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As “Carlo” walks around New York City, his gentle manner, warm smile, and crisp button-down shirts do nothing to betray that he has some $10,000 in illegal drugs stashed in his pockets. In his 30s and from the Upper West Side, Carlo is a dealer in some of New York’s purest narcotics. His current best seller is the chemical compound MDMA, popularly known as Molly. Each of the capsules he sells at $20 a pop gives a customer a four-hour euphoric high. On any given weekend, Carlo’s product is consumed by hundreds of New Yorkers. He clearly takes pride in his role sparking dance-floor romances across the city. One of his frequent clients calls him a “chemical cupid” and says Carlo’s MDMA is the most potent she’s ever experienced. With good-quality MDMA fast becoming one of the most sought-after drugs, Carlo has a prime spot in a very popular distribution pyramid. During the evenings I spent accompanying Carlo on his rounds, I learned that his customer base included people of all walks of life. Within one four-hour period, I saw Carlo cater to NYU students, lawyers, artists, bankers, and a college professor—all ordering drugs to their apartments as casually as if it were Chinese food. “This isn’t something I can do forever,” Carlo told me. “People always get caught. Someone gets jealous, your phone gets tapped, someone snitches, or you get stupid and sell something in the wrong place.” As we spoke, his phone vibrated constantly; he responded to each text, scheduling his evening ahead. Carlo has been dealing for almost 15 years. He sells marijuana, cocaine, ketamine, and magic mushrooms, but his most-prized asset is his connection to a Canadian MDMA distributor. Over the years, their working relationship has grown into a friendship, but even now Carlo isn’t sure how the drugs actually make it across the border. He doesn’t care to ask. He sells a portion of his monthly stash to other dealers for a quick turnaround, but he likes to maintain a direct connection to his favorite clients—around 200 regular customers. Carlo claims he never dilutes his MDMA. The best way to distinguish himself in a competitive, chaotic market—and maintain the luxury of selecting clients—is to be pure and consistent. At one residence, a businessman in his 40s opened the door, still dressed for the office in a suit and silk tie, still, by phone, issuing stern instructions to one of his colleagues. He held the phone to one ear while he winked and grinned at Carlo, then reached out to shake his hand. The man led us into the foyer and waved his hand toward the kitchen to indicate that we should make ourselves comfortable. Based on the decorations and the pictures on the wall, he appeared to have a wife and at least two children. The drug business favors extreme risk-takers—people who are willing to make gambles few Wall Street executives could stomach. Carlo already knew what this man wanted. He was a longtime customer who had texted his order ahead of time using code phrases. Carlo does most of his business via text message. If an established customer, like the businessman at the door, has friends who want Carlo’s services, those new patrons will have to be introduced by text. This ensures that new referrals come strictly from within trusted social circles, by way of friends who vouch for the drugs’ quality. Customers end up acting as their dealers’ advertising and security services. Carlo pulled out a handful of small plastic bags. Each one contained five or 10 pills, prepackaged selections for various customers. It was a silent reminder that he was on a busy schedule. The man on the phone finished his call and greeted Carlo warmly. They exchanged pleasantries, while Carlo laid out a bag of 20 MDMA pills and two one-gram bags of cocaine. The phone man handed over $600 that Carlo wouldn’t count until leaving the apartment.* There was a pretense of friendship in the whole interaction. It wasn’t genuine, but it made them both feel comfortable. They were, after all, committing a crime together.

