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Press Release
Legalizing marijuana in California would not substantially cut cartel revenues, study finds
Wednesday, October 13, 2010


(Photo: Gerhard Taatgen jr./STOCK.XCHNG)
Legalizing marijuana in California will not dramatically reduce the drug revenues collected by Mexican drug trafficking organizations from sales to the United States, according to a new RAND Corporation study.

The only scenario where legalization in California could substantially reduce the revenue of the drug trafficking organizations is if high-potency, California-produced marijuana is smuggled to other U.S. states at prices that are lower than those of current Mexican supplies, according to the study from the RAND Drug Policy Research Center. RAND is a nonprofit research organization.

The study calculates that Mexican drug trafficking organizations generate only $1 billion to $2 billion annually from exporting marijuana to the United States and selling it to wholesalers, far below existing estimates by the government and other groups.

The RAND study also finds that the often-cited claim that marijuana accounts for 60 percent of gross drug export revenues of Mexican drug trafficking organizations is not credible. RAND's exploratory analysis on this point suggests that 15 percent to 26 percent is a more credible range. Given that California accounts for about 14 percent of the nation's marijuana use, this suggests that if marijuana legalization in California only influences the California market, it would have a small effect on drug trafficking organizations -- cutting total drug export revenues by perhaps 2 to 4 percent.

However, the impact of legalization on Mexican drug trafficking organizations' bottom line could be magnified if marijuana cultivated in California is smuggled into other states, according to the study. After legalization, if low-cost, high-quality marijuana produced in California dominates the U.S. marijuana market, then the Mexican drug trafficking organizations' revenue from exporting marijuana could decline by more than 65 percent and probably closer to 85 percent. In this scenario, results from the RAND study suggest the drug trafficking organizations would lose roughly 20 percent of their total drug export revenues.

"Legalizing marijuana in California would not appreciably influence the Mexican drug trafficking organizations and the related violence unless exports from California drive Mexican marijuana out of the market in other states," said Beau Kilmer, the study's lead author and co-director of the RAND Drug Policy Research Center. "If that happens, then legalization could reduce some of the Mexican drug violence in the long run. But even then, legalization may not have much impact in the short run."

In November, California voters will consider a ballot measure titled the Regulate, Control and Tax Cannabis Act of 2010 -- on the ballot as Proposition 19 -- that would authorize local jurisdictions to regulate and tax the commercial cultivation and sale of marijuana. Such activities would remain illegal in jurisdictions that do not opt in. In addition, the measure would make it legal for those aged 21 and older to cultivate marijuana on a 5-foot-by-5-foot plot and possess, process, share or transport up to one ounce of marijuana.

Some Proposition 19 supporters argue that legalizing marijuana could help curb drug violence in Mexico and frequently reference a 2006 U.S. government report suggesting that marijuana exports account for 60 percent of all Mexican drug trafficking organization revenue. The government has since retracted the 60 percent figure.

"No publicly available source verifies or explains the mythical 60 percent figure and subsequent government analyses revealed great uncertainty about the estimate," said study co-author Jonathan P. Caulkins, the H. Guyford Stever Professor of Operations Research at Carnegie Mellon University's Heinz College and Qatar campus. "Our analyses suggest that smuggling marijuana across the Southwest border accounts for 15 to 26 percent of the export revenues generated by Mexican drug trafficking organizations."

Researchers examined other examples of organized crime groups losing substantial revenues to assess how drug-related violence in Mexico might be affected.

"Projections about the effect of a large revenue decrease on violence in Mexico are particularly uncertain, but there are some scenarios that suggest a large decline in revenues might provoke increased violence in the short run and a decline after some years," said study co-author Peter Reuter, a professor of public policy and criminology at the University of Maryland.

The RAND study employs replicable methods for estimating revenue earned by Mexican drug trafficking organizations for exporting marijuana and other drugs to the United States. Most estimates of international drug profits and supplies do not use methods that allow others to review the findings and reproduce the methods at a later date, researchers say.

The study does not calculate revenue from drug trafficking organization production and distribution within the United States, which -- apart from marijuana in California -- would not be affected by Proposition 19 and is extremely difficult to estimate with existing data, according to researchers.

Kilmer said the work underscores the need to develop better information about marijuana use and supplies to help guide public policy. For example, surveys asking the public about marijuana use should ask about the amount and type of marijuana used and how it is consumed -- key questions not asked today.

###

RAND Corporation: http://www.rand.org


Thanks to RAND Corporation for this article.

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Comments

AmoebaMike
Independence Science
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Wed, Oct 13, 2010, 12:49 pm CDT

I'll be the naive one to ask this:

How much is an ounce? Like a day's supply, 1 joint's worth, ???


Brian Krueger, PhD
Columbia University Medical Center
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Wed, Oct 13, 2010, 12:55 pm CDT

Are you trying to out the LabSpaces stoners?  I have no clue.  Maybe google knows the answer!


