Reducing Drug Trafficking Revenues and Violence in Mexico

Would Legalizing Marijuana in California Help?

by Beau Kilmer, Jonathan P. Caulkins, Brittany M. Bond, Peter H. Reuter

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Abstract

U.S. demand for illicit drugs creates markets for Mexican drug trafficking organizations (DTOs) and helps foster violence in Mexico. This paper examines how marijuana legalization in California might influence DTO revenues and the violence in Mexico. Key findings include: 1) Mexican DTOs' gross revenues from illegally exporting marijuana to wholesalers in the United States is likely less than $2 billion; 2) The claim that 60 percent of Mexican DTO gross drug export revenues come from marijuana should not be taken seriously; 3) If legalization only affects revenues from supplying marijuana to California, DTO drug export revenue losses would be very small, perhaps 2–4 percent; 4) The only way legalizing marijuana in California would significantly influence DTO revenues and the related violence is if California-produced marijuana is smuggled to other states at prices that outcompete current Mexican supplies. The extent of such smuggling will depend on a number of factors, including the response of the U.S. federal government. 5) If marijuana is smuggled from California to other states, it could undercut sales of Mexican marijuana in much of the U.S., cutting DTOs' marijuana export revenues by more than 65 percent and probably by 85 percent or more. In this scenario, the DTOs would lose approximately 20% of their total drug export revenues.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Methods for Estimating Drug-Trafficking Organizations' Drug Revenues

  • Chapter Three

    U.S. Marijuana Consumption and Associated Drug-Trafficking Organization Export Revenues

  • Chapter Four

    How Might Legalization in California Affect Mexican Drug-Trafficking Organizations' Marijuana Export Revenues?

  • Chapter Five

    Beyond Marijuana Exports: Insights About Additional Sources of Mexican Drug- Trafficking Organizations' Drug Revenue

  • Chapter Six

    How Could a Reduction in Marijuana Revenues Influence Mexican Drug-Trafficking Organizations?

  • Chapter Seven

    Conclusion

Funding for this study was provided by RAND International Programs through RAND's Investment in People and Ideas program, which combines philanthropic contributions from individuals, foundations, and private-sector firms with earnings from RAND's endowment and operations to support research on issues that reach beyond the scope of traditional client sponsorship.

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