In a city like New York, drugs are a part of everyday life for people from all social classes. Unnumbered professionals take part in this underground economy: bankers and ad executives, fashion designers and fitness trainers. In many circles, drugs are nearly as easy to find as liquor. For dealers, this is an unusual time to be in the business. There are now 20 states where marijuana is legal, decriminalized, or approved for medical use. The mandatory drug sentences that put half of all current federal inmates behind bars could soon be changing, thanks to a bipartisan bill that’s making its way through Congress. Attorney General Eric Holder has made public statements about commuting drug sentences, and Governor Jerry Brown recently pardoned 63 California drug offenders. Even the president of the United States has lent an air of legitimacy to marijuana. “I smoked pot as a kid, and I view it as a bad habit and a vice,” Barack Obama told The New Yorker, “not very different from the cigarettes that I smoked as a young person up through a big chunk of my adult life. I don't think it is more dangerous than alcohol.” Dealers in New York know that a new type of entrepreneur may soon cut them out of the picture. New York dealers have been watching all of this with a mixture of approval and concern. At the moment, their business is distorted by black-market effects: It favors extreme risk-takers—people who are willing to make gambles few Wall Street executives could stomach. There are paper trails to cover and huge stashes that need to be hastily offloaded, not to mention large deliveries to be carried through city streets. Dealers also have to earn a distinctive kind of trust from their customers, since there’s no legal oversight or recourse if a stash comes in bad. These dynamics may change, depending on whether, and which, drugs become legal. Customers in Colorado and Washington State no longer need to pay a premium for black-market marijuana. There are taxes to file and legal standards to meet. Different skills have come to the foreground—knowledge of specific strains and their medicinal applications suddenly matter far more than sheer audacity.

Dealers in New York know that a new type of entrepreneur may soon cut them out of the picture altogether, and they’re preparing for this in different ways. Some are hoping to get out of the game before the legal market takes over completely. Others are positioning themselves to build legitimate businesses. In the meantime, there’s a vast demand for their services, and it shows no sign of abating. As the Nobel Prize–winning economist Milton Friedman wrote in a 1972 Newsweek column, “So long as large sums of money are involved—and they are bound to be if drugs are illegal—it is literally hopeless to expect to end the traffic.” On a gusty late-November day, I met “Max” near the Staten Island Ferry. Clean-cut and modestly dressed, he blended easily into the crowd, but inside his messenger bag were about 60 to 70 small plastic containers full of marijuana. This supply would last him till late afternoon, after which he’d need a refill to meet the demands of his evening customers. Over the course of a few weeks, Max invited me to join him on several delivery runs. I followed him to apartments, parties, libraries, and even offices. In one five-hour shift he serviced 30 buildings in different parts of Manhattan. “I like seeing people enjoy the product,” Max told me as his driver took us to his uptown appointments. “I think if I had a Yelp page, it would have some pretty great reviews.”

Max grew up downtown, in an artsy but rough neighborhood. He started smoking marijuana as a teenager, and began dealing it in college. In those days, he says, he sold mainly to “the 20-year-old pothead crowd.” But over the years, he started seeing more mature customers who valued his encyclopedic knowledge of the product. Today, Max’s affluent Manhattan customers number in the high hundreds, and he’s earned a citywide reputation as the “sommelier of weed.” During one of our meetings, he shook several buds into a large glass bowl, inviting me to smell the aroma and asked if I could pick up any nuanced scents. He pointed out the fine purple leaves woven into the larger green leaves; he talked about heavy Indica strains, energizing Sativa strains, and the perfect hybrids. Many of his patrons use weed to treat medical conditions, he told me. “I’ve adapted more towards a strong clientele of people who have cancer, Tourettes, ADD, and they just don’t like pills. So I get specific strands that I know will help.”

