked from the South American nations such as Bolivia and Colombia). Cannabis accounts for only a small part of their business.

It is more than you think.
Marijuana will only be nationally legal when they make more money from taxing and regulating it than they do prohibiting it. Yes, of course there is tons of money to be made off of taxes, but drug prohibition funds many of the alphabet soup agencies, along with cash/property/drugs taken in seizures, money made from private prisons/prison labor, community corrections/probation fees, etc.

[bryant.coleman]

drug prohibition funds many of the alphabet soup agencies, along with cash/property/drugs taken in seizures, money made from private prisons/prison labor, community corrections/probation fees, etc.

That is true. Right now in the United States, there are more than 330,000 people imprisoned for various drug offenses. Just imagine the huge expenses needed to take care of this population.

[hilariousandco]

You could put the cartels out of business overnight by legalising drugs, this just shows it. I'm sure their cannabis export business will quickly dwindle to next to nothing over the years, but most weed is homegrown now anyway.

[bryant.coleman]

At least the Marijuana legalization will protect the National Parks and the National Forests of the US from Mexican drug cartels.

Nation’s forests are severely damaged by marijuana grow sites

http://www.fs.fed.us/news/2011/releases/12/marijuana.shtml

[Chef Ramsay]

In related news and I didn't think it needed its own post:
Uruguay to sell marijuana tax-free to undercut drug traffickers

Uruguay will exempt marijuana production and sales from taxes in a bid to ensure prices remain low enough to undercut competition from black market pot smuggled in from Paraguay, according to consultants advising the government on a legalization plan.

Congress approved a law allowing the cultivation and sale of marijuana in December, making Uruguay the first country to do so, with the aim of wresting the business from criminals.

"The principal objective is not tax collection. Everything has to be geared toward undercutting the black market," said Felix Abadi, a contractor who is developing Uruguay's marijuana tax structure. "So we have to make sure the price is low."

More @ http://www.reuters.com/article/2014/05/19/us-uruguay-marijuana-idUSBREA4I0CJ20140519
Obviously and as evidenced by the article, these legalization/decrim movements need to keep their prices low or otherwise black market forces can still participate in the heavily taxed markets.

[hilariousandco]

In related news and I didn't think it needed its own post:
Uruguay to sell marijuana tax-free to undercut drug traffickers

Uruguay will exempt marijuana production and sales from taxes in a bid to ensure prices remain low enough to undercut competition from black market pot smuggled in from Paraguay, according to consultants advising the government on a legalization plan.

Congress approved a law allowing the cultivation and sale of marijuana in December, making Uruguay the first country to do so, with the aim of wresting the business from criminals.

"The principal objective is not tax collection. Everything has to be geared toward undercutting the black market," said Felix Abadi, a contractor who is developing Uruguay's marijuana tax structure. "So we have to make sure the price is low."

More @ http://www.reuters.com/article/2014/05/19/us-uruguay-marijuana-idUSBREA4I0CJ20140519
Obviously and as evidenced by the article, these legalization/decrim movements need to keep their prices low or otherwise black market forces can still participate in the heavily taxed markets.

José Mujica is a legend, but I don't see why they'd even need to sell it tax free. Most of the value of Cannabis comes from the importation/smuggling costs, so they could tax it and still undercut the Cartels whilst almost certainly being better quality.

[Ekaros]

At least they will still have meth available...

[beetcoin]

You could put the cartels out of business overnight by legalising drugs, this just shows it. I'm sure their cannabis export business will quickly dwindle to next to nothing over the years, but most weed is homegrown now anyway.

well, there would be a problem in that it would be privatized, kind of like what's going on with weed. it'd be a good thing if most of the businesses that existed were privately owned.. but i'm thinking that over time, it's going to go by way of beer... a few guys will emerge and become so big that there will only be a few players in the market.

[bryant.coleman]

At least they will still have meth available...

Mexican cartels don't deal with Meth. It is a complicated process to prepare Methamphetamine from Muriatic acid, Ethyl Ether, Lye and Ephedrine. If something goes wrong, then explosions can occur. So, the meth business is mostly done by the non-Hispanic white gangs, such as the Public Enemy No. 1 and the Nazi Lowriders

[Chef Ramsay]

At least they will still have meth available...

Mexican cartels don't deal with Meth. It is a complicated process to prepare Methamphetamine from Muriatic acid, Ethyl Ether, Lye and Ephedrine. If something goes wrong, then explosions can occur.

In case anyone was interested in the basics of Meth preparation, Mr. Wizard just spelled it out for ya.

[bryant.coleman]

In case anyone was interested in the basics of Meth preparation, Mr. Wizard just spelled it out for ya.

No one can prepare Methamphetamine based on the online recipes (readily available from the internet, just do a Google search), without causing explosions and major fires.

[hilariousandco]

You could put the cartels out of business overnight by legalising drugs, this just shows it. I'm sure their cannabis export business will quickly dwindle to next to nothing over the years, but most weed is homegrown now anyway.

well, there would be a problem in that it would be privatized, kind of like what's going on with weed. it'd be a good thing if most of the businesses that existed were privately owned.. but i'm thinking that over time, it's going to go by way of beer... a few guys will emerge and become so big that there will only be a few players in the market.

Well that's just what happens with capitalism. People should just stick to small independent growers then. Everybody has a free choice.

At least they will still have meth available...

Mexican cartels don't deal with Meth. It is a complicated process to prepare Methamphetamine from Muriatic acid, Ethyl Ether, Lye and Ephedrine. If something goes wrong, then explosions can occur. So, the meth business is mostly done by the non-Hispanic white gangs, such as the Public Enemy No. 1 and the Nazi Lowriders

I don't get what you're saying here. Are you saying meth is too dangerous/complicated for Mexican cartels to deal with and they're scared of explosions?