Even with legalized marijuana, organized crime isn't going away
Throughout Canadian history, the illegal-drug trade has adapted to myriad attempts by the government to quell the market
By JERRY LANGTON
Saturday, May 26, 2018 Print Edition, Page O4
Author of The Hard Way Out and The Secret Life of Bikers: Inside the Hidden World of Organized Crime any Canadians believe M that the legalization of recreational marijuana use will deal a crippling blow to organized crime. I'd love to be able to say that's true, but I can't.
Neither the marijuana market nor organized crime works the way that most Canadians I have spoken to - including members of the media, politicians and even some cops - believe it does.
The overwhelmingly popular belief is that there are colossal shipments of weed flooding over our borders from other countries, particularly from Latin America.
It's not true, and hasn't been for a very long time. According to the United Nations Office on Drugs and Crime's 2017 World Drug Report, Canada has the world's eighth-biggest illegal marijuana crop - and is a net exporter. In fact, Canada is the leading supplier of illegal marijuana to several countries, including Japan and Australia, and sends a huge amount of weed south of the border.
The growth was, if you'll forgive me, organic. For decades, Canadians who wanted weed had to buy it from a dealer who had received a shipment from California, Hawaii, Mexico, Jamaica or some other warm place. But there were some flaws in that economic plan. Supply was unpredictable, ripoffs and arrests were commonplace and prices were generally at the whim of the importer and dealer.
So, many Canadians started farming weed indoors. It began as a cottage industry, but is now among the country's leading exports.
Another common misconception is that crime organizations in Canada make a significant amount of their revenue through domestic marijuana sales. They don't, and haven't for years. It's simply not a good product for them. An ounce of weed is the size of a small sandwich, has a strong, easily detectable scent and retails for maybe $200. And it's everywhere. But an ounce of cocaine is the size of a Brazil nut and sells for about $2,000. And it's scarce. Besides, if a marijuana buyer doesn't like your product, he or she will often walk away. For more habitforming drugs such as cocaine, methamphetamine, heroin and prescription painkillers, they're more or less a captive clientele.
Canadian organized crime has historically left marijuana trafficking to the lower echelons of crime, concentrating instead on more high-profit products. I don't mean to say organized crime in Canada does not make money off marijuana. The export market is strong. But, domestically, the Mafia and individual members of big biker clubs generally profit by allowing others to grow and sell marijuana in their claimed territory in exchange for kicking a percentage upstairs. Growers and dealers who refuse to play along can expect a visit - usually in the form of a home invasion - that often combines robbery with assault. But that happens to a lot of other businesses, too - such as tattoo shops, leather stores, gyms, bars and restaurants.
Organized crime's revenue stream from the domestic marijuana trade pales compared with more lucrative pursuits. Organized crime started making real money here after opium and several other drugs were declared illegal in 1908. But they really became established after recreational alcohol was prohibited first in Canada and then the United States. They first moved booze north, and then south as the laws changed. With alcohol legal again in both countries, organized crime diversified, running the sex trade, illegal gambling, sports fixing, loan sharking, protection rackets, money laundering, extortion, identity theft, human trafficking, muscle for hire (often for politicians) and many other activities. As marijuana became more popular, it was also a big earner.
But - even at its peak - it was tiny compared with the profit generated by heroin. And that was still much smaller, and almost made redundant, by the towering stacks of cash made by organized crime once they established cocaine pipelines, first from Venezuela, then Colombia and, later, Mexico.
That was followed by a smaller boom in methamphetamine sales. And, they also make big money from steroids and socalled date-rape pills. And guns.
And stolen vehicles. And lots of other sources.
Most illegal drugs have natural declines as the public sees what their effects can be. But some Canadians with short-term memories have created a major uptick in the heroin market of late. And organized crime is also experiencing another boom - this time in the sale of prescription drugs. It's kind of a perfect crime. They are not that hard to acquire, can be sold for huge profits, cause customers to become dependent and it's pretty difficult for law enforcement to stop. And, other than untimely deaths, there's very little public or media stigma associated with their use.
To illustrate how quickly organized crime adapts in Canada, think back to the early 1990s. The federal government enacted a huge tax increase on cigarettes.
Within a year, more than a third of all cigarettes smoked in Canada were estimated to be smuggled in from the United States (in Quebec, it was more like two-thirds), all orchestrated by organized crime. In 1994, the tax hike was repealed as then-prime minister Jean Chrétien told the House of Commons: "Smuggling is threatening the safety of our communities and the livelihood of lawabiding merchants. The organized crime networks that control 95 per cent of the tobacco smuggling also supply and distribute smuggled liquor, firearms and drugs. It is essential that we take strong steps to dismantle these networks."
I've talked with many members of law enforcement and proand anti-legalization advocates in the American states that have already legalized recreational marijuana. They have almost all acknowledged a slight but not significant dip in crime. The two who did not were a conservative Colorado sheriff who was facing a difficult re-election process and wrote in a letter to voters that crime was up significantly in his district, although that assertion was at odds with a study by Metropolitan State University of Denver, the admittedly partisan Drug Policy Alliance, the Colorado Department of Public Safety and, most important, the FBI Uniform Crime Report, which all claimed a slight downturn in crime in the same community over the same period. The other was a sheriff in a more blue-collar Colorado community who said crime was up in his district; but blamed it on "opioids."
At most, the legalization of recreational weed will be an annoyance to major crime organizations such as the Hells Angels, MS-13, 14K, the Cosa Nostra and 'Ndrangheta, although small fry, such as street gangs who answer to the big boys, will certainly suffer more.
Don't shed a tear for Canadian organized crime as they face marijuana legalization. They'll adapt.
A worker inspects medical marijuana leaves at Canopy Growth Corp.'s Tweed facility in Smiths Falls, Ont., in February.
SEAN KILPATRICK/THE CANADIAN PRESS