U.S. Marijuana Growers Cutting Into Profits of Mexican Traffickers

Stiff competition from thousands of mom-and-pop marijuana farmers in the United States threatens the bottom line for powerful Mexican drug organizations in a way that decades of arrests and seizures have not, according to law enforcement officials and pot growers in the United States and Mexico.

llicit pot production in the United States has been increasing steadily for decades. But recent changes in state laws that allow the use and cultivation of marijuana for medical purposes are giving U.S. growers a competitive advantage, challenging the traditional dominance of the Mexican traffickers, who once made brands such as Acapulco Gold the standard for quality.

Almost all of the marijuana consumed in the multibillion-dollar U.S. market once came from Mexico or Colombia. Now as much as half is produced domestically, often by small-scale operators who painstakingly tend greenhouses and indoor gardens to produce the more potent, and expensive, product that consumers now demand, according to authorities and marijuana dealers on both sides of the border...

Now, to stay competitive, Mexican traffickers are changing their business model to improve their product and streamline delivery. Well-organized Mexican cartels have also moved to increasingly cultivate marijuana on public lands in the United States, according to the National Drug Intelligence Center and local authorities. This strategy gives the Mexicans direct access to U.S. markets, avoids the risk of seizure at the border and reduces transportation costs.

Unlike cocaine, which the traffickers must buy and transport from South America, driving up costs, marijuana has been especially lucrative for the cartels because they control the business all the way from clandestine fields in the Mexican mountains to the wholesale dealers in U.S. cities such as Washington...

Mexico produced 35 million pounds of marijuana last year, according to government estimates. On a hidden hilltop field in Mexico's Sinaloa state, reachable by donkey, a pound of pot might earn a farmer $25. The wholesale price for the same pound in Phoenix is $550, and so the Mexican cartels could be selling $20 billion worth of marijuana in the U.S. market each year...

Led by California, 13 U.S. states now permit some use of marijuana; Maryland is considering such a law. In many cities, marijuana is one of the lowest priorities for police.

To some authorities, the new laws are essentially licenses to grow money. With a $100 investment in enriched soil and nutrients, almost anyone can cultivate a plant that will produce two pounds of marijuana that can sell for $9,000 in hundreds of medical marijuana clubs or on the street, according to growers.

High-end marijuana grown under such special conditions often fetches 10 times the price of poor-quality Mexican pot grown in abandoned cornfields and stored for months in damp conditions that erode its quality further.