Potential impact on Mexico of U.S. marijuana initiatives

Houston Chronicle

November 9, 2012

 On Tuesday, Nov. 6, Washington and Colorado became the first two states to legalize recreational marijuana. Much like the presidential race, the results were exactly what the pollsters predicted. Marijuana legalization passed in Colorado and Washington, while Oregon's similar initiative failed after having long lagged in the polls. Massachusetts also approved its medical marijuana initiative while Arkansas' failed.

The initiatives became major news in Mexico, which views their bloody struggle with Mexican cartels as intrinsically linked to the U.S. demand for drugs. Mexico's Institute for Competivenessor (IMCO) released a report arguing that if all three initiatives passed, they would significantly undercut the Mexican cartel marijuana market in the U.S. and reduce cartel profits by approximately 30 percent The report's authors further argued that the passage of the initiatives would be most damaging to the Sinaloa cartel, which has a long-established reputation for focusing on drug trafficking over other activities like kidnapping and extortion. Mexican president-elect Enrique Pena Nieto's top adviser, Luis Videgaray, argued that the passage of these initiatives changes the "rules of the game" in relation to the United States on drug enforcement.

HOW WILL THIS IMPACT MEXICO?

In the short-term, these initiatives will probably not have a large impact, though over the long-term the effects could significantly weaken Mexico's cartels. Colorado's initiative will not go into effect for more than a year because the regulatory framework must be adopted by the state by July 1, 2013, and only in October 2013 can licenses to sell be distributed. On the other hand, Washington's law goes into effect in January 2013, but it is a more geographically isolated state; it would be easier to drive from Colorado to many other states to distribute Colorado marijuana. This process, which is likely and assumed in IMCO's report, is the market mechanism that could reduce Mexican cartel profits.

THE ROLE OF THE FEDERAL GOVERNMENT

The federal government's response also matters. If the federal government chooses to continue prosecuting dispensaries as it has where medical marijuana is distributed at the state level, these recent legalizations will likely have less of an impact on Mexican drug cartels because federal prosecution will limit production. Many of the studies that attribute the ballot measures with potentially high cuts in the profit margins of Mexican cartels depend on the assumption that Washington and Colorado marijuana will be sold in other states and thus be able to undercut the price of Mexican marijuana. This is not an unrealistic assumption. However, if the federal government can effectively prevent or raise the cost of this interstate commerce through enforcement, the benefit for Mexico may be dulled.

Over the long-term, the passage of these initiatives may be a critical moment in the global prohibition regime's history. As legitimate political entities legalize marijuana and many Latin American nations consider doing the same, the legalization debate has entered the mainstream. Legalization advocates can no longer be written off as occupying a fringe position. This shift in the debate will likely lead to the passage of similar legislation in other states and may be important for Mexico as the laws change the marijuana markets and deny profits to cartels.

WHY SO LONG?

Many, such as Cultural Baggage Radio show host Dean Becker, have questioned why it has taken so long for the marijuana legalization debate to shift. There are numerous structural factors, the most important of which are deeply ingrained in the political structure and culture of the United States.

In the polarized American two-party system, the conventional wisdom is that moving to the middle is how you get votes. This may partially explain why marijuana legalization has taken so long to become politically viable. Counter intuitively, marijuana legalization garners support from both sides of the political spectrum. On the left, it is supported by those who promote a public health or harm-reduction approach, while on the right it is supported by libertarians motivated by the principle that the government should not control what free individuals choose to do with their bodies and who believe black markets are inherently problematic. Both of these positions tend to be on the wings of the political spectrum, not the center, so only ballot initiatives (and not elected legislators) have successfully brought these constituents together to pass legislation.

It is also important to remember the structural conservatism on this issue quite literally built into the system. Those in Washington who hold security clearances at all levels have gone through extensive background checks in which drug use is a critical question. Public servants who have survived this vetting process have a selection bias.

Other countries, like Portugal and the Netherlands, have been more culturally comfortable with "grey" legal areas, or systems of decriminalization in which marijuana is still illegal, but laws go unenforced in designated areas. Anglo-Saxon political culture tends to chafe at the notion that there are laws that go intentionally or selectively unenforced. Going forward on this issue, America's legal grey area will be the tension between federal and state laws, which explicitly contradict each other.

TAGS:  Washington  Colorado   Massachusetts   legalize recreational marijuana   Cultural Baggage Radio   Dean Becker   black markets   Portugal    Netherlands   Anglo Saxon political culture   political structure and culture of the United States.