The Sinaloa Cartel is borrowing ideas from California's dispensaries
SINALOA - Someone walking around the Mexican city of Culiacán, the capital of Sinaloa state and home turf of the cartel of the same name, could be forgiven for thinking marijuana had been legalized.
Ten years ago, weed was still being sold in dark alleys or delivered by shady dealers in old cars, but Culiacán now has almost as many marijuana dispensaries as Los Angeles, even though an ounce of weed could still land you in jail in Mexico.
Since US states started legalizing marijuana — prompting a decline in Mexican weed being smuggled north — members of the Sinaloa Cartel have been looking for ways to adapt and take back the business that helped their predecessors build globe-spanning operations.
The key to their new business, according to Sinaloa Cartel operatives who spoke with Insider, is marketing.
"We don't want to be associated with the shady drug dealer selling weed in the streets or out of a window. Look at the gringos, they are selling this same product in their beautiful stores. That's what we want for the organization," a Sinaloa Cartel member described by many as a "godfather" and who is in charge of funding the new weed industry, told Insider.
The organization — a term that members prefer over "cartel" — restructured its weed business and began a trial-and-error phase in Culiacán at the direction of Iván Archivaldo Guzmán Salazar, one of Guzmán's sons with his first wife, according to the "godfather."
Ivan and his brothers — known as "Los Chapitos" and members of a larger group of young cartel scions known as "narcojuniors" — have made Culiacán their stronghold and focal point of their efforts to expand into the marijuana business.
"The juniors put a lot of money into this, but more than money they were extremely cautious of the people they relied on," the godfather said.
After El Chapo's extradition to the US in 2017, Iván Archivaldo put together a group of five to six men who had "all of his trust" to serve as "godfathers" for a new marijuana business model.
Their role is to channel funds to a larger group of independent marijuana producers to experiment with strains, seeds, methods, and brands "until the organization finds a brand to compete or even overshadows the weed produced in the US," one of the "godfathers" said.
The Sinaloa Cartel began recruiting young producers who do not identify as members of the organization and have three main characteristics: "their passion for weed, their knowledge of the weed production process, and that have lived in a US state where weed is legal," according to the "godfather."
"My godfather asked me very straight up if I really knew what I was doing. I confessed that I had already started a small greenhouse for my own consumption but that if he were to trust me enough to fund me for a bigger one I could make the best weed in Sinaloa," one of the local producers, who had lived in California, told Insider.
The producer, a 31-year-old man originally from Culiacán, allowed Insider to enter one of his greenhouses, a state-of-the-art indoor operation with over 200 small marijuana plants. The plants were cared for by heat and lights, with security cameras and music running 24/7.
"What we are trying to do is very simple: to produce the best weed in the world. We buy seeds from the US, from Europe and from Canada and then we mix them and experiment with them until we get new strains original to Sinaloa," he said.
After the plants are fully grown, the weed produced in the greenhouse is taken into a different location managed by different people, where they make pre-rolled joints, wax, edibles, and a dozen other products.
The manufacturing place is a large house in a middle-class neighborhood in Culiacán where some five men oversee the operations. Each room has a different process: one for stashing the bags of weed coming from the greenhouses, another to fill the pre-rolls, another to press the weed with heat to produce the wax, and one to package and brand everything.
"The best sellers are the pre-rolled [cigarettes], and we make those by hand. We hired three people to roll joints and we are manufacturing around 1,200 to 1,500 a week," a man in charge of the manufacturing process said.
This manufacturer alone sells over 1,200 pre-rolled weed cigarettes, each for 140 Mexican pesos, or about $7, making around $400,000 a year. The "godfather" said that the organization has at least 20 different manufacturing houses under different brands.
Insider conducted interviews in a house producing "Star Kush," which is probably Culiacán's most well-known brand.
Its logo has an astronaut eating a slice of pizza — the pizza is used by the Sinaloa Cartel to reference "La Chapisa," the people working for "El Chapo" and his sons. The astronaut sits on top of a huge tomato, a reference to Culiacán, which is Mexico's biggest tomato exporter.
The products are sold at about 20 dispensaries scattered around the city and owned by the same "godfathers" funding the operations. Iván Archivaldo Guzmán receives more than 30% of the revenue, according to the sources interviewed by Insider.
"We only have the permit to produce. The organization is giving us their money, their trust, and the green light to make the best product. But we can only sell to one client: the organization. We get a good pay for our job, not in the millions, but enough to live off well, but more than that, the opportunity to develop top-notch weed," one of the producers said.
Mexican lawmakers have yet to fully legalize marijuana, including its production and sale, at the federal level, but El Chapo's sons are looking to get the jump on what could soon be a legal and lucrative business.
"Los Chapitos" ultimately want to build a weed business in Culiacán as big and as flashy as the one in Los Angeles, and like their father, they aren't waiting for when the law says they can do it.
