With U.S. competition hurting its marijuana business, Mexico warms a little to legalization

Reporting from Mexico City —  For decades, marijuana flowed in one direction across the U.S.-Mexico border: north.

These days, drug enforcement agents regularly seize specialty strains of retail-quality cannabis grown in the United States being smuggled south.

Widespread legalization in the U.S. is killing Mexico’s marijuana business, and cartel leaders know it. They are increasingly abandoning the crop that was once was their bread and butter and looking elsewhere for profits, producing and exporting drugs including heroin and fentanyl and banking on extortion schemes and fuel theft.

So when Mexico’s tourism secretary this week boldly declared his hopes that Mexico will legalize marijuana for recreational use in an effort to reduce growing violence across the nation, some balked at the notion that marijuana was driving the bloodshed.

“Avocados are a bigger industry than marijuana,” said security expert Alejandro Hope. “And the number of homicides connected to marijuana are very small.”

“It is naive to believe that legalizing marijuana will reduce crime rates,” tweeted Margarita Zavala, a presidential candidate.

Still, that a Cabinet member was willing to advocate such a policy marks a dramatic shift from a time when Washington dictated a hard-line drug policy across Latin America. Mexican leaders have increasingly been taking more liberal stances on marijuana, in part to stay in step with other countries in the region and in part because they are at a loss about how to stem Mexico’s rising violence, much of which is centered around the drug trade.

The legalization debate comes amid Mexico’s bloodiest wave of violence yet. There were more than 29,000 homicide victims in 2017, more than in any year since the government began releasing homicide records two decades earlier.

The drug trade generates between $6 billion and $8 billion a year for Mexico, according to the RAND Drug Policy Research Center, which estimates that 15% to 26% of that comes from marijuana. Advocates of legalization say it would allow law enforcement officers to focus on more important work. Few in Mexico have touted legalizing harder drugs.

The tourism secretary, Enrique de la Madrid, told reporters at a tourism conference Thursday that he thinks “it is absurd that we have not taken the step” toward legalization of cannabis. He said legalization should start first in Quintana Roo and Baja California Sur, states home to the resorts of Cancun and Los Cabos, both of which have seen a dramatic increase in homicides in recent years.

“I am convinced that we must discuss it as part of the solution to violence and insecurity in Mexico,” De la Madrid said later in a tweet, which also clarified that his views on the subject were his own, and not an official government position.

But De la Madrid, a member of the ruling Institutional Revolutionary Party, is one of a growing number of Mexican leaders who have called for pot legalization.

In 2016, President Enrique Peña Nieto proposed a bill that would allow Mexicans to carry up to an ounce of marijuana, arguing that Mexico and the U.S. should not pursue divergent policies on the drug.

The bill stalled in Congress, but lawmakers did approve another measure that allows the use of medical marijuana in some cases.

Legalization has been the trend across the Americas.

In the U.S., marijuana is legal in some form in a majority of states and will soon be permitted for recreational use in eight. Cannabis is already legally sold for recreational use in Uruguay and will be later this year in Canada. Several Latin American countries, including Chile, Brazil, Peru, Costa Rica and Colombia, have changed laws to make marijuana more available for either medical or recreational use.

Full legalization faces an uphill battle in Mexico, where a majority of voters and the Catholic Church are opposed to the idea. A 2015 poll conducted by the newspaper El Universal found that two-thirds of Mexicans oppose decriminalizing cannabis, although 63% said they backed a debate on the issue.

Amid talk of legalization, all signs suggest Mexico’s marijuana market is on the decline.

Seizures of marijuana by U.S. Customs and Border Patrol have been falling for a decade. Last year, 861,231 pounds of marijuana were seized at U.S. ports of entry, down from 2.4 million pounds in 2013 and 4.3 million pounds in 2009.

Mexico has also been eradicating fewer marijuana fields over the last decade. In 2006, federal forces wiped out 74,531 acres of marijuana crops, according to the Mexican government. In 2016, a total of 13,537 acres were destroyed.

Increasingly, growers are moving on to other crops, such as poppies, which can be found flowering across violence-plagued states such as Michoacan and Guerrero. Drug traffickers are also switching to synthetic drugs such as fentanyl, which is easier to traffic than marijuana because it is much more potent, with just a few milligrams amounting to a fatal dose.

In the coastal resort city of Ensenada, 85 miles south of San Diego, Mexican police recently seized a drug shipment that included 100 pounds of fentanyl, 914 pounds of crystal methamphetamine, 88 pounds of cocaine and 18 pounds of heroin. There was no marijuana in the shipment.

“Cartels know their ability to compete in the U.S. marijuana market is diminishing,” said John M. Walsh, director for drug policy at the think tank Washington Office on Latin America. “U.S. consumers have better options.”

Marijuana’s profitability has been greatly reduced, with farmers receiving much less than they used to for cultivating the plant. At the same time, Mexico remains one of the world’s top producers of the drug, Walsh said.

He said he supports legalization in Mexico. Even if it wouldn’t end Mexico’s violence, it could put a dent in it, he said.

“The role that cannabis plays in terms of contributing to violence is fuzzy,” Walsh said. “But illegal markets facilitate violence. Every little bit helps.”

A key question surrounding the legalization debate is whether Mexico would face opposition from the U.S., which over the last 50 years has invested billions of dollars in anti-drug programs aimed at reducing the flow of drugs from Latin America.

Inside the U.S., there is little consistency on marijuana regulation. While the legal pot trade is now a billion-dollar business and one of the country’s fastest growing industries, the federal government still classifies cannabis as a Schedule I drug, the same classification given heroin.

[email protected]

Twitter: @katelinthicum

Cecilia Sanchez in The Times’ Mexico City bureau contributed to this report.