Is Legal Marijuana Causing the US Heroin Epidemic?

photo by Brett Levin Photography, via Flickr, CC-BY

No. Here’s the statistics that show why.

A recent Esquire article made a claim: “The heroin epidemic was caused by the legalization of marijuana.” The argument occurred in an otherwise interesting article by Don Winslow about Joaquín Guzmán and the Sinaloa cartel. Probably because it sounds transgressive, the claim was elevated to a pull quote, and the assertion is now being echoed around the internet.

The reasoning goes like this. In 2012, Colorado was the first state to legalize recreational marijuana. After that, according to Winslow, the cartel suffered a 40 percent drop in marijuana sales in a single year. So, therefore, the Sinaloa cartel began selling heroin, in order to take advantage of high levels of opioid addiction in the United States. Winslow is pretty clear in his language. “Caused” is the word. Causality is a pretty straightforward claim.

That legal pot might be changing the market for cartel-grown pot is likely. That is, after all, one of the primary rationales of legalization — to replace black market production and sales with a legal market structure. Although US legal pot is certainly competing with Mexican marijuana, and demand for importation seems to be decreasing, that doesn’t mean that legalization is what is causing the decrease the demand for importation. Likewise, saying that the rise of heroin importation is caused by the decline in marijuana importation is equally specious, if there are no facts that exist to support the causality.

We must be able to link the decline of the importation of marijuana due to legal pot, with the increase in importation of heroin, in a causal way.

If newly legal pot is only replacing the supply of domestic illegal pot, the demand for imports would not necessarily change. Or, if newly legal pot appealed to new clientèle that didn’t want to break the law, the entire demand on the market could increase, actually leading to more imports.

To begin with, we should understand something about US pot production. There is currently both legal and illegal pot production in the United States, but whether it is regulated or not, it has something in common.

The reason that US customers are buying domestic marijuana rather than imported is not just because it is legal, or because it is cheaper. It’s better.

In 2014, NPR reported:

“Vinkovetsky says prices for Mexican weed continue to slide because it’s so much weaker. He says American cannabis typically has 10 to 20 percent THC — the ingredient that makes a person high — whereas the THC content of so-called Mexican brickweed is typically 3 to 8 percent.”

The Esquire piece claims that the street value of imported cartel marijuana is $3.50 a gram. Anyone in a legal pot state can tell you that the price of a gram over the counter in a dispensary is $10 a gram. Why pay nearly three times as much for the same amount? Well, anyone who has sampled both products can tell you that. Imported pot is gross. It is compressed, packed in a metal can for weeks, might have produced seeds (a no-no in terms of quality cultivation), and often stinks of fertilizer or pesticide. Domestically grown pot, on the other hand, is prized for its flavor, its fluffy, pretty, moist buds, and even the varietal, which can emphasize different qualities. It isn’t even a competition, really. They are different products. It is like the difference between a freshly pumped espresso and an old can of Yuban. And this has been the case for years, long before marijuana was ever legalized.

US pot is so much better, that the DEA claims the Sinaloa cartel actually started smuggling high-quality US marijuana back into Mexico, where it could be sold at a premium. The DEA is not one to trust with such assertions, especially when they don’t have any facts to back it up with. But it’s an interesting idea.

We need to see that the rise of legal pot actually affects the amount that is imported — not simply that there is competition between the two.

Let’s look at some statistics. Of course, we can’t know exactly how much marijuana is being imported into the US. But we can look at the amount seized as it attempts to come across the border. (Seizure stats for fiscal years 2011, 2012, 2013, 2014, and 2015. I wish there were more years available, but Federal agencies have an annoying habit of changing how they report their statistics — in this case, border sector and fiscal year reporting only began in 2011, as near as I can tell. If you find detailed seizure rates by year for 2010 and earlier, let me know as I would love to look further back.)

