Regional Implications of California's Prop 19
On November 2nd, California voters will head to the polls to vote on, among many other things, Proposition 19. Also known as the "Regulate, Control and Tax Cannabis Act of 2010" (the text of the proposed law can be downloaded here), Proposition 19 is a ballot proposition which would legalize and regulate recreational marijuana use in California. "Adults could possess up to one ounce of the drug and grow small gardens on private property. Local governments would decide whether to allow and tax sales of the drug," explains the Associated Press. California's Proposition 19 has sparked a debate about the potential effect the end of prohibition of marijuana in the United States could have on drug cartels, and whether other countries should follow suit. Proponents argue that Proposition 19 will cut off funding to drug cartels via a reduction in revenues from marijuana sales and provide an important first step toward the end of the current drug war policies. Opponents argue that the impact on revenues will be insignificant, as marijuana is not as lucrative for drug cartels as other drugs, such as cocaine and heroine, and other criminal enterprises, including kidnapping, extortion, and human smuggling. The main group advocating for the passage of Proposition 19, Yes on 19, argues that Proposition 19 will "cut off funding to violent drug cartels across our border who currently generate 60 percent of their revenue from the illegal U.S. marijuana market." However, a new RAND paper released this week counters that argument. The authors of "Reducing Drug Trafficking Revenues and Violence in Mexico: Would Legalizing Marijuana in California Help?" find:
- Mexican DTOs' gross revenues from illegally exporting marijuana to wholesalers in the United States is likely less than $2 billion;
- The claim that 60 percent of Mexican DTO gross drug export revenues come from marijuana should not be taken seriously;
- If legalization only affects revenues from supplying marijuana to California, DTO drug export revenue losses would be very small, perhaps 2-4 percent;
- 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.
- 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.
The director of the U.S. Office on National Drug Control Policy (ONDCP), Gil Kerlikowske, applauded the new RAND report and emphasized that "this report shows that despite the millions spent on marketing the idea, legalized marijuana won't reduce the revenue or violence generated by Mexican drug-trafficking organizations." However, with the release of RAND's new paper, many analysts have zeroed in on the report's fifth key finding listed above: "If marijuana is smuggled from California to other states, it could undercut the sales of Mexican marijuana in much of the U.S., cutting DTOs' marijuana export revenues by more than 65 percent and probably 85 percent or more," a scenario which RAND estimates could lead to a 20 percent loss of total drug export revenues for drug trafficking organizations. On the Foreign Policy blog, Joshua Keating asks, "with this caveat, couldn't the report be viewed less as a case against legalization in California than an argument for extending it nationwide?" Many proponents of the end of marijuana prohibition are calling Proposition 19 just that--a first step toward the end of prohibition nation-wide and the beginning of an exit strategy from the "disastrous" war on drugs. On the other hand, opponents to Proposition 19, including Mexican President Felipe Calderon and Colombian President Former Mexican President Vicente Fox: According to the Los Angeles Times, former President Vicente Fox is calling for legalization and regulation of all drugs as the best way to cripple the drug cartels economically. Fox recently said that "passage of Proposition 19 would be a 'great step forward' and could 'open the door to these ideas for us.'" The Economist magazine:
...The United States remains steadfast in its commitment to the prohibition of drugs, in the face of all the evidence that this policy fails to curb their consumption while creating vast profits for organised crime. It is welcome that California is now debating before a referendum on November 2nd, whether to legalise marijuana. This newspaper would vote for the proposition, because we believe that drug addiction, like alcoholism and tobacco consumption, is properly a matter of public health rather than the criminal law. If California votes in favour of legalisation, Mexico would be wise to follow suit (the bottom would anyway fall out of its marijuana business). The drug gangs would still be left with more lucrative cocaine and methamphetamines. But it would become easier to defeat them. And Mexicans should make no mistake: they must be defeated. The idea of going back to a tacit bargain that tolerates organised crime, favoured by some in Mexico, is inimical to the rule of law, and thus to democracy and a free society. The sooner Mexico turns its new-found sense of urgency into a more effective national policing and law-enforcement strategy the better.
Mary Anastasia O'Grady, op-ed columnist for the Wall Street Journal:
To help Mexico deal with this "antitrust" problem, the U.S. has to recognize that competition in the narcotics sector is preferable to the monopolistic syndicates that threaten the state and could move north. But this would require greater flexibility from U.S. drug warriors. ... Mexican officials estimate that the marijuana business makes up more than half of the Mexican cartels' income. Legalizing grass in the U.S. would mean increased competition for Mexican exporters and lower profit margins, thereby depriving the monopolies of important income.
Edward Schumacher-Matos, op-ed columnist for the Washington Post:
In the upcoming California referendum on legalizing marijuana for recreational use, Mexican President Felipe Calderón and U.S. drug czar Gil Kerlikowske have something in common. Both are missing the forest for the weed. ... Calderon's assertion that this is a hypocrisy is right, "but only if you don't see the California referendum for what it is: a step. And a very big one, considering that California represents one-seventh of American marijuana consumption and has long been a first-mover in American cultural and political trends." But what all this means for the United States and Mexico is that more steps away from prohibition need to follow. Issues such as pricing, taxation and other drugs also need careful confronting. But marijuana and California are good beginnings.
Ruben Aguilar, former Mexican government spokesman under President Vicente Fox:
People in California will be in their supermarkets and their Walmarts with their legal pot, and down here we'll be killing each other. Things will have to change here. It makes no sense for us to keep killing.
Stephen Downing, former Los Angeles Police Department Deputy Chief of Police:
Proposition 19 is a giant step toward a much-needed, new direction for our marijuana policies. We've tried the prohibitionists' way, for over forty years, and the only result has been more and more drugs flowing into our country and more and more profits going into the pockets of organized criminals. There's one reason we don't see wine cartels growing grapes in our national parks, and that's because alcohol is legal. We have to move away from prohibition and toward controlling and regulating the market for marijuana, just as when we ended alcohol prohibition to put Al Capone's smuggling buddies out of business.
Arguments against Proposition 19 in relation to its impact on the fight against drug cartels: Both Mexican President Calderon and Colombian President Santos have come out against Proposition 19, claiming that its passage would generate a "peculiar paradox" and a "hypocrisy" if the United States legalizes consumption domestically, but still encourages other countries to combat drug production within their borders. The two presidents have argued that such a decision would have international implications and therefore cannot be made unilaterally. "Unilaterally we cannot legalize drugs because they are a problem not only for national security but also have international implications," noted President Santos. Mexican President Felipe Calderon: "I think they have very little moral authority to condemn Mexican farmers who out of hunger are planting marijuana to feed the insatiable [U.S.] appetite for drugs." Colombian President Juan Manuel Santos: Legalizing marijuana in California as the region combats illegal drug use and trafficking will "generate a peculiar paradox." "How does one explain to indigenous people that they are not to grow marijuana at the risk of being thrown into jail, but that in the richest state of the United States, they have legalized its production, sale, and consumption?" Secretary General of the Organization of American States Jose Miguel Insulza: While Secretary General Insulza has argued that "the war on drugs, as it has been carried out, has not produced the expected results," and that the fundamental flaw of the strategy is that we have not attacked the finances of the narcotraffickers, he appears to come out against Proposition 19. He has said that if Prop 19 passes, it will mean people abroad will no longer be ready to "fight to their death against a product that is going to be legal at the other side of the border."