The big difference between cannabis and other illegal drugs is in unit prices and profits. In the United States the average price of cannabis herb is roughly one-eighth that of cocaine on wholesale and retail markets. The price differential reflects the considerably greater narcotic effects of cocaine (demand factor) and the concentration of control efforts on this drug (supply factor).

For the small countries of Central America and the island Caribbean, cannabis exceeds cocaine in trafficking by a factor of 3.4 in terms of quantity, but is less than 40 percent of the cocaine trade in value, when measured by prices on the U.S. market. When the countries on the northern rim of South America are included, the value comparison turns even more decisively in favour of cocaine (see table).

The economics of relative prices and returns vis-a-vis risks explain the shifts in the trade during the 1980s and 1990s. With the rapid growth in the cocaine trade from South America to North America and Europe, the Caribbean region came to occupy a strategic geographic position for warehousing, packaging and trans-shipment. Criminal syndicates with a continental reach are said to have utilized existing cannabis distribution networks based in the western Caribbean mainland and islands.

In business terms, strategic alliances were made, based on the complementary assets of the partners: control over supply and distribution networks of the major syndicates and the locational advantages of the intermediaries.

Geo-economic changes in production and supply corridors in the late 1990s resulted in a shifting of trans-shipments routes towards the eastern Caribbean. With this came new alliances and their inevitable spin-offs in the form of turf wars. Money-laundering through off-shore financial centres added to the mix.

The dimensions of these developments demand a regional approach, as proposed by the recent report by the Caricom Regional Task Force on Crime and Security. But the scale of the problem suggests that regionalism will need to extend to the entire region of the Greater Caribbean.

 

Average price on US market, 2000

Sub-region	Wholesale, $/kg	Retail, $/gram
Herbal Cannabis	2,475	10.2
Cocaine	20,546	81.8

TRAFFICKING	Quantity (kgs)	Value on U.S. market $ mn.
		Wholesale	Retail
Herbal Cannabis
Island Caribbean	89,792	222	916
Cent America1	7,464	18	76
South America2	90,669	224	925
North America3	2,050,402	5,075	20,914
Total Greater Caribbean region	2,238,327	5,540	22,831
Cocaine
Island Caribbean	11,604	238	949
Cent America1	16,690	343	1,365
South America2	76,572	1,573	6,264
North America3	34,622	711	2,832
Total Greater Caribbean region	139,488	2,866	11,410

Source: UNODCCP: Global Illicit Drug Trends, 2002.

 

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