By Shannon K. O'Neil, CFR

Editor's Note: Shannon K. O'Neil is senior fellow for Latin America studies at the Council on Foreign Relations. This entry of Latin America's moment first appeared here. The views expressed are her own.



As Americans went to the polls to elect their president last week, voters in Colorado and Washington chose to legalize marijuana (by referendum). Not only does this create conflicting state and federal laws, but it also directly challenges the United States’ war on drugs.

These initiatives, Colorado’s Amendment 64 and Washington’s Initiative 502, directly conflict with the federal Controlled Substances Act, which classifies marijuana as a Schedule 1 drug (along with heroin and LSD) – deemed to have “a high potential for abuse and no accepted medical use.” In 2010, Attorney General Eric Holder announced he would “vigorously enforce” federal laws if marijuana was legalized in California (it wasn’t). Although no official statement on Washington and Colorado has been released, the White House’s website maintains that “the Obama Administration has consistently reiterated its firm opposition to any form of drug legalization.”

If these legalizations stand, it would mean big changes for the U.S. marijuana market. According to a 2010 RAND report, prices would drop dramatically. Consumption would also likely increase – the report estimates that for every 10 percent decrease in price, the number of consumers would rise by 3 percent.

Legalization would also have repercussions for U.S. foreign policy, and especially for U.S.-Mexico relations. A recent Instituto Mexicano para la Competitividad A.C. (IMCO) report by Alejandro Hope and Eduardo Clark estimates that legalization in each state would reduce cartels’ profits by 20 to 30 percent. This revenue drop would change the business models for many organized crime groups, especially those who rely more heavily on marijuana (such as the Sinaloa cartel). But these shifts don’t necessarily portend a decline in violence, especially if the marijuana business is replaced by stepped up robbery, kidnapping, and extortion.

Even if the Colorado and Washington legalizations are delayed and/or ultimately struck down, they may change the conversation surrounding the international drug-control regime. The sitting presidents of Mexico, Colombia, and Guatemala, along with many past presidents of Latin American countries have strongly questioned the current approach to drugs, and have asked for an international evaluation and studies through the OAS and the United Nations. If a groundswell in the United States does the same (at least for marijuana), the political pressure could perhaps spur the federal government to rethink its approach.