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Re-hashing the Marijuana Business Theory

12 Dec

On Nov. 6, three U.S. states legalized the consumption, production, distribution and sale of marijuana for recreational purposes. Thanks to the voters of Washington, Colorado and Oregon, smoking marijuana in the United States gained ground.

Economic theory seems to be clear: produce drugs legally removed from the criminal business and thus limits their profits

Economic theory seems to be clear: produce drugs legally and removed from the criminal business and thus limits their profits

Beyond the debate of opinions and conflicting reasons and speaking purely in economic terms, the legalization of marijuana in the U.S. would affect Mexican drug traffickers.

So says Alejandro Hope, a researcher at the Mexican Institute for Competitiveness (IMCO) and author of the document “If neighbors legalized”, which claims that the legalization of marijuana in the U.S. would generate losses to Mexican cartels for billions dollars.

It happens that if Americans can start buying, cannabis legally produce and market, the market for Mexican gangs engaged in this business for decades, begin to fade.

According to the document, thanks to conditions that protect the enervating legal in several U.S. states, could increase production to meet most of its domestic demand with domestic production, in this scenario, the drug trade in Mexico would receive the biggest shock suffered structural from the massive arrival of cocaine in the late eighties.

In theory, buy marijuana without criminalizing the consumer or the chain of production and distribution would result in a substantial loss of income for Mexican criminal organizations drastically changing their business model and method of operation.

If one considers that between 40 and 70 percent of the marijuana sold in the streets of America is Mexican legalization uniquely affect the drug traffickers ‘national’.

Hope explained that the creation of a legal market for this unnerving in neighboring northern country, represent the movement of illegal exports of marijuana from Mexico.

The IMCO conducted an investigation based on specifying the cost of transporting cannabis from Mexico to 126 U.S. cities and from states that have just legalize consumption.

The results indicate that 110 people legalized marijuana is cheaper than from Mexico illegally creating a pretty daunting scenario for Mexico’s drug cartels engaged in the drug trade.

The legalization of marijuana in three U.S. states for recreational purposes would represent a significant loss for producers and Mexican cartels as it is estimated that illegal groups in Mexico, leaving would receive between 300 and 800 thousand thousand million annually by state .

In Washington legalization could mean a drop of about one thousand 300 million dollars in export revenues of Mexican drug cartels, in Colorado will lose a thousand and $ 400 million in Oregon, the decline would be even stronger with a fall one thousand 800 million dollars.

As a result of this new scenario, it is expected also to have a strong impact on this herb producing areas, but mainly in the “Golden Triangle” (Sinaloa, Durango and Chihuahua) strategic area where marijuana production is more export oriented.

A week after the controversial vote, Mexico and three Central American countries, called on the OAS to discuss the implications and the impact they will have on the region the recent cases of legalization of the herb.

The reactions of the recent study published by the Mexican Institute of Competitiveness, caused various reactions in the United States. Thomas J. Gorman, Head of the High Intensity Drug Trafficking of Rocky Mountain, said that Mexican cartels would simply take their produce to the north.

“If I were a member of a cartel and knew that the states of Colorado and Washington legalized, get a couple of strawmen and do my business in those states. Why not? “Asked Gorman.

Meanwhile Betty Aldworth, legal director of the “Campaign to regulate marijuana like alcohol,” in Colorado, was cautious about the conclusions of the study.

Aldworth said that somehow, IMCO research supports what your group has said in the sense that if it regulates and controls the marijuana market, would end the flow of profits to the Mexican cartels.

Meanwhile, Felipe Calderón, President of Mexico, added that these processes are legalizing marijuana “a paradigm shift on the part of nations with respect to the current international system.”

The truth is that with the legalization of the production, consumption, trade and distribution of marijuana will force the Mexican cartels to change their modus operandi and criminal redirect their efforts to recover the decline will mean this controversial measure.

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