That Was the Weed that Was II

High margins and wild profitability is what makes gangs and drug lords rich. It also provides the higher-than-average returns to the “agricultural workers” who grow “crops” that are processed to feed the narco-trade. Good for business if you don’t mind murder, turf wars, arms trafficking, armed insurrection in countries where cartels rival government forces, aids-spreading dirty needles, desperate addicts willing to do anything (add more fun crimes here), tax avoidance on the profits, bribery & corruption and way more than a trillion dollars to pay for the extra cops and prisons to address “the problem.” That half those incarcerated in the U.S. are there for drug-related crimes (and half again of those for dealing or possessing). Yup, illegal narcotics are job-creators and revenue producers par excellence.

Many argue that drugs should be legalized or at least decriminalized to take the major incentive out of the industry: too much money because trading in illegal substances pushes costs – and profits – through the roof. We can tax the proceeds and disband large segments of our criminal justice system just as well. Critics point to the harm of drug addition, to the addicts, their families and to the productivity in the workforce. Clearly! But would we have that many more addicts than we have today if we legalized and controlled the process, devoted more money to rehabilitation and prevention than wasting so much more cash with current levels of enforcement and incarceration? And exactly what is the impact of decriminalization or legalization on pricing and profits.

In 1996, California voters passed Proposition 215, the Compassionate Use Act, governing the use of medical marijuana. Subsequent legislation has created systems for the growing and dispensing of such marijuana through legal dispensaries. And even though some cities have curtailed the ability of such dispensaries to work within their city limits and notwithstanding the feds persisting on prosecuting federal marijuana laws despite state sanction, the impact on pricing has been dramatic. “Since the mid-1990s, the price of outdoor-grown marijuana has plummeted from more than $5,000 a pound to less than $2,000, and even as low as $800.

“Battered by competition from indoor cultivators around the state and industrial-size operations that have invaded the North Coast counties, many of the small-time pot farmers who created the Emerald Triangle [in northern California, featured above] fear that their way of life of the last 40 years is coming to an end… Their once-quiet communities, with their back-to-nature ethos, are being overrun by outsiders carving massive farms out of the forest. Robberies are commonplace now, and the mountains reverberate with the sounds of chain saws and heavy equipment.” Los Angeles Times, September 29^th.

But the stuff grown outdoors lacks the potency – demanded by the legal dispensaries – of indoor cultivated pot, so most of that outdoor stuff heads for the black market. And still the prices fall. “Now, with the market glutted, people are simply planting ever-larger crops to make up for the drop in price… Longtime residents complain that the newcomers cut down trees, grade hillsides, divert creeks to irrigate multi-thousand-plant crops, use heavy pesticides and rat poisons, and run giant, smog-belching diesel generators to illuminate indoor grows. They blaze around in Dodge monster trucks and Cadillac Escalades and don't contribute to upkeep of the roads or schools.” LA Times. Sounds like what happens in major oil drilling or mining operations… problems, but different problems. At least there is a reduced pressure from the smuggling operations from well-armed Mexican drug cartels who are beginning to see less value in the weed trade.

The solution to excessively cheap drugs that might come from legalization and/or decriminalization is clearly the same solution imposed on alcohol and tobacco: high excise taxes. We do not want cheap mind-numbing narcotics to be free and easy. It should be expensive, and the dispensaries need to be tightly controlled. Legal, controlled and generating tax revenues. Or we can continue to spend mountains of money we do not have to stem the drug trafficking that we have not made the slightest dent in stopping after decades and decades of efforts. Pick one.

I’m Peter Dekom, and sometimes common sense gets lost in the cacophony of slogans and mythology.