Arizona Marijuana Legalization: Potential Effects on

Analytic Whitepaper

Arizona Marijuana Legalization:

Potential Effects on Illegal Marijuana Trafficking and Mexican Drug Cartel Activities

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27 October 2016

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Arizona Marijuana Legalization: Potential Effects on Illegal Marijuana Trafficking and Mexican Drug Cartel Activities

Purpose This assessment examines some potential effects that the marijuana legalization proposition in Arizona (Proposition 205) may have on Mexican drug cartels’ criminal activities, such as narcotics production and trafficking in the southwest United States and other non-narcotics crimes. The analysis of the external environment can assist law enforcement and policy planners to anticipate possible impacts on neighboring states, from border traffic shifts to evolutions in criminal activities within their regions. While no scenario can be definitively forecasted, the Scenarios Analysis technique does identify multiple ways the situation may evolve, allowing planners “to develop plans to exploit whatever opportunities might arise or avoid whatever risks the future may hold.”i Predication Arizona voters will consider the Arizona Marijuana Legalization Initiative—or Proposition 205—during the 8 November 2016 election. The initiative would formally legalize recreational marijuana use in the state for persons 21 years and older. Though such state legalization contravenes federal law, namely the Anti-Drug Abuse Act of 1988 and the Controlled Substances Act, it nonetheless changes the landscape of narcotics production and distribution, inviting shifts in cartel criminal activity. These shifts may take one or several forms that this assessment will propose. Scope Arizona’s legalization move would doubtlessly have repercussions for federal drug control policy as well as U.S.-Mexican bilateral counternarcotics efforts. AzTex Training and Advisory Group, LLC (AzTex), however, will restrict this paper’s focus to marijuana smuggling in the southwestern United States. While marijuana legalization in Arizona would affect states as far away as the East Coast, its effects are expected to be more significant within the southwestern region. This assessment is limited to smuggling and criminality directly related to it. It will not examine the potential effects on highway safety, juvenile marijuana usage rates or attendant medical issues. Analytical Limitations Statistical data on factors related to marijuana pricing, regulation and taxation are uncertain, incomplete or non-existent due to the clandestine nature of the illicit marijuana production and distribution enterprise. Certain studies have drawn tentative conclusions based on analogous tobacco and alcohol market data, such as a 2010 RAND Drug Policy Research Center study on proposed marijuana legalization in California.ii However, the historical absence of a fully legalized marijuana market limit the confidence level of any predictive conclusions extrapolated from data gathered in other markets (i.e., non-marijuana markets or illicit/gray drug markets).


Recent state legalization of recreational marijuana in Colorado, Washington and Oregon do provide some insights, however, into near-term effects. This assessment is meant to offer several possible scenarios that may result from Arizona’s marijuana legalization. The scenarios are not necessarily mutually exclusive, as two or more may actually occur in parallel, in some cases even reinforcing each other, but this report does offer competing hypotheses where appropriate. However uncertain the outcomes may be from a prediction standpoint, it is nonetheless valuable to employ these scenarios as operational planning assumptions or starting points for policy debates. Outlook Overview This report presents five broad scenarios that may result from Arizona’s legalization initiative, should it pass. Under each of these general scenarios, specific sub-scenarios may materialize. - Scenario 1: The new amendment will draw narcotics traffic into Arizona to serve as a transit point or smuggling corridor.

1a: Narcotics traffic through neighboring states may shift toward Arizona, moving greater volume to route through an Arizona safe haven.

1b: Cartels may re-route drug traffic from Texas, New Mexico and California ports of entry (POEs) to border crossings in Arizona in order to take shorter, safer routes to Colorado (where marijuana has been legalized), particularly through American Indian reservations.

1c: California and Texas could become less of a transit corridor for running marijuana into the rest of the United States, and overall narcotics traffic through California and Texas could decrease. Traffic through New Mexico and Utah, however, might increase as marijuana transits between zones of reduced enforcement in Arizona and Colorado. 1d: The volume of marijuana traffic through California may not appreciably decrease, but the direction of traffic may shift. Eastbound traffic may decline, as marijuana that formerly crossed into California may shift to Arizona border crossings; but marijuana bound for California markets may move west from Arizona, rather than northbound from California’s southern border. Less northbound traffic may manifest through southern California, while shipments enter California farther north from northwestern Arizona. Southern Nevada may experience more traffic along major highways between northwestern Arizona and central California.