The amount of marijuana seized coming across the Southwest border started dropping from an all time high in 2011. But Colorado and Washington, the first two states to legalize recreational use, didn’t vote on their measures until November 2012. And then, the actual regulations to allow legal pot to be grown were not put into place until late 2013. Therefore, a drop in importation as an effect of legal domestic pot would not have shown up until FY 2014.

Sorry my graphs are generally crappy, but hopefully the point is getting across.

There was a drop from 2013 to 2014. That drop continued at the same pace from 2014 to 2015. Meanwhile, Oregon and Alaska, the next two states to legalize, did not vote to do so until November 2014, and their regulations were not in place until late 2015.

It appears that illegal importation was already on the drop before any states had made pot legal. After the first vote, then importation got a slight bump. And then, after two states have introduced legal pot regulation in late 2013, there is a steady drop over two years, before the next two states introduced regulated production. This drop would make sense if domestic legal production was ramping up evenly, replacing improved pot on the market. Colorado production began fairly rapidly at the end of 2013 (the beginning of FY 2014). But Washington state, for example, hadn’t even issued any growing licenses until Spring of 2014 (midway through FY 2014), didn’t begin collecting taxes on actual marijuana produced until June of 2014 (at the end of FY 2014). The first full year of production and sales in that state was 2015. The ramp up in production was not steady, but delayed, then it exploded.

There are no good statistics for the quantity of marijuana legally produced in the United States (all taxes are assessed on sale price). But in 2014, the Colorado State Department of Revenue estimated the yearly demand to be just over 287,000 pounds, and set up their licensing structure accordingly (production licenses are granted in terms of square feet of canopy, again, not a figure easily correlated to weight yield).

This means that the amount of decrease in the marijuana seized during illegal importation between FY 2013 and FY 2014, just about 508,000 pounds, was itself 1.77 times higher than the demand for that year in the only state where marijuana was being produced legally! And if we estimate that the figures for seizures represent only a fraction of the total amount being imported, than we can extrapolate that the decrease in illegal importation is far higher than any new legal production in the United States.

All of which supports the idea that it isn’t legal pot that could be pushing out cartel pot. It could only be US pot in general, legal or illegal.

Importation has always been a drop in the bucket of American marijuana consumption. A 2006 study estimated that the top 10 marijuana-producing states combined crops (all of which was illegal for recreational use at that time) was 16,777,240 pounds. In 2010, California seized more illegal marijuana within the state that was seized at the entire US Mexico border. A 2014 Mother Jones article estimated the national production at 22 million pounds.

Since we don’t know the total amount of marijuana produced for export to the United States, it is impossible to say how that amount compares to the amount produced domestically, legally or illegally. But here’s what we do know. For FY 2014 and FY 2015, seizure amounts in the Southwest border sector decreased, year-over-year, 26% and 25%.

It seems absolutely ludicrous to conclude that the legalization of marijuana in four states, two of which only started production in mid-2015, could be responsible for the cartels cutting their entire importation by one-fourth, each year, starting in 2013.

What, were those four states now supplying marijuana to one-quarter, and then one-half of the country, which squeezed out the demand for imports? It is far more likely that the cartels realized that they were simply in a losing battle for quality, and as US production showed every sign of continuing to increase in both quantity and quality (research and development dollars now pouring into cultivation technology legally) cartels decided to get out while they still could, because homegrown pot was now king.

Legalization was a symbol of the changing import/domestic market dynamic, not a cause.

That tackles the legal marijuana half of the argument. But what about heroin?

It’s fairly well know that prescription painkiller overdoses outnumber the deaths from all other drug overdoses combined, several times over. The total number has been rising steadily since 2000.

What is coming to light more recently is that the number of heroin deaths has also been rapidly increasing. This ramp up began sharply in 2010, and is still rising through the present day. (2010 is two years before any pot was made legal, by the way.)

According to Don Winslow, this is because the Sinaloa cartel started pushing new, highly pure forms of heroin and fentanyl in order to make up for lost revenue from marijuana. Seizure statistics do indeed show a rise in attempted importation of heroin, around the same time that the number of deaths begins increasing significantly.