Along with his intimate knowledge of the product, the key to Max’s success is his direct connection to a West Coast partner. This secret source has relationships with a variety of weed farms in California. According to Max, even many licensed farms in states where medicinal marijuana is legal sell most of their stock under the table to feed illegal demand. They have good financial incentives to do so: Selling to legal dispensaries averages out at $1,800 per pound, but on the black market, a pound of high-quality marijuana can make you upward of $5,500 dollars. “I think if I had a Yelp page, it would have some pretty great reviews.” Normally, there are several go-betweens in the supply chain. Max has cut out all these extra stages, using a simplified transportation mechanism he’s worked out with his California partner. He wouldn’t go into detail about how his partner gets the monthly supply into the city, but he suggested that very few people could imitate his methods. His streamlined system gives him an important edge over most New York marijuana vendors: He's able to offer his customers an array of high-quality options at significantly discounted prices. His jars of the product currently go for $50, with frequent discounts for bulk orders. Roy Klabin I watched Max wield his competitive advantage at one delivery site, when a customer’s friend showed off a set of elaborately decorated boxes from a new “elite” weed delivery outfit called ACME Organics. The friend praised the company’s branding and speculated that it would be well positioned to take over the market when weed became legal in New York. Max listened patiently and then offered one of his small plastic containers as a free sample. He explained that ACME would never be able to beat his quality-to-cost ratio and left with a polite farewell, encouraging the friend to call him if he wanted more. During an evening in early winter, Max and I arrived at a lavish 40th-floor apartment in downtown Manhattan. The owner had called in a large order for a party, and when we came in, there were at least 80 stylishly dressed people lounging on the furniture and chatting loudly over the music. As Max headed toward a back room with his customer, he pointed out a man in the corner and told me to talk to him. The man in question had neatly trimmed hair and stylish dark clothing. He was flanked on either side by two large, muscular men. As I walked towards him, he watched me sharply, as his two attendants pivoted to block my approach. The man then asked if I wouldn’t mind letting his friend hold my phone and suggested we talk on the balcony. Once outside, he introduced himself as Viktor. He shared a few thoughts about America’s high incarceration rates, showing an intellect I hadn’t expected from his tough appearance. “A lot of my friends—close childhood friends—are serving time for selling weed,” Viktor explained. Eventually, he told me two things about himself. The first was that he was one of the largest distributors of marijuana on the East Coast. The second was that he worked for the government. How many cities did Viktor serve? How many dealers on the East Coast relied on his supply? Before I could learn more, Viktor promised me a full interview soon, with non-negotiable limitations on what I could ask. He led me back inside, where I got my phone back from his friend and watched the trio leave the party. I met Viktor again in mid-January, joining him in the back of a car parked in Tribeca. As his driver navigated towards the highway, Viktor put in a pair of ear buds and told me it would be a long drive. “You snore,” he smirked a few hours later. While I was dozing, it had grown dark outside and we’d turned down a country road with more forestry than housing. We pulled up to a large country home attached to a conservatory. The property was situated on an acre or two of open field that eventually gave way to the thick tree line. I followed Viktor and his driver into the back entrance and down through a tunnel. In a large basement room was a grow operation with several large marijuana plants. The smell was overwhelming. The room had a lush tropical feeling, with misted water, rich fertilizer, and hot lamps constantly feeding the plants. It was a hybrid of pulsing technology and verdant greenery. As we climbed the stairs into the house, I asked Viktor whether he grows all the marijuana for his distribution network. Viktor told me he gets the overwhemling majority from California, but he likes to grow a little himself and experiment with strains. In the living room, two men were packing large cardboard boxes full of vacuum-sealed marijuana bags. I tried to imagine the math involved in this level of production. How many cities did Viktor serve? How many dealers on the East Coast relied on his supply? Viktor wouldn’t answer any of my questions directly. But he took me up another flight of stairs to an office where money was being counted. On the main table, Viktor pointed to $120,000 in stacks of $5,000. On another, a stern-faced man sorted more money. From our conversation, I surmised that Viktor serves a large segment of the East Coast and personally takes in $24,000 to $32,000 per month after all his other costs are covered. Most of the cash I saw would go toward business costs like employee payments, marijuana purchases from California, security, and transportation.

Later, in a nearby hotel room, Viktor told me about how he got into the drug business. He grew up in a lower-middle class family, the oldest of three siblings. His father managed to send them to private schools, so Viktor experienced two disparate worlds: his industrial blue-collar neighborhood and the kids who “had it all set.” “I discovered drugs at 12 or 13, at a house party, from one of the kids I looked up to. Fell into the circle. Took a couple of hits. Loved it. And after that, it became a chronic habit. And the only way to support that is to sell it yourself.”