- Scenario 2: Legalization will bring the market price down for marijuana, and the cartels’ profit margin will shrink.


- Scenario 3: Market share for Mexican marijuana will shift from Arizona to other states, as Arizona producers can legally grow higher quality marijuana for the state market with virtually no legal risk. - Scenario 4: Arizona may become an exporter of marijuana. 4a: The initiative may encourage Mexican cartels to establish marijuana “grows”

(farming and harvesting operations) within Arizona.

4b: Nearby states may see increased marijuana traffic coming from Arizona.

4c: Converging Mexican and Arizona supply chains may create market friction points, particularly in states contiguous with Arizona (i.e., California, Utah, Nevada, New Mexico).

- Scenario 5: Mexican cartels may expand into new criminal enterprises to diversify their portfolio.


Analysis Scenario 1: The new initiative would draw narcotics traffic into Arizona to serve as a transit point or smuggling corridor. Arizona’s borders with neighboring states lack the robust detection and interdiction apparatus in place along the U.S.-Mexican border. Without U.S. Border Patrol (USBP) or Customs and Border Protection (CBP) elements manning the state line, Arizona could fall prey to the “Puerto Rico Effect”iii and become a distribution hub for marijuana smuggling. Intercepting marijuana outbound from Arizona would fall to ad hoc highway interdiction operations, such as mobile patrols and checkpoints; states surrounding Arizona do not have permanent, physical traffic control points with detection technology, although federal inland ports of entry and checkpoints would still be in place within Arizona, California and New Mexico. Since federal assets are already strained, the bulk of interdiction efforts would fall to the various state police, as is currently the case in highway drug interdiction. Arizona Proposition 205 would restrict marijuana possession over certain amounts and prohibit possession in certain places (for example, in a prison or on primary or secondary school grounds),iv but general search-and-seizure operations targeting marijuana elsewhere would predictably plummet. Part of the rationale behind the initiative is “to better focus law enforcement resources on crimes involving violence and personal property.”v Arizona enforcement efforts would continue to tackle “hard drugs” like methamphetamine, heroin and cocaine, but would lose one of the key tools in developing probable cause: free-air sniffing by drug detection canines. Since drug dogs are currently trained to alert on multiple illicit narcotics, to include marijuana, the dogs become virtually useless for ferreting out illegal “hard drugs” at the exclusion of newly legalized marijuana. The canine can parse out the different scents of various narcotics, but currently alerts in a strictly Boolean fashion—drugs, or no drugs. Arizona must take marijuana out of the training equation. Un-training a dog on marijuana is not feasible; training new ones to alert on non- cannabis drugs will work better, but will take time and money. Until Arizona can train canines to detect non-cannabis narcotics, their utility as a search tool becomes diminished. (A positive alert by a canine under the current training regimen would only give police probable cause to believe drugs are present, but not probably cause to believe illegal drugs [under state law] are present, thereby eliminating probable cause that a crime has been committed or is in progress.) Cartels may employ people legally licensed by the state of Arizona to transport marijuana in bulk, and use them to move hard drugs hidden inside marijuana loads. A driver could present paperwork for a marijuana shipment, and while a canine might detect cocaine, heroin or methamphetamine odors emanating from the load, it would be unable to alert inspectors or officers to the presence of the non-marijuana narcotics. Smugglers have already hidden methamphetamine inside marijuana bundles.vi Counterpoint/Devil’s advocate: While canines will lose their utility in the short term for identifying contraband, Arizona patrol officers will still use behavioral analysis of motorists to establish reasonable suspicion, and may continue to conduct consensual searches as part of highway interdiction to identify traffickers who may be transporting illegal narcotics or unauthorized amounts of marijuana. Arizona law enforcement agencies may actually keep up


