Scott Stewart expert in terrorism and security issues, is also the VP of Tactical Analysis, at Stratfor world renown analysis website. Mr. Stewart came up with an in-depth look at the Sinaloa Cartel direct influence on the streets of Northamerica.
On its own, it was an impressive haul, but in the wider picture, it was just a drop in the bucket: On Sept. 26 at a checkpoint in Sarita, Texas, U.S. Border Patrol agents seized 64 kilograms (142 pounds) of methamphetamine with a street value of $4.5 million. A methamphetamine seizure of this size is not surprising or unusual, especially in this location, given that criminal cartels manufacture the drug in Mexico before smuggling it into the United States. Indeed, 97 percent of the methamphetamine seized by Customs and Border Protection (CBP) occurs along the U.S.-Mexican border, according to the Drug Enforcement Administration’s 2018 National Drug Threat Assessment. So what exactly is driving this record-setting production of methamphetamine? For me, two main factors are responsible: economics and cartel dynamics. Ultimately, a combination of high-quality drugs, record-low prices and the massive competition among ever-splintering cartels is flooding the hungry U.S. market with a deadly drug.The Big Picture
Mexico’s proximity and good transport links to the United States, the world’s largest illicit drug market, have provided a boon to criminal groups who meet the demand for high-quality and inexpensive drugs.See The Importance of Mexico
High Quality, Low Price
In 2012, law enforcement agents seized 8.460 kilograms of methamphetamine headed into the United States from Mexico; in 2017, that figure ballooned to 30,081 kilograms, a more than 250 percent increase — but just a fraction of the flow that traverses the border every year. In late August, Mexican authorities raided four drug labs in Mexico’s Sinaloa state. One had allegedly been producing three tons of methamphetamine a week — meaning that over just 11 weeks, it could have equaled the total of all CBP seizures made in 2017. This from just one lab belonging to just one cartel (Mexican authorities have taken down some 20 meth labs in Sinaloa state alone in 2019). There are plenty more cartels producing many more tons of methamphetamine every month. Ultimately, nobody knows precisely how much Mexican methamphetamine makes it onto U.S. streets, but estimates place the amount intercepted at less than 10 percent.
According to the DEA’s National Drug Threat Assessment, laboratory analyses of domestic methamphetamine purchases from January 2012 through March 2017 indicate the purity of the drug increased from 87.9 to 93.2 percent, while the price per gram decreased from $81 to $70. It appears as if prices will continue to decline as low-cost, high-purity meth flows into the United States from Mexico. It is no accident that U.S. authorities are raiding fewer and fewer domestic methamphetamine labs. After all, with abundant quantities of cheap, high-quality meth flowing in from Mexico, why would users bother making their own or buying lesser-quality U.S.-made drugs?
Unsurprisingly, the abundance of the drug is costing more lives in the United States. According to figures from the Center for Disease Control and Prevention, 10,333 people died from overdoses involving psychostimulant drugs in the United States in 2017 — a huge increase from 1,378 reported just a decade previously. Breaking the numbers down further, around 85 to 90 percent of the psychostimulant drug deaths in 2017 result from methamphetamine, according to the CDC.
With abundant quantities of cheap, high-quality meth flowing in from Mexico, why would U.S. users bother making their own or buying lesser-quality U.S.-made drugs?
Capitalizing on a Hungry Market
Like other drugs, U.S. demand is the primary factor driving Mexican cartels to produce methamphetamine. The Amezcua Contreras brothers, who ran the Sinaloa cartel-aligned Colima cartel, originally specialized in methamphetamine, and by the early 1990s, they were producing it in large quantities. The scale of Mexican cartels’ methamphetamine production, however, increased dramatically in the mid-2000s after the United States succeeded in shutting down super labs in California’s Central Valley and passing laws restricting access to the chemicals needed in its manufacture. Mexican criminal organizations, especially several Sinaloa cartel affiliates, recognized the opportunity and dramatically expanded their methamphetamine production to meet the continuing U.S. demand. More than that, these groups improved the quality and purity of the drug, producing variants far stronger than those made north of the border.
