Shannon K. O'Neil

Latin America's Moment

O'Neil analyzes developments in Latin America and U.S. relations in the region.

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What Colorado and Washington’s Vote to Legalize Marijuana means for Latin America

by Shannon K. O'Neil
November 8, 2012

Medical marijuana is shown in a jar at The Joint Cooperative in Seattle Medical marijuana is shown in a jar at The Joint Cooperative in Seattle (Cliff DesPeaux/Courtesy Reuters).

As Americans went to the polls to elect their president yesterday, voters in Colorado and Washington chose to legalize marijuana (by referendum). Not only does this create conflicting state and federal laws, but it also directly challenges the United States’ war on drugs.

These initiatives, Colorado’s Amendment 64 and Washington’s Initiative 502, directly conflict with the federal Controlled Substances Act, which classifies marijuana as a Schedule 1 drug (along with heroin and LSD)—deemed to have “a high potential for abuse and no accepted medical use.” In 2010 Attorney General Eric Holder announced he would “vigorously enforce” federal laws if marijuana was legalized in California (it wasn’t). Although no official statement on Washington and Colorado has been released, the White House’s website maintains that “the Obama Administration has consistently reiterated its firm opposition to any form of drug legalization.”

If these legalizations stand, it would mean big changes for the U.S. marijuana market. According to a 2010 RAND report, prices would drop dramatically. Consumption would also likely increase—the report estimates that for every 10 percent decrease in price, the number of consumers would rise by 3 percent.

Legalization would also have repercussions for U.S. foreign policy, and especially for U.S.-Mexico relations. A recent Instituto Mexicano para la Competitividad A.C. (IMCO) report by Alejandro Hope and Eduardo Clark estimates that legalization in each state would reduce cartels’ profits by 20 to 30 percent. This revenue drop would change the business models for many organized crime groups, especially those who rely more heavily on marijuana (such as the Sinaloa cartel). But these shifts don’t necessarily portend a decline in violence, especially if the marijuana business is replaced by stepped up robbery, kidnapping, and extortion.

Even if the Colorado and Washington legalizations are delayed and/or ultimately struck down, they may change the conversation surrounding the international drug-control regime. The sitting presidents of Mexico, Colombia, and Guatemala, along with many past presidents of Latin American countries have strongly questioned the current approach to drugs, and have asked for an international evaluation and studies through the OAS and the UN. If a groundswell in the United States does the same (at least for marijuana), the political pressure could perhaps spur the federal government to rethink its approach.

Post a Comment 4 Comments

  • Posted by Kris Despot

    The statement is false that “the report estimates that for every 10 percent decrease in price, the number of consumers would rise by 3 percent.”
    The Rand Report says the demand curve is unpredictable.
    But other sources say only about 10-15% of people have addictive personalities. So 15% would be the upper limit, if marijuana was addictive. (It probably isn’t addictive.) And MJ would draw consumers from other drugs, such as alcohol and opiates, which are more harmful.
    But legal hemp would compete with DuPont fibers, petroleum based fuel oils, gasoline, cotton, wood pulp, and anti-depressants. That’s where the real economic opposition to legal hemp comes from.

  • Posted by Marten

    First of all, I am surprised that there seems to be no reaction at all to this article after soon two days post-publishing.
    I hope that this comment might spur some reaction from Ms. Shannon, the author- or CFR- and not only other readers.
    My reaction will consist of three concrete questions:
    1. Is it correct to (federally) class Marijuana in the same category as Heroin?
    2. In response to the Obama Administration’s comment, are Phillip Morris, Pfizer, Jack Daniels (etc.) not legally selling drugs?
    3. Is it not clearly advantageous to reduce the income (and thereby operative extent) of large, extremely violent, criminal drug cartels?

  • Posted by nathan riley

    Theories that hold that the reduction in the price of marijuana will cause increase in use do not stand up to comparative analysis or even thoughtful concern. The Netherlands has consistently reported lower use than the U.S. where it is cheap (you can buy a single joint in a Cafe and there is less concern about age of first use). The individuals who smoke in Holland like it, and that sets serious limits on its use. After all many people who try it become sleepy and incoherent, and they use different substances or even exercise for mood transformation. Marijuana will cause problems, it isl a human activity and problems accompany our behavior. What differentiates Holland from us is the voices that would resort to jail and criminal charges are muted. It is how the U.S. responds to drug use that is the serious problem.

  • Posted by Jared W Jarvi

    This could have considerable revenue potential for Washington State servicing adults whom choose this option over alcohol. Another relative point is Washington state has had growers from Mexico come into our forests so there has been no need for crossing from Mexico into the US for quite a while, also we have the Canadian presence as well whom are already planning border town trips to spend money on green tourist products. I think this is a posative trend for adults if they legally choose and a more peaceful way to redirect enforcement dollars to where else it may be needed.

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