the interdiction tempo on highways specifically to prevent Arizona from becoming a smuggler’s corridor. Counterpoint/Devil’s advocate: Colorado’s legalization of marijuana potentially reduced the influx of Mexican marijuana into the state. Laboratory tests indicate that marijuana legally grown in Colorado is more potent than most illicit marijauna (such as that grown in Mexico), having a higher tetrahydrocannabinol (THC) content. This content averages 18.7 percent, with some products containing upwards of 30 percent THC, compared with “traditional” marijuana with less than 10 percent THC.vii Currently, Mexican marijuana farmers report that states legalizing marijuana have undercut the market for Mexican product. Around 2011, Mexican marijuana fetched between 60 and 90 dollars per kilogram; by 2014, the price had dropped to between 30 and 40 dollars.viii Such a scenario may apply in Arizona’s case as well. Sub-Scenario 1a: Narcotics traffic through neighboring states may shift toward Arizona, moving greater volume to route through an Arizona safe haven. (See Figure 1.)

Base Map Source: Google Maps

Figure 1. Highway Trafficking Routes

Sub-Scenario 1b: Cartels may re-route drug traffic from California, New Mexico and Texas ports of entry (POEs) to border crossings in Arizona in order to take shorter, safer routes to Colorado, particularly through American Indian reservations. Indian reservations provide a pipeline directly to the Colorado state line. Though discontinuous, the reservations cover significant stretches of territory in Arizona and New Mexico where tribal sovereignty issues complicate interdiction efforts. State and local police have limited or no jurisdiction within the


reservation confines, leaving the bulk of counterdrug efforts to federal agencies. The Federal Bureau of Investigation, responsible for felony crime investigations in the Navajo Reservation straddling northeastern Arizona and northwestern New Mexico, does not investigate narcotics trafficking, focusing primarily on violent crimes.ix U.S. Border Patrol operations on tribal lands concentrate on the U.S.-Mexico international border to the south, so interdiction efforts in northern Arizona and New Mexico can be thin. This makes trafficking routes through the reservations particularly attractive to smugglers.

Figure 2. Shift in Border Narcotics Traffic Mexican cartels routinely transit the 75-mile, unfortified southern boundary of the Tohono O’odham Indian Reservation, which lies on the border between Arizona and Sonora, Mexico.x U.S. Border Patrol units operating on the reservation face a sophisticated countersurveillance and evasion network. The cartels deploy Mexican nationals in the mountains of the reservation to serve as long-term scouts, equipped with sophisticated optics and communication gear. Native Americans on the reservation provide food, water and other logistical support to the scout encampments. The scouts monitor Border Patrol units and direct smugglers’ movements to slip them past the interdiction net.xi


Figure 3. Potential Smuggling Routes through Reservations

Sub-Scenario 1c: California and Texas could become less of a transit corridor for running marijuana into the rest of the United States, and overall narcotics traffic through California and Texas could decrease. Traffic through New Mexico and Utah, however, might increase as marijuana transits between zones of reduced enforcement in Arizona and Colorado. Should Colorado provide a sufficiently lucrative marijuana transit hub to draw traffic away from Texas, some street gangs that concentrate on narcotics smuggling the Texas might relocate to Colorado to capitalize on the new routes. Counterpoint/Devil’s advocate: The Gulf Cartel and Los Zetas are concentrated along the Rio Grande River Valley in southeast Texas. It would prove logistically infeasible to re-route their marijuana to the west to leverage the Indian reservation pipeline. Los Zetas’ bitter rivalry with the Sinaloa Cartel complicates matters further, as the Sinaloa Cartel controls the border territories west of Texas. Secondly, the Texas Gulf Coast will remain a major ingress avenue for narcotics. Drugs bound for the eastern United States should continue to follow the Interstate 10 and Interstate 20 corridors, rather than taking a lengthy detour west and north through Arizona and Colorado. Atlanta, Georgia serves as a major cartel distribution hub in the southeast, to which the southern highways provide the most direct access. Scenario 2: Legalization will bring the market price down for marijuana, and the cartels’ profit margin will shrink. As Colorado considered legalizing marijuana, the Mexican Institute for Competitiveness (IMCO) estimated the price of legal marijuana in Colorado could be 50 to


