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Cocaine
Cocaine is the most lucrative of these illegal drugs. The United Nations estimates that sales of the drug net $88 billion a year in the retail market alone. U.S. Southern Command says that between 1,250 and 1,500 metric tons of cocaine are produced in the region each year. Most of it is produced in Colombia, where processing labs were established in cities and rural areas beginning in the 1970s.
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At the time, the raw material for this cocaine came from Peru and Bolivia, where indigenous peoples had been harvesting and processing coca for centuries. These groups chew the leaves or use it for tea, and Bolivia legally allows a certain amount of production to satisfy this market.
In the 1990s, coca production shifted to Colombia, and larger, well-armed groups began battling for control of the source material, which financed their wars against each and against the state. Now it appears that coca production is shifting south again.
Cultivating the coca is only the first step in a complicated process that requires numerous inputs, such as gasoline and sulfuric acid, to turn the leaf into cocaine hydrochloride (HCl) powder. The coca leaf is usually partially processed on the cultivators' land. The farmer then sells the coca paste or the coca leaves to the traffickers or a middleman. The United Nations estimates that the coca farmer makes about 1.5 percent of the total retail value earned from cocaine sales in the United States. In 2008, that represented $1.1 billion.
The middleman or traffickers take the paste to an HCl laboratory. Most cocaine labs are still located in Colombia, although there have been an increasing number of reports about their proliferation in Peru, Bolivia, Ecuador and Venezuela. These laboratories are sophisticated and dangerous operations. They require specialized personnel, such as trained chemists, and often armed protection. The best of these labs can produce several tons of cocaine a month, and their mere presence signals that a large organization is at work. Some drug trafficking organizations enter the market at this juncture but many stay away, preferring to pay a higher price to buy into a shipment at a later stage.
The difficult business of moving cocaine requires the participation of many, which has led to the creation of numerous “cartels” over the years. These “cartels” are more like loose federations than disciplined, hierarchical structures, which helps explain the constantly shifting nature of their organizations. Most shipments of cocaine involve numerous parts of these federations. While the largest federations were once Colombian, now it appears they are Mexican. The UN estimates that two-thirds of the cocaine that left the Andean region for the United States in 2008 passed through the hands of Mexican cartels.
Mixed into these deals are the transporters. They move the HCl from the labs to the embarkation point where the cartel, or another set of transport groups, takes control of the drugs. They move the product by sea, air or land, or a combination of all three. Go-fast boats, fishing vessels, single-engine aircraft, semi-submersibles and human “mules” can all participate in a single shipment. These transporters use their existing infrastructure, such as their own transport companies to camouflage the cocaine. They buy their way past authorities or simply play the odds, especially along crowded highways in places like Central America and Mexico, where the increasingly liberalized and open borders created by free trade agreements have made traffickers' work easier.
Where the Mexican cartels take control of the drugs depends on each group's reach, and the load in question. Some operate in Colombia, Peru and possibly Bolivia, buying the HCl wholesale from the source. Others pick up the cocaine en route, often in Central America. Others receive it in Mexico. Once in Mexico the product is moved by land, either using commercial trucks, individual vehicles, human mules or tunnels dug under the border, specifically to move drugs (and humans) into the United States.
Cocaine is also increasingly shipped to Europe, a burgeoning market where the price of cocaine on the street can be double that in the United States. The key embarkation point appears to be Venezuela. The UN estimates that over 50 percent of the drug that departs the Americas by water leaves from Venezuela -- most of this is en route to Europe. Drugs heading for Europe also leave from the Caribbean, Argentina and Brazil, by boat or commercial aircraft. These cargoes enter through Spain, Portugal in the south, or the Netherlands and Belgium in the north. Many traffickers also use West Africa as a depot and staging area to get their drugs into Europe. As in Central America, where poor countries and corrupt, ill-equipped government forces cannot handle the richer, better armed and more sophisticated cartels, West African countries such as Guinea-Bissau are struggling to deal with the influx of organized crime.
Heroin
Like cocaine, heroin is derived from a plant, in this case what is known as the opium poppy. The opiate from the plant is the source for morphine, codeine and heroin, among others. The plant grows in high altitude, mountainous areas. Organized criminal groups have been deeply involved in the trade of opium and its derivatives for at least two centuries. The highly addictive nature of the drugs, and the relative ease with which the criminal groups can move them, make it a lucrative venture. Like cocaine, heroin revenue, which the UN estimates to be $55 billion yearly, also finances insurgencies worldwide.
This helps explain why 85 percent of the world’s heroin comes from Afghanistan. This country supplies the world’s largest consumer markets, Western Europe and Russia. Nonetheless, there is a sizeable heroin market in the U.S. -- an estimated 20 metric tons a year, according to the UN. The supply comes principally from poppy fields in Mexico, Guatemala and Colombia. Mexico, in particular, has seen poppy production rise dramatically in recent years. The U.S. government estimates that Mexico's cultivation of opium poppy rose from 6,000 hectares to 15,000 hectares between from 2008 to 2009, making it the third largest producer in the world after Afghanistan and Myanmar. Part of this rise may be due to a decrease in availability on the Colombian side and increased vertical integration on the Mexican side. The U.S. government estimates that poppy cultivation in Colombia dropped as much as 50 percent between 2000 and 2006, and has remained steady ever since. Indeed, there are indications that Guatemala has overtaken Colombia as the second largest poppy producer in the region. Part of this may be due to Mexican cartels’ attempts to use the fertile area in the San Marcos region, along the Mexican border, as a new headquarters for the cultivation of poppy and its processing into heroin.
