With more than 60,000 victims, politicians are analysing the impact of new US marijuana laws on Mexico’s war on drugs.

In his first month as Mexico’s new President, Enrique Pena Nieto has promised a different strategy to fight the so-called war on drugs.

More than 60,000 people have died in Mexico’s drug violence since 2006 and politicians are looking for new solutions, as sending the military to fight the cartels has not reduced the carnage.

Nieto has cited new marijuana laws in the US states of Colorado and Washington as further evidence that Mexico needs to rethink its drug war policy.

The two states approved the commercial production and distribution of marijuana in statewide referendums on November 6.

The impact of the new US marijuana laws on Mexico is being weighed in terms of the financial impact on drug gangs and the political impact on the Nieto administration.

Drug gang revenue

Some analysts believe the new legislation will hurt Mexican drug gangs as they will lose access to parts of the US marijuana market as their products are displaced by local supplies.

A study by the Mexican Centre for Competitiveness says Mexican drug cartels could lose as much as $1.4bn due to the new laws in the two states.

One of the authors of the report, Alejandro Hope wrote in a clarification of his study that while the lost revenue depends on certain conditions in the US, the impact could be significant.

Counting the Cost – The cost of the ‘war on drugs’

“We do think that losing marijuana revenues could have a transformative impact on the Mexican drug trafficking industry, over and beyond the direct potential reduction of marijuana export income.”

Other analysts, however, aren’t sure the new policies will put a dent in Mexican drug cartel revenue.

“Marijuana is not that profitable. Their big money comes from cocaine. They also make a lot of money from other things. This is a pinprick in terms of the Mexican cartels,” says Keith Humphreys, a former senior White House Policy Adviser on the drug trade.

Drug gang revenue has for years been misused as an instrument in making both pro and anti-legalisation arguments, critics say.

A study carried out in 2010 by RAND Corporation, a global policy think-tank, found that about 20 percent of drug gang revenue comes from trafficking marijuana. It challenged a widely reported estimate that drug gangs earn 60 percent of their revenue from marijuana trafficking.

Beau Kilmer, the author of that study, says in order for marijuana legalisation to have any kind of substantive impact on Mexican drug gang revenues it requires making a lot of different assumptions about what’s actually going to happen in Colorado and Washington.

“We don’t know what the regulatory regimes are going to look like – decisions about what type of production to allow, how many producers to allow, how many stores – those decisions will shape what the market will look like.”

Political posturing?

Aside from the potential impact on drug gangs themselves, there has also been speculation that the decisions in Colorado and Washington could have profound political consequences in Mexico.

In an interview with Time magazine last month, Nieto said that the decisions in the US states of Colorado and Washington to legalise marijuana open, “a space for a rethinking of our [drug-war] policy”.

His chief of staff went a step further telling a Mexican radio programme: “Obviously, we can’t handle a product that is illegal in Mexico, trying to stop its transfer to the United States, when in the United States, at least in part of the United States, it now has a different status.”

“In general, change in a criminal context tends to promote violence, so if you go in on a street sweep and arrest the guys who have five street corners you often see a spike of violence because everyone who’s left wants those street corners. “ -Keith Humphreys, former senior White House drug policy adviser



Despite those comments, Jonathan Caulkins, a professor at Carnegie Melon University and expert on the drug trade, says it’s unlikely the Nieto administration will make significant reforms in its drug war policy as a result of US marijuana policy.

“By most measures the majority of the drug problem in both the US and Mexico does not relate to marijuana, so nothing you’re going to do with marijuana is very likely to decisively change the character of the overall drug policy situation.”

Caulkins says it’s more likely the Nieto administration is concerned about the violence as a result of the trafficking as opposed to which drug is being trafficked.

“When you’re the source or trans-shipment country it makes no difference whether the drug is a soft drug or a hard drug when it’s leading to homicides. When the traffickers shoot a police officer it really doesn’t matter whether the traffickers are trafficking marijuana or cocaine.” Caulkins says Nieto’s comments about US marijuana legalisation could be aimed at getting Washington to give him some political leeway in doing some rethinking about how Mexico fights its drug war.

Future impact

It’s doubtful Nieto would do anything to jeapordise the Merida Initiative, a US security assistance programme that has given Mexico about $1.6bn since 2008 to crackdown on drug gangs.

However, he is promising to take a new approach by refocusing on preventing drug gang murders, kidnappings and extortion – violent crimes that target ordinary citizens.

Nieto has acknowledged that targeting drug gangs and their leadership structure has led to the fragmentation of the drug cartels setting off violent turf wars.

“In general, change in a criminal context tends to promote violence,” says Humphreys. “So if you go in on a street sweep and arrest the guys who have five street corners you often see a spike of violence because everyone who’s left wants those street corners. There could be in the short term an uptick of trouble.”

The US referendums might not significantly affect violence in Mexico, but they could have other implications.

“The reality of the [Colorado and Washington] votes does make it easier for people to do the rethinking and it’s not going to be just Mexico,” says Caulkins.

“Possibly Central American countries are going to be asking the same thing. Uruguay is proceeding with an attempt to legalise low level sales to their own citizens. I think they will be less likely to get push back from the United States given that two US states have legalised.”