75 percent lower than the price of Mexican marijuana.xii The same conclusions could be extrapolated for Arizona. Consumers in Arizona would favor domestic, legal marijuana over that smuggled illegally from Mexico. The cartels would lose market share in the state, with Mexican marijuana dropping to only 16.1 percent of the post-legalization market.xiii The cartels could anticipate a $1.425 billion income loss, a 23.5 percent reduction.xiv Scenario 3: Market share for Mexican marijuana will shift from Arizona to other states. Legally available, locally produced marijuana will reduce the demand in Arizona for Mexican marijuana. Cartels may then steer more product to markets in other states. Counterpoint/Devil’s advocate: Arizona’s legalization would not increase the general demand for Mexican marijuana in nearby states, so if the cartels were to divert additional volume to them, it would only serve to drive the street price down. If anything, Arizona would become a supplier of higher quality, lower-priced marijuana, for which there would be a demand in nearby states, creating an incentive for smugglers to export Arizona-grown cannabis to other states. (See Scenario 4.) Scenario 4: Arizona may become an exporter of marijuana. Marijuana grown in Arizona may flow into other states, supplanting supplies from Mexico. Sub-Scenario 4a: The initiative may encourage Mexican cartels to establish marijuana “grows” (farming and harvesting operations) within Arizona. Out-of-state marijuana wholesalers set up grow operations in Colorado following the state’s legalization. Colorado drug task force interviews disclosed residents of Idaho, Oklahoma, Texas, New Mexico and Florida reportedly established grow operations in Colorado to farm marijuana for export back to their respective states; one identified out-of-state grow operator was from Mexico.xv The Sinaloa Cartel has already established illicit marijuana grows in the United States as a way to reduce transportation expenses (including cross-border expenses and losses). If the intrastate transportation climate is sufficiently permissive to entice cartels to set up marijuana harvesting operations in Arizona, they will most likely remain illicit grows rather than licensed operations. The undeclared grows would stay clandestine to evade excise and income taxes. With their profits already down from the lower market price induced by state legalization in Colorado, Washington, Oregon, and now Arizona, cartels would place a premium on further reducing production costs. Overhead costs normally born by legitimate businesses—regulation compliance, licensing, taxes, wage and benefits minimums stipulated by labor laws—would only further hurt the cartels’ profit margin.xvi Mexican cartel harvesting operations would be akin to moonshine operations. Furthermore, if Arizona’s roadways become a domestic smuggling corridor, the cartels may establish additional illicit grows in the neighboring states of Nevada and Utah, which offer a favorable climate for marijuana and ready access to Colorado’s transportation network for further distribution. Sub-Scenario 4b: Nearby states may see increased marijuana traffic coming from Arizona. The end-user market in nearby states might shift demand from Mexican marijuana to lower-priced product grown in Arizona. Evidence of this phenomenon emerged in Texas following


Colorado’s legalizationxvii and officials in Kansas, Nebraska and Oklahoma attributed marked rises in marijuana traffic through their states to Colorado’s legalization.xviii In fact, Nebraska and Oklahoma sued the State of Colorado, claiming Colorado’s legalization unduly strained their states’ enforcement resources.xix

Source: El Paso Intelligence Center, National Seizure System, citied in Rocky Mountain HIDTA Report, 2014xx

Figure 4. Intended Destination States for Marijuana Originating from Colorado – 2013 (Total Reported Incidents per State)

The El Paso Intelligence Center (EPIC) analyzed seizure data of marijuana originating from Colorado, comparing yearly averages from the period 2005 to 2008 with the period 2009-2013 (with 2013 being the first year of legalized recreational marijuana). The yearly average number of seizures increased fourfold from 52 during the first period (2005-2008) to 251 in the second (2009-2013), while the average annual weight seized rose by a third from 2,763 pounds a year during the first period to an average of 3,690 pounds per year during the second.xxi


Source: El Paso Intelligence Center, National Seizure System, citied in Rocky Mountain HIDTA Report, 2014xxii

Figure 5. Reported Interdiction Seizures of Marijuana Originating from Colorado

Source: El Paso Intelligence Center, National Seizure System, citied in Rocky Mountain HIDTA Report, 2014xxiii

