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Legalizing marijuana in California would not substantially cut cartel revenues, study finds
Date:10/13/2010

Legalizing marijuana in California will not dramatically reduce the drug revenues collected by Mexican drug trafficking organizations from sales to the United States, according to a new RAND Corporation study.

The only scenario where legalization in California could substantially reduce the revenue of the drug trafficking organizations is if high-potency, California-produced marijuana is smuggled to other U.S. states at prices that are lower than those of current Mexican supplies, according to the study from the RAND Drug Policy Research Center. RAND is a nonprofit research organization.

The study calculates that Mexican drug trafficking organizations generate only $1 billion to $2 billion annually from exporting marijuana to the United States and selling it to wholesalers, far below existing estimates by the government and other groups.

The RAND study also finds that the often-cited claim that marijuana accounts for 60 percent of gross drug export revenues of Mexican drug trafficking organizations is not credible. RAND's exploratory analysis on this point suggests that 15 percent to 26 percent is a more credible range. Given that California accounts for about 14 percent of the nation's marijuana use, this suggests that if marijuana legalization in California only influences the California market, it would have a small effect on drug trafficking organizations -- cutting total drug export revenues by perhaps 2 to 4 percent.

However, the impact of legalization on Mexican drug trafficking organizations' bottom line could be magnified if marijuana cultivated in California is smuggled into other states, according to the study. After legalization, if low-cost, high-quality marijuana produced in California dominates the U.S. marijuana market, then the Mexican drug trafficking organizations' revenue from exporting marijuana could decline by more than 65 percent and probably closer to 85 percent. In this scenario, results from th
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Contact: Warren Robak
robak@rand.org
310-451-6913
RAND Corporation
Source:Eurekalert

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