Viktor told me he’d built his operation through business savvy, dedicated work, and a few lucky breaks. He finished college as he grew his drug business, and he’s been successful at his legitimate jobs, which have always included some kind of security work. He’s fascinated with the criminal-justice world and even considered becoming a federal agent. At one point, he said, he wanted to leave dealing behind, but he realized the information he was gaining in the security sector could help him grow his operation within sensible hidden boundaries. Through Viktor’s vague explanations, I inferred that he works for a private contractor that helps the government track financial malfeasance and fraud. He told me he works hard at his job and is catching “bad people.” It would be impossible to confirm his claims, but based on his account, it seems plausible that he’s among the 5.1 million Americans who have security clearance. “I’ve got an out, an amount I’m shooting for, but time is running out. The margins get thinner every year.” I asked Viktor how he keeps himself from being discovered. “I use a proxy for the first couple of meetings. I’ll go so far as, if there’s a new client who wants to discuss what we can do for them, I’ll send someone else with a Bluetooth earpiece. I’ll be dictating what to say, and listening to the answer, but I’m somewhere else, miles away.” I asked Viktor to elaborate on the distribution chain Max had described. He told me about the brokers who connect marijuana farmers in Northwest California with “heavy players” in San Francisco and Oakland. “The farmers are too cautious to load up a van,” he explained, “and to get the weed from the Emerald Triangle—all the way up from Trinity County down to San Fran—you’re talking about a three-hour drive. And everyone in the world knows that this is the weed mecca of the world. So northbound cars are getting searched for cash, and southbound cars are being searched for weed. It’s really tricky getting the weed in bulk out of that area.” This is where the broker comes in. Having a trusted third party transport the weed is the least risky way to get it into the marketplace. “Because you have somebody coming to you, on your terms, paying cash. Boom. Immediately, in one deal, all your illegal weed has just turned into cash. Farmers are eager to offload in bulk, so as buyers we entice them by offering to buy the biggest quantities. The more bulk you buy, the more leeway you have with price.” According to Viktor, it’s a buyer’s market. “There are plenty of people making weed. In California and Colorado, they got more weed than they know what to do with.” In order to become a broker, Viktor explained, you have to get an in with a farmer—which is no small feat. “It’s easier to befriend distributors than farmers. If you’re a farmer, you’re protecting everything about yourself. Even if you were going to have a visitor, you’re going to black bag their head all the way up. You don’t want them knowing how to get there, remembering anything about where you’re at. If the wrong person finds out about your million-dollar pot farm, they’re going to come up there and kill you. There’s no witnesses, because it’s in the middle of nowhere.”

Reuters

Viktor told me that legally registered marijuana farmers, too, guard their crops with extreme caution. “Even if you’re running a legitimate business, you’re still a target to the criminal element. If you’re a farmer growing at a mass scale, at any given time you have a million dollars worth of product there. That kind of money brings crazy ideas into people’s heads.” Viktor has a complex position on legalization. He told me he’d be happy working for the “Budweiser of weed” if marijuana were legalized nationally. At the same time, he acknowledged that state-by-state legalization is already hurting his business. “I’ve got an out, an amount I’m shooting for, but time is running out,” he told me. “The margins get thinner every year. The shifting legal landscape is destroying the margins.” He speculates that marijuana, if not other drugs, will soon be legal nationwide. “Now that the argument is economical, and the tax profits are so high, how can they argue against the financial incentives? We’re a capitalist nation, aren’t we?” His views are less ambiguous when it comes to mandatory prison sentences. He spoke passionately about his friends who are serving time. “Jails are full of people for selling a plant that grows out of the ground—that 50 percent of people view as a medicine—that no one has managed to prove causes any harm whatsoever. Just seems crazy to me.” “If you had a son, would you be okay with him doing this?” I asked. “Probably not. If you get jammed up, you can become a convicted felon and that damns you to do it for the rest of your life, because you won’t get anything but a $7.50 an hour job—if that. You give somebody a felony record for life, what did you accomplish? You’ve just created a lower-class idiot that has to commit more crimes to survive.” * An earlier version of this article read that each bag contained 100 grams of cocaine. We regret the error.