Figure 6. Average Annual Weight from Reported Interdiction Seizures of Marijuana Originating from Colorado


Sub-Scenario 4c: Converging Mexican and Arizona supply chains may create market friction points, particularly in states contiguous with Arizona. As Mexican marijuana continues to feed destination markets in southwestern states, domestic marijuana will likely spill over from Arizona into overlapping markets, especially if Arizonan marijuana is priced lower and has higher potency. This could incite turf wars in those localities as criminal elements (normally street gangs at the retail distribution end) compete for market share. Gangs retailing Mexican product may enforce protectionist rackets to keep distributors of Arizona marijuana at bay. Such competition could lead to street violence as dealers settle their disputes by extrajudicial means. Counterpoint/Devil’s advocate: While neighboring states may experience an uptick in marijuana market-related conflict, Arizona itself might actually see an overall reduction in street crime following legalization. Following Washington’s legalization of recreational marijuana, the state enjoyed a 40-year low in crime. Violent crime dropped 10 percent statewide, and the murder rate in Washington fell 13 percent. These statistics only show correlation, and a cause-and-effect relationship cannot be established, but they do indicate marijuana legalization did not contribute to a rise in crime as some might have predicted.xxiv Moreover, while violent crime decreased, other crimes did not increase, but remained consistent.xxv Crime rates in Colorado cities showed no significant change following legalization, and legalization in Oregon showed a similar absence of noticeable effects.xxvi (Note: While the state’s overall crime rates may have shown little change, specific Colorado municipalities did report crime rate increases. A 2016 Smart Approaches to Marijuana (SAM) report asserts Denver drug crime increased 12.5 percent, motor vehicle theft rose 26.3 percent, and homicides rose 74.2 percent—part of an overall crime increase of 4.3 percent—in 2015 compared to 2014.)xxvii Scenario 5: Mexican cartels may expand into new criminal enterprises to diversify their portfolio. A reduction in profit margins from marijuana may force cartels to rely on other criminal activities to remain economically viable. Los Zetas currently engage in a wide variety of criminal ventures, including music and video piracy, human smuggling and trafficking, petroleum theft, extortion and racketeering, kidnapping for ransom and automobile theft. The Sinaloa Cartel, which traditionally focuses its efforts on narcotics and human smuggling, may have to diversify its criminal portfolio with other activities. It is important to note the Sinaloa Cartel controls the smuggling territory along the southern U.S. border from the Pacific to just east of El Paso, Texas. Counterpoint/Devil’s advocate: The Sinaloa Cartel, as ruthlessly violent as it is, has characterized itself as the “good cartel” in its messaging to the Mexican people, insisting that it restricts its violence to narco circles. The cartel claims it does not engage in crimes against ordinary citizens, like kidnapping or extortion, as its rivals Los Zetas do. The accuracy of these claims is disputable, but the narrative does impose certain restraints on the cartel’s overt activities as long as it hopes to curry favor with citizens and public officials and maintain its current operational latitude. The Sinaloa Cartel supplies a large cannabis market outside of North America, and exports more methamphetamine, heroin and cocaine than the other Mexican drug trafficking organizations. Its diverse customer base and broad narcotics portfolio may mitigate the effects of any changes in the U.S. marijuana market, so it may not have to venture into other criminal enterprises that victimize the average Mexican.


Summation Arizona’s possible legalization of marijuana invites speculation as to the potential effects on Mexican drug cartel trafficking activities. It opens the door to several different scenarios that could impact neighboring states. Some scenarios complement each other, while others may be mutually exclusive. In any event, AzTex has considered the relative merits and likelihood of each, with an eye toward ultimate effects on trafficking activity impacting the southwestern United States.


APPENDIX

Indicators and Data Points that Would Suggest Development of Each Scenario Observable signs may suggest when a particular scenario may be developing. Officials can use these indicators to gauge the increasing or decreasing likelihood of said scenarios and fine-tune operational, resource and policy planning. - Scenario 1: The new initiative will draw narcotics traffic into Arizona to serve as a transit point or smuggling corridor.

