On 28 October a joint operation involving the army and national guard (GN) operation in Culiacán, Sinaloa state, broke up a synthetic drug laboratory, arrested five members of a drug trafficking organisation (DTO), and seized 118kg of fentanyl, a synthetic opioid, the largest ever bust of its kind in Mexico.
The rise and fall of major Mexican DTOs has often been attributed to changes in business models. The introduction of new, hardier marijuana species, the shift to crack cocaine, the rise of poppy/heroin production all made or broke big DTOs. If that is the case, the illicit industry may be facing another key turning point, the rise of synthetic drugs.
Broadly speaking the main products that the DTOs sell into the US and other markets are changing. As recreational use of marijuana becomes legal in more US and Mexican states, competition grows and profit margins shrink, so it has become less important to the DTOs. Demand for cocaine remains steady, but heroin is rapidly being overtaken by synthetic opioids such as fentanyl. There is also expansion of methamphetamines, and to a lesser extent in Mexico, of MDMA, the active ingredient in ecstasy. Mexico’s two biggest DTOs, Sinaloa and Cartel Jalisco Nueva Generación (CJNG) are at the forefront in the move to synthetics. The bust in Culiacán – fentanyl with an alleged street value of US$48m, in many ways illustrates the new business model – drug production through a network of clandestine laboratories in urban areas, often relying on skilled laboratory chemists recruited from manufacturing and chemical industries in the north of Mexico which serve the US market. In this case the laboratory was said to mainly supply the Sinaloa DTO for onward shipments.
Fentanyl and other synthetics are lighter and easier to smuggle into the US (they are hidden in industrial cargoes or even sent through the post as a powder). A report by the United Nations Office on Drugs and Crime (UNODC) published in October, says Mexico has now become one of the world’s top synthetics suppliers, outstripping Myanmar, Nigeria and Afghanistan. The DTOs initially depended on China to supply the necessary precursor chemicals but have now diversified and frequently use suppliers in India.
The move to synthetics may have various implications. Significantly, it could weaken the long-present link to illicit agricultural production. Most DTOs have a pyramid-like structure with the capos at the top and impoverished peasant farmers at the bottom, growing the illicit marijuana, coca, or poppies needed as raw material for production. The need to protect agricultural production has led DTOs to effectively control isolated rural territories in a range of locations from north-eastern Colombia to the mountains of Sinaloa. While change will take time, DTO operations may become more urban in nature. Another significant change is that synthetics are more powerful than, for example, heroin and have already led to a sharp rise in overdose deaths in the US. Increasing alarm at these deaths will likely prompt the Washington administration to review and adapt its anti-narcotics strategy, with potentially far-reaching effects for Mexico.