Disturbing ‘Business of Drugs’ exposes how illegal industry banks billions
By Michael Kaplan, (2020 )
Former CIA operative Amaryllis Fox went from beating the terrorist game to examining the drug biz without missing a beat. In part that’s because the two operate hand-in-hand, she told The Post, with drug money funding many of the world’s rogue armies.
In “The Business of Drugs,” a six-episode documentary series premiering this week on Netflix, Fox, 39, examines how the money moves, where it goes — and how much is generated.
“The total global trade in illegal drugs is between $426 and $652 billion,” she said. “That makes it the second most lucrative illicit market after counterfeit goods.”
Here is how four drugs generate big bank.
The global cannabis market, including legal and illegal iterations of the drug, is estimated by Fox to be worth up to $287 billion. It is the world’s most popular recreational drug, with an estimated 263 million people consuming cannabis every year, according to the 2019 Global Cannabas Report.
Obtaining a license [to grow and sell weed legally] requires applicants to have so much in the bank, pay such high taxes and fill out such complex paperwork that it is prohibitive to the average farming family,” said Fox of a business that generally requires an investment of some $750,000 to get up and running. “It opens the door for multinationals to come in and capitalize on the legal trade but it does not allow those to move into the legal market who are already there [and doing it illegally].”
Hence, it does little to turn crooked dealers and growers straight. Additionally, high operating costs also result in legal dealers having their prices undercut by illegal competitors. This situation drove the owners of one Las Vegas dispensary to come out with a cheaply produced strain called Black Market, specifically promoted as a legit alternative to the criminal stuff. With business booming on the illegal side — where penny-pinching potheads open themselves up to purchasing chemically treated product — Fox said, the underground weed biz “continues to thrive while being more violent and more lucrative than ever.”
Just as Amazon has put a crimp in the profits of brick-and-mortar retailers, the dark web, which generated as much as $21 million in illegal drug sales during just one month in 2016, has taken a bite out of profits long realized by old-school drug dealers who used to scoot around town carrying backpacks loaded with hits of ecstasy among other drugs.
Replacing hand-to-hand transactions that were once done locally is a digital marketplace where synthetic drugs such as ecstasy (virtually undetectable in sealed envelopes) easily travel around the world, often via international post, funded by untraceable cryptocurrency payments. Ecstasy accounts for 19 percent of sales made through illicit online operators, according to the docuseries.
“The dark web as a marketplace was eye-opening,” said Fox, speaking of a parallel internet where sites that mimic the notoriously shuttered Silk Road serve as clearinghouses for sales of illicit goods. “Sites are set up just like Amazon, with customers posting comments about the quality of drugs and service.“
Although sales, payment and delivery mechanisms seem super clean and familiar — so much so that it’s easy to forget about shady characters on the other sides of transactions — the outcomes of ingesting these drugs can be dangerous. Ecstasy and other mind-altering substances “sold on the dark web are the equivalent of moonshine,” said Fox. “Sometimes the consumption of moonshine resulted in death or blindness and sometimes it didn’t. Same thing here. Buying drugs on the dark web is like playing Russian roulette.”
Despite the enduring popularity of cocaine and the profits that the powder generates — the global cocaine market has been estimated to total up to $144 billion, according to Fox — the shocking thing is that the price of cocaine has remained stable for decades. Rodrigo Canales, an associate professor at Yale School of Management, explained to Fox, “This is not a market in which people compete on price. They compete on the reliability with which they can serve the market.”
According to Fox, cocaine has sold for $100 per gram since 1995. Despite the fact that demand has increased dramatically — in the doc, she says that the number of new coke users has nearly doubled since 2013 — prices have not gone up. “It’s a matter of cartel coordination,” said Fox, explaining that this is helped by the fact that coca farmers receive the same $500 per ton of coca leaves that they did 30 years ago. “The street value remains so far above the actual cost of production that it works for the cartels.”
And nobody should worry about those in the coke trade having their profits eaten away by, say, rising costs of Maserati automobiles. Considering inflation, Fox said, “they make less money per kilo [than in decades past]. But last year more cocaine shipped from Colombia than during any year on record. They managed to put more product in the hands of people than ever before.”
The legal opioid industry continuted to grow with the introduction of OxyContin in 1996. Doctors loved prescribing the drug and patients in pain loved taking it. The National Institute on Drug Abuse estimates 21 to 29% of patients prescribed opioids for chronic pain misuse the drugs. That has contributed to a global market of prescribed opioids that is valued at $25.4 billion. It is nearly as big as the gun business in America and, according to Fox, more lethal: “Opioids have killed more Americans than gun violence and ended more lives around the world than the Vietnam war.”
As per Fox, opioids are so addictive and so abused (whether prescribed or bought on the street) that “someone dies of an opioid overdose every 11 minutes.” Under unique circumstances, the use of a legal drug prescribed for legitimate reasons can result in people pursuing illegal drugs in order to satisfy their addictions. So-called pill-mills, where doctors made bank by being loose with their prescription pads, thrived until a few years ago. Between 2006 and 2012, said Fox, “76 billion [opioid] pills were released.”
Looking at the colliding worlds of law and business, she explained that the government has since clamped down on the abuse of legal opioids, but that has created its own set of problems. “Regulatory oversight caught up 20 years [too late] and drove people to underground markets for their drugs,” Fox said. “Now Chinese production of fentanyl [a powerful synthetic opioid] is through the roof and the illegal market is booming. [This is] because of increased legal and regulatory oversight” — after users of the legal drugs are already addicted. “The opioid case study is a cautionary tale”. thenypost