Legalizing pot in California would hardly dent cartels’ revenue, report says


Proposition 19, which would partially legalize marijuana in California, would do little to curtail the violent Mexican organizations that smuggle it across the border, according to a new study by drug policy researchers that takes aim at one of the main arguments proponents have made for the initiative.

The report released Tuesday by Rand Corp., the nonpartisan research institute in Santa Monica, estimates that legalized marijuana could displace the Mexican marijuana sold in California, but concludes that would erase no more than 2% to 4% of the revenues the gangs receive from drug exports.

“It’s hard to imagine a scenario where Prop. 19 has a dramatic influence on their revenues. We just don’t see that happening,” said Beau Kilmer, co-director of Rand’s Drug Policy Research Center.


The researchers said the only way California’s legal pot could cut significantly into cartel revenues is if it were sold across the country. They were skeptical that would happen. “It’s very hard to imagine that the feds would sit idly by and just let California marijuana dominate the country,” Kilmer said.

Much of the analysis rests on the conclusion that drug organizations earn far less from marijuana exported to the United States than previously estimated. Researchers put that income at about $1.5 billion, while federal government reports have set it as high as $14.3 billion.

Proposition 19 would allow cities and counties to authorize the cultivation and sales of marijuana. It’s unclear how many would do that, but some cities, such as Oakland, are already poised to approve it. It’s also unclear whether the Obama administration would allow it, since marijuana is illegal under federal law. The researchers do not address those issues.

The initiative would also allow people 21 and older to possess as much as an ounce and grow up to 25 square feet of marijuana.

The initiative on the Nov. 2 ballot has triggered a serious debate south of the border, where a four-year campaign against drug gangs has left about 30,000 people dead. Last week, Mexican President Felipe Calderon stressed his opposition, saying that the U.S. has done too little to suppress consumption. But Calderon’s predecessor, Vicente Fox, supports the initiative and has called for legalization in Mexico.

Stephen Gutwillig, California director of the Drug Policy Alliance and an advocate of the initiative, said marijuana prohibition has failed because it has created a massive underground economy controlled by violent criminals. “Ending marijuana prohibition, bringing the multibillion-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,” he said. “California can’t put these cartels out of business by itself, but Prop. 19 is a crucial first step.”


President Obama’s drug czar, Gil Kerlikowske, embraced the report’s conclusion that Proposition 19 would not put the cartels out of business. “When you’re a thug and a criminal and a killer, you’re not going to get your MBA and work for a company in Mexico,” he said. Kerlikowske, a former Seattle police chief, said that with drug use increasing, more emphasis should be placed on protecting young people from illegal drugs, including marijuana.

The Rand analysis dismissed a frequently cited U.S. government estimate that marijuana sales make up about 60% of cartel export revenues. Marijuana revenues fall between 15% and 26%, according to the report.The researchers could find no documentation to support the higher estimate.

“This 60% figure is a truly mythical number, one that appeared out of nowhere and that has acquired great authority,” they wrote. “This figure should not be taken seriously.”

Kerlikowske said it was based on outdated information and said he is pressing for better data collection. “It’s pretty hard to foster support for public policy if your numbers are soft,” he said.

The report notes that U.S. government estimates of marijuana production “have long been inconsistent and sometimes implausible.” To illustrate the absurdity of one production estimate, the researchers calculated that regular users would have to smoke a joint every two hours they are awake.

As part of their study, which they acknowledge is replete with uncertainties that could alter the results, the researchers made numerous calculations such as determining the average weight of a joint: 0.46 grams.


The researchers conclude that Mexican marijuana, which is lower in quality and and contains less of the main psychoactive ingredient than California-grown pot, has a U.S. market share between 40% and 67%.

Comparing the Mexican drug gangs to the American Mafia, the researchers said that they would find other businesses to replace pot, just as the Mafia replaced bootlegging when alcohol prohibition ended. In the short term, they concluded, violence might even increase as gangs fight over smaller revenues.