The Colima cartel was not the only one producing methamphetamine for the group of organizations known as the Sinaloa cartel or the Sinaloa federation. Guadalajara-based Sinaloa cartel lieutenant Ignacio “El Nacho” Coronel Villarreal became known as the “King of Crystal” due to the huge quantities of methamphetamine his organization produced. Unlike cocaine, which Mexican cartels had to purchase from South American producers, they could manufacture methamphetamine themselves from readily available, dual-use chemicals. This meant that their profit margin on a kilogram of methamphetamine was much higher than it was for a kilogram of cocaine. As a bonus, they could keep the lion’s share of the profits rather than share them with South American producers and Central American middlemen.
And then there’s the ease of making methamphetamine: so long as one has access to the precursor chemicals, it’s possible to produce the drug anytime, anywhere. Indeed, authorities have discovered methamphetamine labs in residential neighborhoods, remote mountain hollows and modern industrial parks; there is also no growing season and no need for a particular climate or large fields of exposed plants. Producing methamphetamine is also far less labor-intensive than either heroin or cocaine, which requires people to harvest the opium gum or coca leaves.
So long as one has access to the precursor chemicals, it’s possible to produce methamphetamine anytime, anywhere.
By the 2010s, U.S. officials were conducting multiton seizures of methamphetamine, highlighting the degree to which Mexican cartels had ramped up production. This rapidly expanding trade became a game-changer for the cartels that adopted methamphetamine early, as these large new profit pools gave them a significant competitive business advantage. It’s no surprise that the two largest and most powerful cartels in Mexico today, the Sinaloa cartel and the Jalisco New Generation Cartel (CJNG), became involved in the methamphetamine trade early — even as they continued to move cocaine, heroin and other drugs. Groups that had strong connections with Chinese chemical providers and who could facilitate and control the flow of such chemicals through Mexican ports, for instance, also developed an advantage over their competitors.
In the end, the methamphetamine for sale on American streets has become better, cheaper and more widely available. Wholesale buyers, such as street or motorcycle gangs, pass off some of their savings to their retail buyers while maintaining their profit margins. And given the high purity and high competition, there is little incentive to adulterate the drug in the pursuit of greater profit since users will move to other suppliers who provide better-quality drugs.
But there’s another factor that has resulted in more methamphetamine flowing into the United States from Mexico: cartel dynamics. The CJNG split from the Sinaloa cartel over the belief that Joaquin “El Chapo” Guzman Loera was involved in the death of Coronel in July 2010 because of his jealousy over Coronel’s growing power stemming from the booming methamphetamine trade. Whether the motivating factor was true or not, Coronel’s followers left Sinaloa and created the CJNG. This process of fragmentation, which we’ve long referred to as the “Balkanization” of the Mexican cartels, has resulted in many more independent groups than there were two or three decades ago. This means that there are more independent organizations attempting to profit from the drug trade in general and methamphetamine in particular. Today, nearly every cartel organization in Mexico is either manufacturing methamphetamine or buying and smuggling the drug to sell at a profit in the United States.
With such a huge supply of top-notch methamphetamine, Mexican suppliers are also looking for new markets. In June, CBP officers discovered 1,728 kilograms of Mexican methamphetamine at the Port of Long Beach concealed in a shipment of speakers destined for Australia. This set a record for the largest single seizure of methamphetamine inside the United States but was just the largest of several more that demonstrated how Mexican cartels are attempting to smuggle their product into the lucrative drug markets of Australia and New Zealand.
Looking ahead, there is no end in sight to the Balkanization of the cartels, as the Sinaloa cartel and the CJNG, for instance, will likely continue to fracture. That, ultimately, will sustain the heavy competition among Mexican methamphetamine suppliers, meaning the quality of the drug will remain as high as its prices are low. Even hopes that a restriction on the supply of precursor chemicals could halt the influx of methamphetamine are unlikely to come to fruition, as producers can always switch to alternative precursors or processes to synthesize the drug. In the end, where there is demand, there will be supply: So long as there is a vast market for methamphetamine, the drug will continue to be a fixture on U.S. streets.