1a: Narcotics traffic through neighboring states may shift toward Arizona, moving greater volume to route through an Arizona safe haven. Indicator: Higher number of marijuana interdictions and seizures, or rising volume of seized marijuana from said interdictions, on highways running into and out of Arizona; northbound arteries in California, and westbound roadways through middle Utah, may see fewer interdictions

1b: Cartels may re-route drug traffic from California, New Mexico and Texas ports of entry (POEs) to border crossings in Arizona in order to take shorter, safer routes to Colorado, particularly through American Indian reservations.

Indicator: Reduced number of marijuana interdictions and seizures, or dropping volume of seized marijuana from said interdictions, at California, New Mexico and Texas POEs (primarily in west Texas, as the Sinaloa Cartel has the best access to corridors west of Texas)

Indicator: Increased number of marijuana interdictions and seizures, or rising volume of seized marijuana from said interdictions, crossing into or out of Indian Reservations

Indicator: Increase in observed motor vehicle traffic crossing into or out of Indian Reservations, particularly commercial carriers, small trucks and rental cars

1c: Texas and California could become less of a transit corridor for running marijuana into the rest of the United States, and overall narcotics traffic through Texas and California could decrease. (Note: Utah’s position between Arizona and Colorado may facilitate increased traffic through the state as marijuana transits between the two safe haven states. New Mexico would serve as a similar conduit. Additionally, New Mexico’s location immediately east of Arizona—situated between Arizona and the southeastern part of the country--and the number of Indian reservations in the state, may draw continued marijuana flow out of Arizona.)

Indicator: Reduced number of marijuana interdictions and seizures, or dropping volume


of seized marijuana from said interdictions, on Texas and California highways - Scenario 2: Legalization will bring the market price down for marijuana, and the cartels’ profit margin will shrink.

Indicator: Street price reduction in marijuana markets of states neighboring Arizona (e.g., California, Nevada, Utah, New Mexico)

Indicator: Increased number of incidents in which marijuana traffickers evade capture by law enforcement; fewer abandoned loads Indicator: Increase in number of marijuana rip-offs (“drug rips”) by competing criminal elements Indicator: Higer revenues from or observable level of activity in other criminal activities (human trafficking and smuggling, oil theft, product counterfeiting, kidnapping, extortion, etc.) Indicator: Shift in type of narcotics trafficked into the region from Mexico (i.e., rise in heroin, methamphetamine and cocaine traffic with attendant reduction in marijuana movement)

- Scenario 3: Market share for Mexican marijuana will shift from Arizona to neighboring states.

Indicator: Higher volume of marijuana sales in adjacent states’ markets Indicator: Increase in the number of Arizona-licensed vehicles interdicted out of state while transporting marijuana

- Scenario 4: Arizona may become an exporter of marijuana.

Indicator: Increased number of marijuana interdictions and seizures, on highways trending west, north and east from Arizona 4a: The initiative will encourage Mexican cartels to establish marijuana “grows” (farming and harvesting operations) within Arizona.

Indicator: Increased number of marijuana grows in Arizona, particularly unregistered (illegal) grows Indicator: Increase in Arizona real estate property purchases by Mexican nationals (citizens) or companies linked to Mexican cartels, as well as increase in leases of larger facilities such as warehouses


Indicator: Migration of Hispanic street gangs from other states to Arizona 4b: California may see marijuana traffic coming west from Arizona, a shift from the traditional eastbound flow.

Indicator: Reduced number of marijuana interdictions and seizures, or dropping volume of seized marijuana from said interdictions, on Nevada or Arizona highways coming east from California

4c: Converging Mexican and Arizona supply chains may create market friction points, particularly in states neighboring Arizona.

Indicator: Increased violence between known marijuana retail elements and street gangs

involved in marijuana sales and distribution

Indicator: Increase in number of marijuana rip-offs (“drug rips”) by competing marijuana retail elements

Indicator: Localized glut of marijuana supply Indicator: Marijuana retailer reportedly switching to new suppliers, especially suppliers not connected to Mexican cartels Indicator: Migration of Hispanic street gangs from other states to Arizona, with attendant signs of “muscling out” resident gangs (hostile takeovers)

- Scenario 5: Mexican cartels may expand into new criminal enterprises to diversify their portfolio.

