American marijuana producers have so effectively increased production and brought down cannabis prices that Mexican growers are having a hard time competing.
Medical marijuana legalization in 23 states and Washington DC – as well as the rise of recreational cannabis industries in Colorado and Washington State – has caused cannabis production to jump in the U.S., pushing down prices by more than half and undercutting Mexican growers, according to National Public Radio.
The price decline has been so dramatic, in fact, that some of the cartels are illegally taking marijuana produced under state medical or recreational marijuana programs south into Mexico, NPR reported.
The trend shows that state-legal cannabis business are wooing people away from the black market. But it also raises concerns that cannabis produced and sold by licensed businesses or home growers – is being diverted outside state and even U.S. borders.
One Mexican grower, Nabor, who only used his first name since cannabis production is illegal in the country, told NR that legalization of marijuana production in the U.S. will “run us into the ground.” The Culiacan, Sinaloa, grower said he’s been growing the plant since he was 14, but may switch to opium poppy production due to falling marijuana prices.
The Mexican Institute of Competitiveness said in a study two years ago that cannabis profits in the country would plummet 22% to 30% if the U.S. continued to legalize marijuana.