Heroin is a highly profitable business in Mexico as organized criminal gangs take advantage of sparsely populated areas and corruptible officials, and the proximity to the U.S. market. Mexican organizations such as the Sinaloa Cartel have established numerous heroin processing labs near the largest areas of production, namely the Western Sierra mountains in the Sinaloa, Durango and Chihuahua states. Often referred to as the “Golden Triangle,” these three states are home to upwards of 80 percent of the poppy production in the hemisphere. They move these drugs through the same corridors as the cocaine traffic: via commercial trucks, private vehicles and human mules, as well as through man-made tunnels under the U.S.-Mexican border.
In the U.S., these organizations have established distribution networks in the major cities, and often reaching into the countryside. These networks include mini-distribution teams in Los Angeles, Chicago and other major distribution centers. The heroin often passes through Houston and Los Angeles. Money for the drugs then goes back through those main hubs and is smuggled back into Mexico, where it is laundered in legitimate businesses and the black market.
Methamphetamines
The synthetic drug industry in the Americas is relatively new but growing exponentially. What was once a U.S.-based operation that relied on local precursors and “shake and bake” laboratories has become a sophisticated international business that includes securing supplies from as far away as Asia, developing the methamphetamine in large, elaborate labs in Mexico and Central America, and transporting the drugs across the U.S. border via tunnels, or using commercial vehicles or human mules. Indeed, authorities in the United States now believe that Mexico supplies 70 percent of the methamphetamine consumed in the United States.
The shift of the methamphetamine industry from the U.S. to Mesoamerica owes much to improved U.S. law enforcement and new laws that more tightly regulate the import and sale of precursor chemicals used to make the drug, namely ephedrine and pseudoephedrine -- ingredients common in cough medicines and other over-the-counter drugs. The meth traffickers in the U.S. have adapted, creating small scale, “one-pot” labs. But the Mexican cartels have created “super-labs” -- giant meth factories that produce huge quantities of the drug. The largest labs are in the Mexican states of Jalisco and Michoacan, but Mexican authorities have also raided large labs in other states, like Durango and Sinaloa. Mexican traffickers have also circumvented the laws limiting the availability of ephedrine and pseudoephedrine by using alternative precursors, such as phenyl-2-propanone, much of it smuggled in from Asia.
Still, most methamphetamine is made using ephedrine and pseudoephedrine. Until two years ago, Mexico’s Central American neighbors, principally Guatemala and Honduras, supplied the raw material for meth production. These two countries, as well as Nicaragua, Costa Rica, Belize, Peru and Argentina, have since enacted laws limiting imports of these precursors. But traffickers are finding new ways to get them to the mega-labs in Mexico and the smaller labs in Central and South America. The routes often mirror those of the illegal drugs leaving the region. The principal supplier of ephedrine and pseudoephedrine is India. Its precursors mostly go directly to Mexico, though some pass through Central America. Others go through East Africa, then Central America, often on their way to Mexico’s super-labs.
Marijuana
Marijuana remains the most widely used and widely trafficked drug by volume in the Americas, and the world. Production figures are difficult to determine because countries tend to measure production in different ways, and there is an increasing amount of indoor production. The region’s top producer, the United States, measures by the number of plants. The second largest producer, Mexico, measures by hectare. The United States also appears to be one of the top indoor producers. The only indoor production found outside of the United States in the region was in Argentina. The difficulty in measuring the cannabis cultivation worldwide was evident in the 2010 United Nations’ World Drug Report, in which the organization's estimates ranged between 200,000 and 641,800 hectares.
The greatest concentration of marijuana production in the Americas is from the northwestern Sierras in Mexico up through the northwestern United States. Mexican production is concentrated in nine states: Sinaloa, Nayarit, Jalisco, Michoacan, Guerrero, Oaxaca, Chihuahua, Sonora, and Durango. Guerrero, Nayarit, and Michoacan are the traditional production areas, but U.S. intelligence reports say that large Mexican organizations have shifted production to central and northern Mexican states of Sonora, Sinaloa and Durango in recent years to avoid increasing eradication efforts by the Mexican government and to get closer to the main consumption market, the United States. Mexican drug trafficking organizations also operate large, outdoor fields in western United States, most notably in California, but increasingly in more northerly states such as Oregon and Washington. The Mexican trafficking organizations are also increasingly building connections to groups east of the Mississippi River.
In South America, the largest marijuana producers appear to be Bolivia and Paraguay. Colombia is also a major producer. In addition to shipping supplies to the United States and Europe, these countries supply a growing South American market.
The potency of marijuana has also increased in recent years, giving the traffickers greater returns on fewer hectares. This includes Mexican traffickers who have developed sophisticated techniques such as using greenhouse seedlings, planting the seedlings before late April, separating the male from the female seedlings before pollination, and using fertilizer high in nitrogen.
Given the lack of solid information on production, there are differing arguments as to how much money there is in the marijuana business. A recent paper on cannabis in the United States said domestic production in the U.S. alone was worth an estimated $35 billion in 2006. And some say that marijuana represents the Mexican drug trafficking organizations' largest source of income.
Resources
- "National Methamphetamine Threat Assessment 2010," U.S. Department of Justice. (pdf)
- “World Drug Report 2010,” United Nations Office on Drugs and Crime. (pdf)
- “International Narcotics Control Strategy Report, Volume I, 2010,” United States Department of State.
- “Domestic Cannabis Cultivation Assessment 2009,” United States National Drug Intelligence Center.
