As Marijuana Profits Dry Up, Mexico Crime Groups Turn to Alcohol and Logging

Mexico remains the main international provider of marijuana for the United States, but this has greatly diminished since 2013, forcing certain criminal groups to adapt and look for other funds.

As more US states move towards legalization, “Mexican marijuana has largely been supplanted by domestic-produced marijuana,” according to the US Drug Enforcement Administration’s (DEA) 2020 National Drug Threat Assessment. 

The report shows marijuana seizures along the southwest US-Mexico border declined by more than 81 percent between 2013 and 2020, suggesting Mexican crime groups have significantly scaled down their marijuana trafficking operations.

A high-ranking Sinaloa Cartel operative in Sonora state told InSight Crime that the marijuana business is “barely profitable now.” 

“I only traffic marijuana to pay some of my people in the organization. I’m paying them with kilograms [of marijuana] that they manage to smuggle and get paid for, but it’s really coming to a point where it’s no longer a viable business,” he said. 

The border state of Chihuahua is Mexico's second-largest marijuana producer behind Sinaloa, accounting for 20 percent of production nationwide, according to a 2016 report by a Universidad Autónoma de Madrid (UAM) researcher analyzing drug cultivation. And much of this comes from the Sierra Tarahumara, a vast network of canyons and mountains.

Two of Mexico's main criminal organizations operate in the Sierra Tarahumara: the Sinaloa Cartel and Juárez Cartel through its armed wing, known as La Línea.

Over the past 10 years, fighting between these two groups has had a constant ebb and flow.

But both of these criminal heavyweights are having to adjust to many US states decriminalizing or legalizing marijuana. To do so, they have monopolized other commercial activities like alcohol sales and logging, while also extorting the region’s local farmworkers to keep profits alive.

Alcohol Monopoly in Chihuahua 

Starting from La Junta highway at the entrance to the Sierra Tarahumara, only “authorized” stores can sell alcohol. Criminal organizations have threatened national chains like Oxxo to stop selling alcohol or risk facing retaliation, according to residents, business owners and state officials speaking anonymously for fear of reprisal.

For the most part, according to the cartel operative interviewed by InSight Crime, the alcohol monopoly is in the hands of the Sinaloa Cartel, specifically Noriel Portillo, alias “El Chueco.” 

“Only authorized stores can sell alcohol. That way, there is no competition, and all of those earnings go to the organization,” he said. 

This started as a direct consequence of the depreciation of marijuana prices, according to the operative. The municipalities under this rule stretch all the way from Bocoyna, Guachochi, Batopilas, Urique, and out to Guadalupe y Calvo.

He added that all alcohol distribution trucks are “stopped at the highways connecting to the Sierra and asked to go back. We maintain our own distribution, and businesses have to buy only from us.” 

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The cartel is buying massive quantities of alcohol in major cities like Cuauhtémoc or the capital, Chihuahua, and then transporting those products by truck to several municipalities inside the Sierra Tarahumara. They are the ones granting authorization to sell and distribute all sorts of alcohol without any legal permits. 

The operative said they are not forcing everyone to sell alcohol, but those who want to must have permission from the cartel.

Alcohol regulatory authorities have virtually no presence in the Sierra Tarahumara, according to the cartel operative. 

Most products go for two or three Mexican pesos (roughly $0.10) above the average retail price, which InSight Crime corroborated in several stores. And some restaurants aren’t selling any alcohol out of fear of negotiating with crime groups. 

“We had to go with their deal, otherwise we would have to stop selling and close our business,” said a women from a local store in Guachochi.

Timber Trade Thrives as Marijuana Falls

San Juanito, a small wooded town at the beginning of the Sierra Tarahumara and the epicenter of fighting between the Sinaloa and Juárez cartels, used to be known as the “San Juanito forest” for its beautiful, thick tree cover. But after years of relentless logging - both legal and illegal - locals now joke and call it the “San Juanito Valley.”

Driving through it, the devastation is no secret: the areas surrounding the main highway are barren, with nothing but wood stumps for miles. 

For almost six years, both the Sinaloa and Juárez cartels have relied heavily on the logging industry. The Sierra Tarahumara has historically been a large source of lumber for all of Mexico. With around half of its 16.5 million hectares forested by pine and oak trees, according to Community Technical Consulting (La Consultoría Técnica Comunitaria - CONTEC), a non-profit organization defending human and land rights in the Sierra Tarahumara, this area provides around 10 million square meters of timber that is sold in bulk to construction companies or for use in building furniture.  

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With the heavy cartel presence, it’s become almost impossible to know how much of the wood taken into the sawmills is legitimate or tainted by organized crime, either illegally produced by such groups or by legal sawmills forced to pay a tax in order to operate. 

People around San Juanito and the neighboring town of Creel were very hesitant to speak out loud about illegal logging. A local artisan told InSight Crime that the illegal timber trade has “everybody’s fingerprints on it.” 

“Authorities, politicians, narcos and entire families are in the business,” he said. “But this is something we don’t discuss.” 

Extorting Local Farmworkers 

During the summer months, hundreds of men leave the cover of the Sierra Tarahumara to travel northbound to major cities like Cuauhtémoc or Chihuahua to work on apple, tomato, chili, pecan and bean farms. Big companies have established massive operations around these two cities and hire their workforce from all over the state. 

But more recently, men leaving the Sierra to work have been required to notify cartel operatives in charge of monitoring who leaves and where they go.

A local Indigenous farmer returning from an apple tree farm, who spoke with InSight Crime under the condition of anonymity for fear of retaliation, said that crime groups are now demanding a percentage of their earnings on their way back home. 

“Sometimes they are the ones who transport us to the farms and back, and they say the illegal toll is payment for the ride,” he said. 

It’s not clear why the amount charged varies, but local workers said it ranges from a five to 10 percent cut of their earnings for a whole season, which amounts to roughly $800 for two full months of work.

Most locals interviewed pointed to the Sinaloa Cartel as the organization behind this operation, but La Línea’s involvement couldn’t be dismissed.

State authorities said they were unaware of this new extortion trend.