How Pot Legalization In The U.S. Hurts Mexico's Illegal Marijuana Industry

Last week, Michele Leonhart, the head of the U.S. Drug Enforcement Administration and a prominent critic of recreational marijuana in Colorado and Washington, made headlines when she suggested that marijuana legalization efforts could create new money-making opportunities for Mexico’s illegal cannabis industry.

However much legal weed costs in Washington and Colorado, “criminal organizations are ready to come in and sell cheaper," she said at a meeting of the House Appropriations Committee in Washington, D.C. on Wednesday.

It was an arresting claim, one that opponents of pot reform are likely to repeat. But Leonhart didn’t provide any evidence to support it, and a recent report from The Washington Post tells a different story.

According to the article, published Sunday, the legalization of marijuana in Washington and Colorado and the relaxation of drug laws in other states have caused wholesale pot prices to plummet so sharply that Mexican farmers are abandoning the crop for a more profitable plant: the opium poppy.

With more and more Americans getting their pot from medical marijuana dispensaries or Colorado’s legal retailers, the wholesale price of marijuana has dropped from $100 to less than $25 per kilogram in just the past five years, the report explains.

“It’s not worth it anymore,” one veteran farmer told the Post, complaining about the economics of marijuana farming. “I wish the Americans would stop with this legalization.”

The rising demand for heroin in the United States has made opium a more attractive option for farmers in Mexico and throughout Central America, the article points out. And at least one Latin American leader has responded by suggesting that opium should be legalized, too.

While Leonhart was criticizing marijuana legalization last Wednesday, President Ott Perez of Guatemala was telling Reuters that his government may start allowing the production of not just marijuana but also opium, a measure aimed at curtailing the power of drug cartels.

As a conservative retired general, Perez is an unlikely champion of drug reform, but unlike Leonhart he argued that legalization will hurt the cartels, not provide them with a new source of income.

According to Perez, a Guatemalan government commission is exploring “the legalization of the poppy plantations on the border with Mexico, so they're controlled and sold for medicinal ends."