Indicator: Observed shift in types of Mexican narcotics trafficked or sold in states near Arizona

Indicator: Higher revenues from or observable level of activity in other criminal activities (human trafficking and smuggling, oil theft, product counterfeiting, kidnapping, extortion, etc.)


i Richards J. Heuer, Jr. and Randolph H. Pearson, Structured Analytic Techniques for Intelligence Analysis, Washington, DC: CQ Press (SAGE), 2011, p. 120. ii Beau Kilmer, Jonathan P. Caulkins, Rosalie Liccardo Pacula, Robert J. MacCoun and Peter H. Reuter, “Altered State? Assessing How Marijuana Legalization in California Could Influence Consumption and Public Budgets,” Santa Monica, CA: RAND Corporation, 2010. iii The island of Puerto Rico serves as a concentrated entry point for narcotics smuggled to the United States from the Caribbean. Because Puerto Rico is a U.S. territory, any drugs successfully smuggled onto its shores can be brought into the continental U.S. via domestic transportation without being subject to Customs controls. iv Amending Title 36, Arizona Revised Statutes, Section 3, Chapter 28.2 Regulation and Taxation of Marijuana Act, 36-2852, A, 5-6. v Ibid., Section 2C. vi Author’s professional observation and experience. Smugglers are paid according to the contraband they transport, with harder drugs posing higher risks to a smuggler in the form of a longer prison sentence if caught, or harsher repercussions from the supplier (cartel) if the load is lost or dumped. By concealing harder narcotics within marijuana bundles, the originator cheats the smuggler by paying him the rate for what the smuggler believes is only marijuana. vii Bill Briggs, “Colorado Marijuana Study Finds Legal Weed Contains Potent THC Levels,” NBCNews.com, 23 March 2015, http://www.nbcnews.com/storyline/legal-pot/legal-weed-surprisingly-strong-dirty-tests-find-n327811, accessed 27 October 2016. viii “John Burnett, “Legal Pot In The U.S. May Be Undercutting Mexican Marijuana,” All Things Considered, NPR.org, 1 December 2014, http://www.npr.org/sections/parallels/2014/12/01/367802425/legal-pot-in-the-u-s-may-be-undercutting-mexican-marijuana, accessed 27 October 2016. ix Region II Narcotics Enforcement Task Force (Farmington, New Mexico), Ruidoso, NM, 6 November 2012. (Personal conversation.) x John Dougherty, “One Nation Under Fire,” High Country News, 19 February 2007, http://www.hcn.org/issues/340/16834, accessed 27 October 2016; author’s professional observation and experience. xi Task Force 2, Tucson Resident Office, Drug Enforcement Administration, Tucson, AZ, 13 November 2012. (Telephonic conversation.) xii Alejandro Hope and Eduardo Clark, “Si los vecinos legalizan: reporte técnico [If the Neighbors Legalize: Technical Report],” Instituto Mexicano para la Competatividad A.C. (Asociacón Civil), October 2012, p. 10. xiii Ibid., p. 12. xiv Ibid., p. 13. xv “The Legalization of Marijuana in Colorado: The Impact,” Volume 2/August 2014, Rocky Mountain High Intensity Drug Trafficking Area, p. 109. xvi As a counterpoint, the RAND study suggests that legal harvesting operations might actually enjoy reduced labor costs “because employers will not have to pay a risk premium to employees for participating in an illegal activity.” Also, grow operations can attain an economy of scale previously unavailable pre-legalization, and can use “labor-saving automation.” (Kilmer et al., RAND, p. 19.) xvii A knowledgeable source of information indicated in 2013 that marijuana produced in Colorado was gaining market share, because there was no need to smuggle it over the border like Mexican marijuana. Colorado marijuana is also of higher “pharmaceutical” quality than Mexican marijuana because it is properly fertilized and irrigated, and it doesn’t face the threat of herbicide contamination from eradication efforts by the authorities. (Counterpoint: Laboratory tests of legally grown Colorado marijuana disclosed high chemical and fungal contamination levels. See Bill Briggs, “Colorado Marijuana Study Finds Legal Weed Contains Potent THC Levels,” NBC News, NBCNews.com, 23 March 2015, http://www.nbcnews.com/storyline/legal-pot/legal-weed-surprisingly-strong-dirty-tests-find-n327811, accessed 27 October 2016.) Additionally, Texas Highway Patrol-Amarillo reported a combined 2,678 pounds of marijuana seized during 2013; the marijuana originated from California, Colorado (where it was legalized) and Washington (where it was also legalized). (Dan Freedman, “Colorado pot makes inroads in Texas,” The Houston Chronicle, 25 January 2014, www://ww.houstoncrhonicle.com/news/article/Colorado-pot- makes-inroads-in-Texas-5175806.php, accessed January 26, 2014, cited in “The Legalization of Marijuana in Colorado: The Impact,” Volume 2/August 2014, Rocky Mountain High Intensity Drug Trafficking Area, p. 109.)


