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Originally published Wednesday, October 31, 2012 at 8:47 PM

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Mexico study: Legalizing pot could cut into cartel profits

The ballot measures to be decided Nov. 6 would allow adults to possess small amounts of pot under a regimen of state regulation and taxation.

The Associated Press

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MEXICO CITY — A study released Wednesday by a respected Mexican think tank asserts that proposals to legalize the recreational use of marijuana in Colorado, Oregon and Washington could cut Mexican drug cartels' earnings from traffic to the U.S. by as much as 30 percent.

Opponents questioned some of the study's assumptions, saying the proposals could offer new opportunities for cartels to operate inside the United States and replace any profit lost to a drop in international smuggling.

The ballot measures to be decided Nov. 6 would allow adults to possess small amounts of pot under a regimen of state regulation and taxation. Polls have shown tight races in Washington and Colorado, with Washington's measure appearing to have the best chance of passing. Oregon's measure, which would impose the fewest regulations, does not appear likely to pass.

The study by the Mexican Competitiveness Institute, "If Our Neighbors Legalize," assumes legalization in any state would allow growers there to produce marijuana relatively cheaply and create an illicit flow to other states, where the drug could be made available at cheaper prices and higher quality than Mexican marijuana smuggled across the international border.

The report, based on previous studies by U.S. experts including those at the RAND Corporation, assumes Mexican cartels earn more than $6 billion a year from drug smuggling to the United States.

It calculates the hypothetical, post-legalization price of marijuana produced in Oregon, Washington and Colorado and sold within those states and smuggled to other states. It then assumes that U.S. purchasers would choose domestic marijuana if it were sold cheaper than the current price of Mexican marijuana.

Opponents of the ballot measures said the study bolsters one of their principal objections — that it would turn any state with legal marijuana into a producer for the rest of the country.

They said, however, that they did not believe that production would rob the cartels of significant profits, saying instead they thought Mexican drug lords would try to participate in legal U.S. production. The Mexican government has said that drug legalization in some U.S. states could make it harder to prosecute growers and dealers in Mexico, because they would be producing a product potentially destined for a place where it is legal.

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