The War on Drugs [Cocaine]

The producers & the early processors are not really living the Pablo Escobar lifestyle. The dealers on the other end, aren't either so as it keeps doubling & doubling & we hear these billions of dollars changing hands & then you wonder, who's making all that money?

The Mexican Cartel & the large criminal organisations that are managing the central part of the value chain.
These are part of the value chain, where in order to able to say that you can reliably deliver large amounts of a product that is illegal, that means that you have to control the territory through which its gonna be moving & the only way when you do it, if it's a Black Market, is through violence.

The Sinoloa Cartel, one of the largest & most dangerous drug cartels in the world responsible for smuggling hundreds of tons of cocaine into the United States (after the fall of Escobar & the closure of the Caribbean route to Miami, the Mexican Cartels took over all transport to the United States & beyond. It is estimated that cartels profit an average of $24 billion a year, just from United States alone. And when it comes to the cartels, Sinaloa is the gold standard. It controls as much as 60% of Mexico's drug trade, with annual earnings reaching $3 billion. The product move north within Mexico, usually in small shipments, stopping at safe houses along the way, constituting a nearly indestructible path of Coke into the United States).

So how does Cocaine grow in value?
Based on the amount of risk that exists at each chunk & you see the profits kind of reflect that.
If you think about the chain, it's kind of like an hourglass, where it's very diversified at the top, where you're producing but from then on, it's very very centralized.
It becomes concentrated where you have to transport things in bulk & you have to be able to protect that.
And when you shift to the transportation where the risk is much higher, that's where the first kind of very big jump in profitability happens.

In Columbia, it cost $2,500 a kilo & in Manzanillo, its cost between $12,000 & $14,000 & then in Sinaloa, it's $17,000 & $26,000 in California.
From Sinaloa, it goes all by sea up to San Felipe to Baja. There, it is divided up & transported to the United States, little by little, by cars.

Every group has their preferred ways of smuggling & they're always looking for new avenues, to find a way to help get a higher percentage of their product into the country.
It's that access into the United States & from the United States, you have the Interstate Highway System. You can take it to wherever you want from that point.
So you get to a point where the Cocaine arrives in the United States & you describe this kind of opening of the hourglass & many different paths to distribution within the United States that last mile to the party.

You have a number of people who are kind of very committed to their habit of using cocaine.
They recognise that this is a Black Market & so therefore they recognise that it's a risky behaviour & that it requires a risky behaviour to serve the market.
& so, they're happy to pay large premiums to have the products delivered to them.

The Murders, the Kidnappings, the Brutal Violence is gonna continue as long as the Mexican Cartels are as powerful as they are & they're going to stay this powerful so long as they're servicing a demand that no legal company can compete with & that demand comes from us, from the United States.
Fridays & Saturdays, people are at the parties, they're at the clubs, they're ordering coke on their cell phones, buying blow on the street corner.
And what they don't know or refuse to acknowledge is that, ultimately, they're funding a chain of human suffering with that choice.
This is a Global Multibillion Dollar Business built on the backs of the poor.

In my experience, you can't doing the same thing over & over again when you keep seeing the data to show that it doesn't work.
America is 10 & a half billion dollar into the war on drugs in Columbia alone. Half a million Columbians have died & last year, more yayo shipped than ever before.
Legalisation might seem pretty extreme to most Americans but as long as the demand continues to climb & the prices remain astronomically high because of no legal competition, I can't help but wonder whether legalisation & regulation is the only real option.
& prohibition is just an illusion to make us all feel good. An illusion that's costing millions of dollars and thousands & thousands of lives.

Posted in: Drugs