But, the main bump in this rise happened between FY 2012 and 2013 (a YoY increase of 29%), the same year that marijuana seizures actually increased by 5%! And, when legal production of marijuana finally began in FY 2014, and marijuana import seizures dropped by 26% YoY, then heroin seizures stayed almost flat, increasing only by 3% YoY, and then decreasing in FY 2015. (Apologies for my poor superimposing here, but the point is the curves not the numbers.)

Purple line is heroin seizures, superimposed. Time scale is equivalent.

What Winslow is arguing here seems to make sense, and no doubt has an appearance of truth. Of course the Sinaloa cartel is attempting to make money, and so they are selling heroin to capitalize on addiction rates in the United States. But they are not doing it because they lost money on marijuana that was now legal.

Correlation is not causation, as we all know. And frankly, the correlation here isn’t even that good.

The cartel was no doubt losing money on marijuana, because the United States produces a lot of very good domestic marijuana. And there was a new source of profit for the cartel in heroin via a rising increase in opioid addiction. But these two things are not related. And they didn’t even really happen at the same time. And neither the changing market for marijuana imports nor the changing market for herein imports seems directly related to marijuana legalization.

This is not even how Supply and Demand theory is supposed to work.

Economics is supposed to be about supply and demand. Where there is a demand, a supply rises to fill it. Where the demand drops off, the supply decreases as well. But a lack of demand for one product does not cause an additional supply of another product. Those are two separate markets. Heroin either makes a profit, or it doesn’t. Marijuana either makes a profit, or it doesn’t. If the cartel could make a profit off of both at the same time, it certainly would. A cartel is not limited in the number of illegal activities it can entertain. It simply goes where the money is, at all times. Cocaine used to be the big cartel money maker. In recent years, it too has been dropping off — but not because there is any legal cocaine industry in the US. Does this mean that the lack of a cocaine market “caused” the heroin epidemic? (To be honest, the seizure curves between heroin and cocaine correlate better.)

Purple line is heroin seizures, time scale is equivalent.

And at the same time, meth seizures are skyrocketing. Is this because meth is linked to heroin? Or is this because the meth market is replacing the pot market? Of course not (at least not without any evidence towards those ideas.) Meth seizures are increasing merely because there is now more profit in attempting to import it.

Each drug’s importation is based upon its own economics, and not necessarily tied to the economics of any other drug.

Why is this important?

Why do I give a shit about what Don Winslow says about pot?

I live in a state where pot is legal, and with a ongoing crisis in heroin overdoses and arrests. We tend to think of marijuana legalization as a liberalization that cannot be reversed. But there has been no Supreme Court case. Legal pot is not popular with many people. Other states are nowhere near as close to this as we are. This whole thing could collapse. And this sort of talk about marijuana “causing” heroin epidemics is a new wrinkle on a War on Drugs talking point that has been around for 30 years. Suggesting the fallacy that marijuana legalization is somehow a “gateway” for heroin addiction is ammunition to those who would like to make it illegal again. Something must be done about the heroin epidemic. But looking to legal marijuana as the “cause” is not it.

And although Winslow and many other media figures seem to think that marijuana legalization is just for wealthy white people to get to smoke pot, that is not the case. In Oregon, before legalization, marijuana arrests were increasing. Over 12,000 people were arrested or cited in 2012.

Nationwide, African-Americans were more than 3.7 times to be arrested for pot possession than white people, even though usage rates are similar.

Pot legalization is not only about ending black market drug production. It is about closing down a pipeline into the prison system. When pot was legalized in this state, all of that began to change. Finally, a terrible prohibition that was responsible for shuttling many people (and even more people of color) into the criminal justice system was ended. Legalizing pot is not the end of fighting the racialization of the justice system. And legalization of drugs is not the only avenue to pursue. But it is a start. And making worthless associations between the heroin epidemic and pot legalization threatens to push all of that backwards.

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