Interview, Other
How the Mexican cartels are making profits now
- The opioid crisis is projected to enter a third phase driven by fentanyl demand in the U.S. and Mexico, following previous phases of prescription drugs and heroin.
- Production is expected to continue its "nearshoring" shift from China to Mexico as Chinese controls on finished fentanyl tighten, while precursor access remains a vulnerability.
- Synthetic drug revenue is anticipated to offset income declines from marijuana legalization in 18 U.S. states and decreasing heroin consumption.
- Criminal groups are predicted to diversify income streams beyond drugs, targeting sectors like the avocado market, fuel theft, extortion, and kidnapping.
- The criminal landscape is forecast to become highly decentralized, with traditional large conglomerates shrinking to roughly two entities while an estimated 200 smaller groups emerge.
- Smaller gangs lacking capacity for large-scale trafficking are expected to pivot to lower-overhead activities such as extortion and theft.
- Fentanyl production is viewed as democratizing the market, leading to a structural change where cartels act as multi-commodity entrepreneurs with high resilience.
- Demand for pills is rising as heroin usage declines among middle-class populations, driven by effective branding and the ease of distribution via dark net orders.
- Recruitment for fentanyl production is expected to remain robust, with workers willing to accept high risks for salaries of approximately $100 daily.
- Producers are anticipated to persist in low-tech, low-cost methods to reduce overhead, complicating enforcement efforts due to the lack of clear precursor identification.