AmoebaMike
Independence Science
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Wed, Oct 13, 2010, 1:29 pm CDT

Some people have no problem talking about their recreational past (or present). They can out themselves.  ;-)

Google will tell me how much an ounce costs, but would it tell me how long it would last? and I just tried googling how long it would last. Up to a week if you smoke all the time.  1-2 on average. 6 months to a year if you don't smoke much.

So it seems that an ounce is a fair amount to carry considering going on vacation or something.


AmoebaMike
Independence Science
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Wed, Oct 13, 2010, 1:30 pm CDT

that was 1-2 months, on average Wink


Genomic Repairman
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Wed, Oct 13, 2010, 3:26 pm CDT

I don't know if it would cut cartel revenues but Papa Johns would have a huge earnings gain the first quarter that this happens.


Will
UC Davis
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Wed, Oct 13, 2010, 5:01 pm CDT

So I was looking into the pros and cons of prop 19 the other day.

 

Pros:

1) California's economy would grow by around 20 billion dollars

2) Create jobs in California

3) Reduce crime in California

 

Cons:

1) Employers in California that bid for public contracts and grants that are ultimately funded by the federal government would no longer be eligible for those contracts and grants if Proposition 19 passes because Proposition 19 would prevent them from being able to "effectively enforce the drug-free workplace requirements outlined by the federal government". This would result in further harm to California businesses and their workers, according to the California Chamber of Commerce: "Proposition 19 creates special rights for employees to possess marijuana on the job, and that means no company in California can meet federal drug-free workplace standards, or qualify for federal contracts. The California State Firefighters Association warns this one drafting mistake alone could cost thousands of Californians to lose their jobs."

- losing federal grants could cost schools as much as $9.4 billion in lost federal funding", according to public school superintendent John Snavely, Ed.D.

Therefore money would be lost, but it would bring in a lot of money.

2) Could drive under the influence without being arrested as long as nothing happened.

3) Employers would not be able to pre-emptively remove workers who smell of marijuana use from sensitive jobs such as operating heavy machinery or running medical lab tests but would instead have to wait to take action until after an accident occurs.

4) Due to California's strong law against legislative tampering, in the case of unexpected negative secondary consequences, the California State Legislature would be unable to effectively address those problems.

 

I can't decide on which side of the fence I am leaning

 

 

 


Will
UC Davis
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Wed, Oct 13, 2010, 5:05 pm CDT

Accoding to:

"Drugs: To Legalize or Not", The Wall Street Journal, April 25, 2009

and

"Mexican drug lord officially thanks American lawmakers for keeping drugs illegal", Huffington Post, March 29, 2009

Legalizing it would reduce funding to drug cartels.


JanedeLartigue
UC Davis
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Wed, Oct 13, 2010, 5:11 pm CDT

Regarding points 2 and 3 surely there has to be some way around this when writing the legislation.  If we can think of some of these negative points in advance surely we should be able to work around them. Plus these arguments don't make sense to me.  Alcohol isn't illegal but you could still be arrested for driving under it's influence and for being drunk in the workplace, why would the same thing not apply for marijuana?


JaySeeDub
Dub C Med School
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Wed, Oct 13, 2010, 5:21 pm CDT

@Genomic Repairman - Didn't you know?  There's a reason why In-N-Out is open until 1am around most campuses in California on weekdays, and 2am on weekends...

@ameoba mike - Now, lemme preface by emphatically stating that I do not smoke.  That said, the average joint has about .02 to .03oz (0.6 - 0.8g) of cannabis per.  Roughly.  I had to think back on the buying trends of a lot of friends in terms of volume, frequency and whether finals/midterms were upon them.  Again, I don't smoke.  So if someone out there has first hand knowledge, I'll defer to their expertise on the matter.  I wonder if I could get useable data if I polled Berkeley students on Friday night...


Will
UC Davis
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Wed, Oct 13, 2010, 5:40 pm CDT

The point is though that the proposition has been written and people are voting on the way it is written now.  Loop holes mean that driving under the influence and working under the influence would be allowed.

 


Will
UC Davis
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Wed, Oct 13, 2010, 5:44 pm CDT

I haven't actually read the proposition but it might be because it is being coined as a medication?


AmoebaMike
Independence Science
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Wed, Oct 13, 2010, 7:49 pm CDT

@JaySeeDub, thanks for the info!

@Will, isn't it the case that you can be charged with driving under the influence if you are under the influence of anything that causes you to fail a field sobriety test?

 

Charlie

Guest Comment
Thu, Oct 14, 2010, 10:53 pm CDT

What if it was legalized & then Phillip & Morris & other tobacco companies would start marketing

them & it being sold like cigarettes with an age limit to purchase, laws prohibiting one from

being under the infuence- like alcohol ? Of course, you could grow your own, like people who

make their own beer & wine, but you still couldn't drive, work while being under the influence.

Just wondering.

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