Mexican farmers and drug cartels preparing for legal Marijuana Market in 2023

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Mexican farmers and drug cartels preparing for legal Marijuana Market in 2023

Marijuana legalization has stalled in Mexico, but farmers and cartels are still making big plans to profit off a new market.

Badiraguato - Every day at 5 a.m. Margarita, a 51-year-old farmer, jumps out of bed and lights a candle to St. Judas, a saint believed to listen to lost or almost impossible causes.

Only after that, Margarita steps out to her front yard and looks over her marijuana plants, which are covered with a camouflage-shaded cloth.

"Every morning I pray to San Judas that the government don't destroy my plantation. It's been such an effort to put it back up after it got destroyed the last time," she told Insider. Mexican military personnel destroyed Margarita's weed crops during an operation in 2019.

Margarita doesn't work for any of Mexico's cartels or criminal organizations. She is doing what she has learned from generations of ancestors: Marijuana harvesting has been her family's legacy for more than 100 years.

"I really don't involve myself too much in the rest of the process from the plant. I harvest, pick and trim my plants, and then if someone wants it, fine. If not," she says, "I store it until it sells."

Margarita's product caters to the Mexican market, reaching buyers through independent distributors but also through criminal organizations like the Sinaloa Cartel — the cartel's jailed kingpin, Joaquin "El Chapo" Guzmán, was born in Badiraguato and the region is still the group's home turf.

But all Margarita cares about is that her product is not selling as much as it did five years ago. "The full sacks of weed sometimes stay there in the warehouse for a month or two, and what do I do? How do I sustain myself if I'm not selling?" she said in an interview.

Margarita helps herself with a government assistance program called "Sembrando Vida," which hands out roughly $220 a month to small farmers in states like Sinaloa and neighboring Chihuahua and Durango — a region known as the golden triangle for the intensive cultivation of marijuana and opium poppy there — to encourage local development and discourage drug production.

"I tried to harvest tomato, but it sells even worse than marijuana. The big companies take all the sales, and there is very little what I can offer" in quantity, she said.

At the current price for weed, Margarita gets roughly $25 a kilo. She was expecting to get at least $500 this season for her harvest, but more than half of it hasn't sold.

"It's not a good time for weed. People are asking for a different weed, the one that comes from the gabacho, but we don't have those seeds," Margarita said, using a term referring to the US.

Like other independent growers, Margarita remains barred from formal sales in Mexico, where efforts to legalize marijuana have stalled. Negotiations over such a measure began in 2019, when the Congress approved a law to legalize the use, possession, and planting of marijuana. Four years later, it is still stuck in Mexico's Senate.

In 2021, the Senate passed a bill legalizing recreational use of marijuana, but lawmakers in the lower house held up the measure while they tried to raise the amount that consumers could carry in public higher than the proposed limit of 28 grams.

While weed remains generally illegal in Mexico, farmers and criminal groups are not waiting to position themselves in what could soon be a legal market.

"We are not waiting for a law. The Mexican government took too long already and meanwhile other countries keep making profits and our sowers keep struggling," said Andrés Saavedra, a lawyer and the founder of an NGO called Plan de Tetecala, which supports independent weed growers and the decriminalization of cannabis.

"We are now focused on becoming independent and keep growing marihuana for a Mexican market that wants to use the plant in different ways," he said.

Old product, new market

Mexico's move toward marijuana legalization comes after several US states legalized the drug, which appears to have put a dent in cartels' profits.

Prior to the legalization of marijuana for recreational use in Colorado and Washington state in 2012, the Mexican Institute of Competitiveness calculated that such measures could cost Mexican cartels nearly $2.8 billion.

More states legalized the drug in the years that followed, and the amount of weed smuggled into the US from Mexico appears to have declined over that period. In 2013, US authorities seized roughly 1.3 million kilograms of weed at the border, according to the DEA. By 2019, that had fallen to nearly 249,000 kilograms.

Over the past five years, marijuana prices in Mexico have decreased by more than half, prompting criminal groups to produce more dangerous drugs, like fentanyl, to maintain profits and pushing independent farmers to harvest plants like opium to sustain themselves.

The prospect of a legal domestic market has drawn the interest of criminal groups that used to focus on smuggling marijuana north, especially the Sinaloa Cartel, members of which are studying the success of dispensaries in the US.

"What we did was to change the seed. People want a more powerful, better quality weed, and we are putting a lot of money into this industry," a Sinaloa Cartel operative told Insider in a phone interview.

"This is a business that belongs here, to Sinaloa," another Sinaloa Cartel operative who works as a regional manager for marijuana operations in Culiacán, the capital of Sinaloa state, told Insider in a previous interview. "We lost a share of the business, but in no time we will take it back by producing the best weed in the world."

After the arrest of "El Chapo" Guzmán's youngest son, Ovidio Guzmán, in January, the Sinaloa Cartel's weed operations are overseen by two of his brothers: Iván Archivaldo and Jesús Alfredo Guzmán, members of a group known as "Los Chapitos."

The operative and others in the business say the cartel is "very interested" in marijuana legalization. Some believe it is because of Los Chapitos' love for the plant and its supposed benefits. Others think it is purely a business decision.

Margarita, on the other hand, can't afford to grow "premium quality weed," since the seeds are at least 10 times more expensive and equipment like that used in cartel-run grow houses to maintain the plants is also a steep investment.

"I know that if I had that other weed from los gringos, I could be selling twice my price, but it is also very expensive. And I don't know how the señores are going to take it if I go into that business," Margarita said, referring to Americans and to Mexican drug lords, respectively. "I might get in trouble, don't you think?"

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Region: Mexico

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