Study: Drug cartels would feel small pinch if California legalizes marijuana

If Proposition 19 passes and California legalizes marijuana, the financial hit to Mexican drug cartels would be a loss of 2 to 4 percent of their overall US revenues, says a RAND Corp. study.

By , Staff writer

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    Marijuana is harvested in Davenport, Calif., in this Oct. 12 photo. Mexico's drug cartels are likely to lose customers if California legalizes marijuana, as called for by Proposition 19, according to a study released this week.
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If marijuana use were to become mostly legal in California, as called for by Proposition 19, will the drug cartels in Mexico take a big hit?

The argument that Prop. 19 would, in effect, "stick it to the cartels" has been one of the most potent of those who support the ballot initiative. An independent study released this week, however, offers a more nuanced view of that claim: If Prop. 19 were to pass, the California marijuana industry would indeed supplant the Mexican product, but the total financial hit to Mexican drug cartels in the whole US market would be small – about 2 to 4 percent.

The study, by the RAND Corp., comes less than three weeks before Californians go to the polls to decide the fate of Proposition 19.

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“We believe that legalizing marijuana in California would effectively eliminate Mexican DTOs’ [drug trafficking organizations] revenues from supplying Mexican-grown marijuana to the California market. … [E]ven with taxes, legally produced marijuana would likely cost no more than would illegal marijuana from Mexico," states the RAND report. "Thus, the needs of the California market would be supplied by the new legal industry.”

But that's not the whole story. “Our report shows that legalizing marijuana in California will not dramatically reduce the drug revenues collected by DTOs from sales to the United States, not just in California,” says Rand spokesman Warren Robak. Because California accounts for about 14 percent of overall US marijuana use, “it would have a small effect on [cartel] drug trafficking operations – cutting total drug export revenues by perhaps 2-4 percent,” says the summary of the report.

Will the findings affect how Californians vote on the measure?

"It will have a small impact, since most voters have already made up their minds and many have already voted" via absentee ballots, says Robert Stern, president of the Center for Governmental Studies. “For those few who have not made up their minds, it will have some negative effect if they hear about it. So far, I have not seen any ads for or against the measure. Meg Whitman [candidate for governor] is buying up all the time, so it is hard to get paid messages aired in between her ads.”

That may be small consolation to Prop. 19 supporters. They took issue with the Los Angeles Times coverage of the RAND report, saying it misstated the findings and gives people the wrong impression.

The story, published Wednesday, states: “A new study concludes that Proposition 19, which would partially legalize marijuana in California, would do almost nothing to curtail violent Mexican drug organizations that ship the drug across the border, a finding that undermines one of the main arguments proponents have made.”

“Journalists need to read the study, not just the press release,” says Paul Armentano of the National Organization for Reform of Marijuana Laws (NORML).

“Contrary to what’s been reported, these findings actually support our claims,” says Tom Angell, spokesman for Yes on 19.

The Times' John Hoeffel, who wrote the story, says his article emphasized the larger US picture. “RAND is saying that despite the huge impact on California, the impact nationally – until such time as other states follow California – is negligible.”

The Rand report also looks askance at US government estimates that marijuana sales make up 60 percent of drug cartels' revenues. The estimate was published by the United States drug czar in 2006, but Rand researchers say they could find no supporting documentation.

“This 60 percent figure is a truly mythical number, one that appeared out of nowhere and that has acquired great authority,” the Rand study states. “This figure should not be taken seriously.”

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