The Reaction of Mexican Drug Cartels to Legalization in the United States

The legalization of marijuana in some regions of the United States, such as Washington and Colorado has not gone down well at all with Mexican drug cartels. Although some analysts believe that legalization in certain states will not have too much impact on the overall business, there are signs that these criminal organizations are changing their ‘business’ model by aiming towards the domestic market and diversifying their offer.

“The market is changing for good, however, cartels will take years and not months to adapt”, explained the Mexican security analyst Alejandro Hope. "Approximately 30% of the earnings of cartels for drug exports comes from marijuana”, added the analyst. Therefore, Mexican marijuana will gradually be replaced by legal production in the United States. 

A study from the Mexican Institute of Competitiveness already predicted two years ago that profits of drug cartels would plummet and their predictions may be coming true. "According to reports, Sinaloa operatives in the United States are buying highly potent marijuana in this country, in Colorado, and they are then smuggling it into Mexico in order to sell it to wealthy clients”, outlined Lawrence Payne, spokesperson for the United States Anti-drug Agency.

If Mexican cartels have to stay within the national market, their business will be reduced because the level of Mexican consumption is much less than in the United States. Even so, a study from the CIDE University in Mexico suggests that there were 1.2 million consumers in Mexico between 2010 and 2011. 

“Supposing that marijuana was completely legalised in the United States, the quality of American marijuana could mean that it takes the place of Mexican marijuana. It could affect between 16 to 20% of drug trafficking earnings in Mexico”, explained Javier Osorio, criminal violence professor and researcher at John Jay College in New York. 

Prices on the legal marijuana market in the United States will be another crucial factor. If the price is not too high and the wave of legalization reaches other states, cartels could be forced out of the largest marijuana market in the world.