Today's WSJ cites a short piece from Esquire on some of the consequences of marijuana legalization. The "War on Drugs" has been a disaster on many fronts and legalization is the way to go. But partial legalization also has consequences. These were harder to anticipate. Here is the story:
... The heroin epidemic was caused by the legalization of marijuana.
We wanted legal weed, and for the most part, we got it. Four states have legalized it outright, others have decriminalized it, and in many jurisdictions police refuse to enforce the laws that are on the books, creating a de facto street legalization.
Good news, right?
Not for the Sinaloa Cartel, which by the time Colorado passed Amendment 64 in 2012 had become the dominant cartel in Mexico. Weed was a major profit center for them, but suddenly they couldn’t compete against a superior American product that also had drastically lower transportation and security costs.
In a single year, the cartel suffered a 40 percent drop in marijuana sales, representing billions of dollars. Mexican marijuana became an almost worthless product. . . . Once-vast fields in Durango now lie fallow.Partial legalization is the problem. People's capacity to discover (and supply) substitutes is vast. To avoid messes like the one described, go back to principles. Prohibit nothing that has the potential to only harm the individual exercizing his or her free choice.
More good news, right?
Yeah, no. Guzmán and his boys are businessmen. They’re not going to take a forty-point hit and not do something about it. They had to make up those profits somewhere.
Looking at the American drug market as it existed, Guzmán and his partners saw an opportunity. An increasing number of Americans were addicted to prescription opioids such as Oxycontin.
And their addiction was expensive. One capsule of Oxy might sell on the street for thirty dollars, and an addict might need ten hits a day.
Well, s—, they thought. We have some of the best poppy fields in the world. Opium, morphine, Oxy, heroin—they’re basically the same drug, so . . .
The Sinaloa Cartel decided to undercut the pharmaceutical companies. They increased the production of Mexican heroin by almost 70 percent, and also raised the purity level, bringing in Colombian cooks to create “cinnamon” heroin as strong as the East Asian product. They had been selling a product that was about 46 percent pure, now they improved it to 90 percent.
Their third move was classic market economics—they dropped the price. A kilo of heroin went for as much as $200,000 in New York City a few years ago, cost $80,000 in 2013, and now has dropped to around $50,000. More of a better product for less money: You can’t beat it.
At the same time, American drug and law-enforcement officials, concerned about the dramatic surge in overdose deaths from pharmaceutical opioids (165,000 from 1999 to 2014), cracked down on both legal and illegal distribution, opening the door for Mexican heroin, which sold for five to ten bucks a dose. ...
Freedom is inherently attractive and also so practical. But the freedom idea also places a lot off-limits to the state. What would politicians do all day?
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