xviii Andy Koen, “Colorado a source state for black market marijuana,” KOAA/Channel 5-Colorado Springs, CO, 29 July 2013, http://www.koaa.com/news/colorado-is-a- source-state-for-black-market-marijuana/, accessed 30 July 2013; David Hendee, “Crossing the line: Colorado pot trade is smoking Nebraska Panhandle budgets,” The World-Herald, 2 March 2014, http://www.omaha.com/article/20140302/NEWS/140309769/1707, accessed 3 March 2014; Sari Horwitz, “Marijuana trafficking on the rise in states near Colorado,” The Washington Post, 30 April 2014, http://www.washingtonpost.com/world/national- security/dea-chief-says-marijuana-trafficking-spiking-in-states-near- colorado/2014/04/30/d34b5a1e-d08a-11e3-937f-d3026234b51c_story.html, accessed 2 May 2014, cited in Rocky Mountain HIDTA 2014, pp. 108-109; Sari Horwitz, “DEA chief says marijuana-trafficking spiking in states near Colorado,” The Washington Post, 30 April 2014, https://www.washingtonpost.com/world/national-security/dea-chief-says-marijuana-trafficking-spiking-in-states-near-colorado/2014/04/30/d34b5a1e-d08a-11e3-937f-d3026234b51c_story.html, accessed 2 October 2016, cited in Rocky Mountain HIDTA 2014, pp. 108-109. xix Hunter Schwarz, “Two states have sued Colorado for legalizing marijuana, but it doesn’t look like any more will join,” The Washington Post, 8 January 2015, https://www.washingtonpost.com/blogs/govbeat/wp/2015/01/08/two-states-have-sued-colorado-for-legalizing-marijuana-but-it-doesnt-look-like-any-more-will-join/, accessed 30 September 2016. xx Rocky Mountain HIDTA, 2014, p. 93. xxi El Paso Intelligence Center, National Seizure System, 2005 – 2013, cited in Rocky Mountain HIDTA, 2014, p. 90. xxii Rocky Mountain HIDTA, 2014, p. 91. xxiii Ibid., p. 92. xxiv Connor Swanberg, “One Year Later, Here Are the Effects Legalizing Marijuana Has Had in Washington State,” Independent Journal Review, n.d., http://ijr.com/2015/07/361976-many-effects-legalizing-marijuana-washington-state/, accessed 2 October 2016. xxv Drug Policy Alliance, “Marijuana Legalization in Washington State: One-Year Status Report,” 6 July 2015, http://www.drugpolicy.org/news/2015/07/marijuana-legalization-washington-state-one-year-status-report, accessed 2 October 2016. xxvi Angela Dills, Sietse Goffard, and Jeffrey Miron, “Dose of Reality: The Effect of State Marijuana Legalizations,” Policy Analysis, 16 September 2016/Number 799, CATO Institute, pp. 14-16, http://object.cato.org/sites/cato.org/files/pubs/pdf/pa799.pdf, accessed 2 October 2016. xxvii Smart Approaches to Marijuana (SAM), “Lessons After Three Years of Marijuana Legalization,” Short Report, 17 February 2016, p. 3, https://learnaboutsam.org/wp-content/uploads/2016/02/SAM-report-on-CO-and-WA-issued-17-February-2016.pdf, accessed 2 October 2016.

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