The Economic Consequences of Marijuana Legalization on the Illegal Drug Economy: Lessons for Mexico

Abstract

This paper proposes a general approach to certain relevant economic consequences that brought about different processes of decriminalization and/or legalization of marijuana on the economic system of illicit drugs. For this, the economic consequences of the prohibition are described, and how this policy favors the emergence of an economic system based on the accumulation of capital with illegal drugs. Subsequently, 3 international experiences of legalization and decriminalization of cannabis are addressed, together with the current legal status of cannabis in Mexico, and some relevant economic changes that brought about the decriminalization or legalization of marijuana on the economic system of illicit drugs are reflected, such as the configurations of the production, supply and demand of illegal marijuana, coupled with the reduction in the profit of criminal organizations, the control of this type of drug, and the fragmentation of the illegal drug market due to the irruption of the legal cannabis market. By way of conclusion, we reflect on the scope and limitations of the international experiences addressed, and compare them with the tolerant drug policy carried out under the guidelines of Dr. Leopoldo Salazar Viniegra, during the six-year presidential term of General Lázaro. Cardenas del Rio.