California-grown marijuana could eclipse pot illegally imported from Mexico and dominate the U.S. market if voters open the way to commercial sales and large-scale cultivation, according a new Rand Corporation study released yesterday.
“If marijuana can be diverted from legal production in California to other states … then California production could undercut sales of Mexican marijuana throughout much of the United States, cutting (drug trafficking organizations') marijuana export revenues by more than 65 percent and probably by 85 percent or more,” the report states.
Nevertheless, the report found that legalizing marijuana in California will not dramatically reduce profits collected by Mexican drug trafficking groups, in part because pot shipments to the United States only account for 15 to 26 percent of their export revenues.
A previous Rand study estimated that marijuana prices in California could drop by as much as 80 percent if pot is legalized, making it a bargain compared to imports from Mexico, which are already seen as inferior in quality and potency.
The new report offers a host of uncertainties: Will taxes be collected on the marijuana before it’s diverted out of the legal distribution chain? Will law enforcement step up efforts to intercept surging out-of-state shipments?
The study also noted that supporters of Proposition 19 claim the initiative would help curb drug violence, citing a 2006 U.S. government report suggesting that marijuana exports account for 60 percent of all Mexican drug trafficking organization revenue. The government has since retracted the 60 percent figure, the study said.
"No publicly available source verifies or explains the mythical 60 percent figure and subsequent government analyses revealed great uncertainty about the estimate," study co-author Jonathan P. Caulkins of Carnegie Mellon University said in a statement.