Study: Legalizing Pot In Calif. Won't Hurt Cartels

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On Tuesday, California voters will decide whether to legalize marijuana in the state. Supporters of Proposition 19 say legalization will undercut the profits made by Mexican drug cartels and eliminate the need for violent crimes. But a recent study by the RAND Corp. finds the overall hit to the cartels could be minimal.

Beau Kilmer, the lead author of the study and co-director of the RAND Drug Policy Research Center, tells NPR's Guy Raz that if California legalizes marijuana, the price of marijuana could drop by at least 80 percent.

"You are getting rid of the risks," he says. When you buy drugs, "part of what you are doing is compensating the drug dealer for the risk of arrest. That goes away with full legalization."

But, Kilmer says, marijuana sales probably only account for 15 to 26 percent of the cartels' total drug export revenue and the cartels will lose only the California market. He estimates drug export revenues will be reduced only by 2 to 4 percent.

"These drug-trafficking organizations have portfolios," he says. "They're trafficking in marijuana, cocaine, heroine, methamphetamines, sometimes in human smuggling."

If quality marijuana is smuggled to other states, however, it could have an important effect: Drug cartels may decide not to export marijuana to the U.S. anymore. Then, Kilmer says, they could lose between 13 and 23 percent of drug export revenues.

A lot of what the cartels do will depend on the local jurisdictions, he says.

In addition to allowing anyone 21 years old or older to possess an ounce of marijuana, Proposition 19 would give local jurisdictions the discretion to make decisions about production, distribution and taxation. How high the jurisdictions would set tax rates is unknown.

"One of the things we raise in the report is if the tax rate is set too high, it will still leave an opportunity for the black market," Kilmer says. "One could even imagine a race to the bottom, as different jurisdictions lower their tax rates as a way of attracting business."

Even if Proposition 19 dies at the polls, Kilmer says, the issue will remain alive.

"There's a good chance that legislation will be reintroduced in California. … And we also know that there are discussions about putting this on the ballot in other states," he says. "This will be an issue that we will wrestling with for years to come."



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