The Rand Corporation is notorious for its history of pro-drug-war studies. A report of theirs from earlier this year on Proposition 19 was full of dubious claims based on what even they had to admit were just guesses. Once again, with their newest report about marijuana legalization, the Rand Corporation buries the lede from their own study, one which strongly supporters the anti-cartel claims made by marijuana reformers. While not part of the press release, the study, in fact, backs up one of the main arguments of the supporters of marijuana legalization. The study determines legalizing, taxing and regulating marijuana could eliminate all the profits the Mexican drug cartels currently make thanks to cannabis prohibition. From the Rand Study (PDF):

We believe that legalizing marijuana in California would effectively eliminate Mexican DTOs’ revenues from supplying Mexican-grown marijuana to the California market. As we elaborate in this chapter, even with taxes, legally produced marijuana would likely cost no more than would illegal marijuana from Mexico and would cost less than half as much per unit of THC (Kilmer, Caulkins, Pacula, et al., 2010). Thus, the needs of the California market would be supplied by the new legal industry. While, in theory, some DTO employees might choose to work in the legal marijuana industry, they would not be able to generate unusual profits, nor be able to draw on talents that are particular to a criminal organization.

Of course, this is not the story the Rand Corporation wanted to push. Instead, their press release was shaped to encourage the media to write stories with a fairly negative spin on Prop 19.  The study tries to call into question the US government’s statistic
(also cited by supporters of Proposition 19) that marijuana accounts for 60 percent of Mexican drug cartel profits. According to their study, which they admit is full of uncertainty, marijuana sold in the US accounts for only about $2 billion in annual revenue, and about 15 to 26 percent of all revenue for Mexican drug cartels. Not surprisingly, since California is only one of 50 states, legalization of marijuana in California alone would, they project, only cut off a portion of the cartels’ profits from marijuana. This leads to a finding by Rand–which they try to present as damaging to pro-legalization arguments–that the passage of Prop 19 would only eliminate about two to four perent of cartel profits.

Leaving the vagaries of their numbers aside, any supporter of marijuana legalization knows that you won’t fully eliminate the illicit profits from marijuana in this country until it is fully legalized and regulated. No one has been claiming just the passage Prop 19 alone would eliminate all of the Mexican drug cartels’ marijuana profits across the whole country. Prop 19 is just the first big step toward a broader adoption of a more sensible marijuana policy that denies the cartels a huge source of funding.

What is important is that even this Rand study fully backs up the inherent logic of those pushing for marijuana legalization (see page 19). The study shows legalizing and regulating marijuana in one region would effectively shut down the cartels’ lucrative marijuana trade to that location. Whether legalizing and regulating marijuana in this country would take away 60, 50, or only 26 percent of the dangerous Mexican drug cartels’ revenue is impossible to pinpoint, due to the lack of good statistics on illegal products. Whether legalizing marijuana would make the murderous cartels terrorizing Mexico $6 billion a year poorer or a mere $2 billion, I still think it is a very good idea to take the first step toward depriving dangerous criminals of billions of dollars in revenue.