The United States is best known as the world’s largest market for drugs and, of course, as the main promoter, at home and abroad, of prohibition-based drug control policy. But the United States is also a major producer of illicit drugs, especially marijuana and amphetamines, and a major money launderer. Indeed, if one accepts that, once laundered, drug dollars function in an economy like any others, and that the largest portion, by far, of the retail value of illicit drugs sold here remains here, the United States arguably makes more than any other nation from the drug industry—even after the huge U.S. outlay for drug control is taken into account. (U.S. drug controllers, however, also subtract a long list of dubiously calculated “costs” they attribute to drug abuse; these easily swamp drug revenues.)[1] In any case, as in the rest of the world, parts of the poorest regions of the United States, including Appalachia and the south, have become dependent on drug income for their economic survival.
- In 1998—the last year studied—people in the United States spent $66 billion on illicit drugs, including $39 billion on cocaine, $12 billion on heroin, $11 billion on marijuana, and $2.2 billion on methamphetamines, according to the White House Office on Drug Control Policy.[2]
Although all of the cocaine and heroin consumed in the United States comes from foreign sources, U.S. producers supply much of the marijuana and amphetamines, along with changing amounts of other illicit drugs like LSD and Ecstasy (MDMA).
At least a third of the marijuana consumed in the United States is also grown here. Until the late 1970s, U.S. consumers generally disdained domestic marijuana as inferior to imported pot, but U.S.-funded crackdowns on foreign suppliers provided incentives to improve U.S. production. California and Hawaii soon sprouted large farms producing high-potency “sensimilla.”[3] After forced eradication operations in both states, growers began moving production to scattered, remote sites and indoors. In 1998, the DEA reports, the leading states for indoor production were California, Florida, Oregon, Kentucky and—remarkably—Alaska. Kentucky and Tennessee have joined California and Hawaii on the list of the biggest outdoor producers.
According to researchers John Gettman and Paul Armentano, “Marijuana ranked fourth out of all United States cash crops in 1997, amassing a greater value to farmers than tobacco, wheat, or cotton. In several states —Alabama, California, Connecticut, Hawaii, Kentucky, Maine, Rhode Island, Tennessee, Virginia, and West Virginia—marijuana stands as the largest revenue producing crop. Marijuana ranks as one of the top five cash crops in 29 others. Nationally, marijuana growers reaped an estimated $15.1 billion on the wholesale market. Only corn, soybeans, and hay rank as more profitable cash crops.”[4]
Methamphetamine production is also widely scattered throughout the United States. In 2001, 46 states reported activity related to clandestine meth manufacture; production is especially concentrated in California, the midwest and the southwest. The DEA reports that U.S. law enforcers busted almost 4,600 illegal meth labs during 2000. The majority of these were “mom-and-pop” operations, run by “independent cooks” who buy the needed ingredients—including over-the-counter cold remedies—from local retail stores.[5]
It has often been noted that drug dealing is one of the few kinds of well-paid employment available to young people in the poorest urban areas of the United States.[6] Less well-reported is the fact that many of the regions of most concentrated U.S. drug production are also among the nation’s poorest: In parts of the Appalachian states of Kentucky, Tennessee, and West Virginia—designated a “High Intensity Drug Trafficking Area” by U.S.officials in 1998—marijuana has “become a substantial component of the local economy, surpassing even tobacco as the largest cash crop,” because, as the officials note, “in this tri-state area financial development is limited, poverty is rampant, and jobs are few.”And, according to geographer Joseph Leeper, in Humboldt County, an early center of California marijuana production, “unemployment rates are usually 2 to 6% higher than those of either California or [the] United States.”[7]
Better-off regions have also become key parts of the U.S. drug economy, though their role is more hidden. “Narcotics cash,” The New York Times reported in 1982, was one of three reasons that Florida had become U.S. “banking’s hottest market.” At the time, Florida was the main U.S. port of entry for cocaine, and officials estimated that “drugs with a wholesale value of as much as $80 billion” a year were being imported into southern Florida. Some $6 billion in “surplus cash” was appearing on Federal Reserve books for the region, which officials took as a rough measure of the amount of drug money being “laundered” locally.[8] Since then, U.S. drug imports—and the drug economy as a whole—have become much more widely dispersed: U.S. officials have added Houston, Los Angeles and New York to the list of important international money laundering centers.
ABOUT THE AUTHOR
JoAnn Kawell is the editor of the NACLA Report
NOTES
1.See ONDCP, http://www.whitehousedrugpolicy.gov/publications/pdf/economic_costs98.pdf
2. ONDCP, “What America’s Users Spend on Illegal Drugs, 1988-1998,” December, 2000, http://www.whitehousedrugpolicy.gov/publications/drugfact/american_users... Note that the ONDCP’s “retail value” of marijuana consumed in the U.S. is significantly lower than the wholesale value of the U.S. marijuana crop calculated by two researchers for the previous year. See note 4 below.
3. See “Chasing Smoke: Hawaii’s 24-year war on pot,” a four-part series in The Honolulu Advertiser, http://www.honoluluadvertiser.com/specials/pot/index.htmlDan Hamburg, “The War Against Marijuana,” San Jose Mercury-News, May 10, 2000.
4. “1998 Marijuana Crop Report: An Evaluation of Marijuana Production, Value, and Eradication Efforts in the United States,” NORML, October, 1998. http://www.norml.org/index.cfm?Group_ID=4444#gettman For Gettman’s calculation of the value of marijuana production in the Americas as a whole see web version of this issue at http://www.nacla.org
5. DEA, “Drug Trafficking in the U.S.” p. 9.
6. Terry Williams, The Cocaine Kids, (Reading, MA: Addison-Wesley, 1989) Philippe Bourgois, In Search of Respect: Selling Crack in El Barrio (Cambridge: Cambridge University Press, 1996).
7. Joseph Leeper, “Humboldt County: Its Role in the Emerald Triangle,” The California Geographer, Vol. XXX, 1990.
8. ”A Guide to Banking’s Hottest Market,” The New York Times, May 23, 1982. Christian Science Monitor, “Cocaine trade profits spotlighted,” October 25, 1982.
