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How does the Cartel make so much money when the percentage of people using drugs is so low?

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966 utenti della rete avevano questa curiosità: Spiegami How does the Cartel make so much money when the percentage of people using drugs is so low?

This whole post is referring to this statistic: https://www.statista.com/statistics/443460/percentage-of-population-that-has-used-illicit-drugs-by-drug/

The cartel is so rich and has so much power which makes me wonder how the hell are they making so much money if there's quite a low of percentage of people using drugs.

Ed ecco le risposte:

most drug users wouldnt disclose they use drugs in a survey

drugs are expensive

cartels do more than deal drugs

The answer is very simple: drugs are expensive, and even if only a small portion of people use drugs, that’s still a lot of people over the scale of a whole country.

IIRC in the US, cocaine usually costs around $100 a gram, but it does not cost anywhere near $100 a gram to produce and even transport over international borders. If a gram (1/28th of an oz) of cocaine is $100, then a kilogram (2.2 lbs) is valued at $100,000 dollars on the street. Even considering the high costs involved in drug trafficking, that’s still an enormous amount of money.

Ex drug policy here. Drugs don’t cost much to produce, are cheap to distribute, involve little capital investment, sell for high prices and – crucially – it’s pretty much all cash and nowhere for it to go. The cartel is a few dozen people, rolling in cash and unable to invest it. So they bribe, party and blow it on whatever takes their fancy including, of course, assassinating rivals and threats..

A lot is lost or wasted (one mid-level US distributor estimated that only a quarter of the money made it back to Columbia). 1500 tons of cocaine – even at wholesale prices – is a lot of cash.

The percentage is low, but what’s the actual number of users?

Assuming the USA, the bar on the right shows 3%. That equates to 10million users. Globally, that’s 243 million users.

What’s the average daily spend on drug use? Assuming cannabis, 0.5 gram per joint is approx $5. 2 joints a day would be $10.

That’s 100million dollars, per day, assuming 3 percent of the population smokes on average 2 joints.

This is a pretty conservative figure, any only accounts for 1 type of drug in the us. All illicit drugs across the globe? Much, much higher.

To put it into perspective, Apple’s annual revenue equates to around 250million per day in the USA (based on 2018 revenue figures).

The answer is relatively simple, drugs are sold with a huge margin, they’re overpriced. A brick of coke may cost tens of thousands on the street but in terms of production that kind of money equates to a truck load. This means that a successful delivery and sale can cover a lot of losses and then some.