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Mar 15, 2012 | 15:13 GMT

6 mins read

Criminal Commodities: Marijuana

Stratfor

Marijuana is the most popular illegal drug in the United States — by a wide margin. For decades Mexican drug cartels have helped meet this vast demand, partially because the cartels face few limitations in growing and harvesting the drug. Marijuana can flourish in a diverse range of climates and environments with low-skilled maintenance, and multiple crops can be produced each year. As a result, several of the cartels, including Los Zetas, the Sinaloa Federation, the Gulf cartel and La Familia Michoacana, traffic marijuana into the United States.

Yet these advantages are not unique to Mexico, and the cartels cannot control the U.S.-bound supply to the same degree that they can with other drugs. Because cannabis can be grown practically anywhere, no group can control its production outright in their own country — let alone in other countriesThis forces the cartels to compete with ballooning domestic marijuana production inside the United States and makes the drug less profitable than methamphetamine, cocaine or heroine. 

High Demand, Easy Production

Roughly 17.4 million people in the United States admitted use of marijuana in the previous month in 2010's National Survey on Drug Use and Health, compared to just 7 million who illegally used prescription drugs, 1.5 million who used cocaine, 353,000 who used methamphetamine and 200,000 who used heroin. The nature of marijuana production ensures sufficient supply.  

Unlike cocaine, heroin or methamphetamine, growing marijuana is relatively unsophisticated. Cultivation of Cannabis Sativa and Cannabis Indica, the most common plants used to produce marijuana, can occur both outdoors and indoors and in a variety of climates. In fact, cannabis is grown outdoors in the majority of Mexico’s geographic regions, though cartel cultivation primarily occurs in the Sierra Madre Occidental. It can flourish in three seasons, making three annual harvests and a robust supply possible. While complex cannabis cultivation systems are common for mass production, growing small amounts of marijuana for consumption can be no more complicated than tending a houseplant.                                                                         

The quality of marijuana, and its wholesale value, is dependent on its tetrahydrocannabinol (THC) content, the psychoactive constituent found in the resin produced by the plant's flowering buds. THC typically makes up 1-4 percent of the resin, though certain cannabis strains can produce 20 percent THC depending on plant genetics, growing climate and the harvesting process.

In Mexico, production typically aligns with three growing seasons — spring, summer and fall — with harvests occurring between February and April, mid-July and August, and September and December. The growing cycle from seed to harvest lasts from nine to 29 weeks, during which the grower must complete several steps: After the cannabis seed has been germinated and finished the seedling phase, growers begin identifying male plants from the crop for removal. (Female plants, which contain higher THC levels, will produce seeds if pollinated, reducing potency.) At harvest, buds are either trimmed off the plants, or the plants are uprooted whole. The buds must then be dried usually within 12 hours to avoid mold or fungus formation. This can be done in mass quantity, provided sufficient indoor space and heat. Drying the harvest too quickly or too slowly will affect the quality of the product.

Compared to, say, the highly technical process of methamphetamine production, these steps are relatively simple and require primarily low-skilled labor. As a result, overall marijuana production in Mexico has been able to trend upward alongside U.S. demand.

Mexican Supply

Exact statistics are elusive: Crop seizures are usually reported in metrics such as the number of crop hectares, the number of plants or the weight of dried marijuana seized, which do not equate directly from crop to crop and require guesswork to compare quantities. For example, yield weight can range from a few ounces to more than 2.2 kilograms (5 pounds) per plant for outdoor crops. Variables such as yield, growth rate and cultivation requirements can also cloud estimates, so the amount of marijuana produced by one hectacre of crops can vary vastly from another.  

However, according to the National Drug Threat Assessment in 2011, authorities estimated that 12,000 hectares (nearly 30,000 acres) in Mexico had been potentially cultivated for marijuana as of 2008, which would yield approximately 21,500 metric tons. Overall production in Mexico surged from an estimated 5,600 hectares in 2005 to 17,500 hectares in 2009. In July 2011, Mexican federal authorities seized a 120-hectare marijuana field in Baja California, the largest such bust by Mexican authorities in history, which would have yielded an estimated 120 metric tons of marijuana (as stated, the seizure comparisons are inexact due to metric variables).

However, the Mexican cartels are not alone in benefiting from the ease of marijuana cultivation. Whereas limits on heroin production make it easier for Mexican criminal organizations to dominate the U.S. market, marijuana resists such control.

U.S. Competition

U.S. domestic production of marijuana is booming. U.S. cannabis plant seizures increased from 4,209,086 plants in 2005 to 10,329,185 in 2010, including 462,419 plants seized from indoor crops, according to the Department of Justice. Unlike the more condensed fields common in Mexico, illicit outdoor cannabis crops in the United States are typically spread out in wooded areas (including U.S. national forests) for the sake of concealment from authorities. Estimates suggest that U.S. producers grow between 200 and 1,600 plants per hectare, which would mean that between 6,455 and 51,645 hectares were seized in 2010. This indicates that production in the United States is comparable to production in Mexico.

U.S. production will likely increase due to both demand and the relaxing of U.S. marijuana laws. While both possessing and cultivating marijuana are illegal at the federal level, several states have enacted laws allowing marijuana use and growth by individuals for certain medical conditions. In 1996, California passed the Compassionate Use Act, which protects individuals who grow and use marijuana under supervision from medical doctors. Since then, additional states have passed similar laws.  

Cartels such as La Familia Michoacana are reportedly invested in U.S. marijuana production. The prevalence of this is unknown, although Gil Kerlikowske, the director of the White House Office of National Drug Control Policy, said in December 2011 that cartel production is "disproportionate" to other producers. But one effect of legalization could be that the cartels would simply find it more cost-effective to shift marijuana production to the United States.

Still, for the cartels, competition lowers the profitability of marijuana. Production costs approximately $165 per kilogram, while wholesale value in the United States varies from $1,100 to $13,000 per kilogram, depending on quality. These margins are far lower than those of cocaine, meth or heroin. By comparison, in 2009, the street value of meth ranged from $19,720 to $87,717 per kilogram. To make similar profits with marijuana, the cartels would have to produce higher volumes of the drug, so instead they focus on the production of other drugs.

Due to the inherent production and street value variables, it is difficult to estimate revenues from marijuana and discern exactly how much the cartels rely on the drug in comparison to meth, heroin and cocaine. But marijuana will continue to play a central role in cartel activities, despite its limitations as a cash crop.

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