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Strategic Findings

Mexican DTOs are circumventing chemical sale and import restrictions in Mexico in an attempt to maintain large-scale methamphetamine production in that country. Available law enforcement and intelligence reporting regarding methamphetamine production in Mexico, the primary source of methamphetamine to U.S. drug markets, indicates that production was high and stable in 2006. In 2007 production remained high but may have decreased. The high levels of production are being achieved by Mexican DTOs despite strong restrictions placed by the government of Mexico on the importation and legitimate distribution of precursor chemicals in mid-2005 and despite several seizures of methamphetamine precursor chemicals and finished methamphetamine by Mexican officials since late 2006. The latest available data from the United Nations Commodity Trade Statistics Database show that the amount of commercial pseudoephedrine imported into Mexico decreased from 226.5 metric tons in 2004 to 43.4 metric tons in 2006 (see Chart 1). Additionally, the government of Mexico recently seized several significant, large shipments of pseudoephedrine, pseudoephedrine analogs, and methamphetamine--on December 5, 2006, 19.5 tons of N-acetylpseudoephedrine were seized at the Port of Lázaro Cárdenas, Michoacán; on February 8, 2007, 3.4 tons of pseudoephedrine were seized at the Mexico City International Airport; in mid-February 2007, 40.0 tons of reported "raw pharmaceutical chemicals" (believed to be N-acetylpseudoephedrine) were seized at the Port of Manzanillo, Colima; and on March 13, 2007, 260 kilograms of ice methamphetamine were seized near Gómez Palacios in the state of Durango. In an attempt to maintain production levels in the face of these developments, Mexican DTOs appear to have adapted their operating procedures in several ways, including smuggling restricted chemicals through new routes, importing nonrestricted chemical derivatives instead of precursor chemicals, and using alternative production methods. For example, Mexican DTOs smuggle pseudoephedrine and ephedrine into Mexico from source areas in China (often with assistance from ethnic Chinese associates) and India using indirect smuggling routes that include transit through Central Africa, Central America, Europe, and South America. In addition, packages containing ephedrine and pseudoephedrine are commonly mislabeled as other items during transit to Mexican methamphetamine producers in order to impede inspection by law enforcement at airports and seaports in Mexico. This circumvention of chemical control laws in Mexico has enabled producers to continue production and the flow of methamphetamine into the United States, as evidenced by methamphetamine seizures at or between ports of entry (POEs) along the Southwest Border (see Chart 2). National Seizure System (NSS) data show a significant increase in the amount of methamphetamine seized on the Southwest Border from 2002 through 2005 and relatively stable seizures from 2005 to 2006. Data for 2007 are incomplete; however, year-end totals will very likely show decreased seizures since 2006. If final 2007 seizure totals show a significant decrease from 2006, it would be the first indication of a possible decrease in methamphetamine production in Mexico following Mexico's chemical import restrictions.

Chart 1. Commercial Pseudoephedrine Imports to Mexico, in Metric Tons, 2004-2006

Chart showing commercial pseudoephedrine imports to Mexico, in metric tons, from 2004 through 2006.

Source: United Nations.


Chart 2. Methamphetamine Seizures on the Southwest Border, in Kilograms, 2001-2007*

Chart showing methamphetamine seizures on the Southwest Border, in kilograms, from 2001 through 2007.

Source: National Seizure System.
*Data as of November 27, 2007.

Mexican methamphetamine distribution networks are expanding in many U.S. drug markets and have supplanted many local midlevel and retail dealers in areas of the Great Lakes, Pacific, Southeast, Southwest, and West Central Regions. Mexican DTOs have expanded their methamphetamine distribution networks, particularly in methamphetamine markets previously supplied by local distributors. For instance, law enforcement authorities in Akron (OH), Hannibal (MO), Dallas and Houston (TX), Mobile (AL), Nashville (TN), Oklahoma City (OK), Orlando and Tampa (FL), Pueblo (CO), and Richmond and Shenandoah (VA) report the growing prevalence of Mexican DTOs at all levels of methamphetamine distribution in their areas and a concurrent increase in the availability of ice methamphetamine. Furthermore, law enforcement reporting indicates that in some cities--including Los Angeles (CA), Chicago (IL), Dallas and Fort Worth (TX), Memphis and Nashville (TN), and Oklahoma City--Mexican DTOs are exploiting their relationships with Hispanic and African American gangs as a means of controlling methamphetamine distribution at the midlevel and retail level.

Methamphetamine production in Canada has risen in recent years; a limited but increasing amount of Canadian methamphetamine is intended for distribution in U.S. drug markets. Anecdotal law enforcement reporting and laboratory seizure data from Canada indicate a potentially significant increase in large-scale production of ice methamphetamine and methamphetamine tablets since 2005. The purported increase has been attributed by Canadian law enforcement officials to Canada-based Asian (Chinese and Vietnamese) DTOs and criminal groups and members of OMGs (particularly members of Hells Angels Motorcycle Club) that reportedly produce the drug in largescale laboratories in rural and residential areas of the country. According to the Royal Canadian Mounted Police (RCMP), methamphetamine tablets are produced primarily by Canada-based Asian DTOs in Quebec, particularly in Montreal. Conversely, ice and, to a much lesser extent, powder methamphetamine is produced in laboratories operated by members of OMGs and Asian (primarily Chinese, but also Vietnamese) DTOs in superlabs in central and western provinces such as Alberta, Manitoba, and Saskatchewan.

Methamphetamine producers in Canada acquire pseudoephedrine through relationships with illicit chemical brokers in China and India and through the diversion of legitimate supplies in Canada. RCMP reporting and laboratory seizure data indicate that methamphetamine producers in Canada currently have little difficulty acquiring bulk ephedrine or pseudoephedrine; most methamphetamine laboratories seized in Canada during 2006--15 of 23--had the capacity to produce 20 or more pounds of product per production cycle, and 6 had the capacity to produce between 2 and 20 pounds. RCMP reporting reveals that methamphetamine laboratories in Canada are maintaining large production capacities in 2007; however, 2007 laboratory seizure data for Canada are not yet available. According to RCMP reporting, most of the methamphetamine produced in Canada is intended to supply growing demand in that country; nonetheless, some is intended for distribution in the United States, Japan, and Australia. Canada-based methamphetamine traffickers typically transport ice and tableted methamphetamine into the United States through the same smuggling routes used by traffickers to smuggle Canadian marijuana and MDMA. Moreover, some tableted methamphetamine produced in Canada is reportedly sold by distributors in the United States as MDMA to unsuspecting buyers, very likely in an attempt to stretch MDMA supplies and/or to ensure additional methamphetamine users.

State and federal precursor chemical controls and sustained law enforcement pressure continue to drive down domestic methamphetamine production levels. State and federal precursor chemical restrictions combined with sustained law enforcement pressure have reduced domestic methamphetamine production over the past several years. NSS data for 2007 show that the number of reported methamphetamine laboratory seizures has decreased sharply each year since 2004--the year that states began implementing strong, retail-level sales restrictions of ephedrine and pseudoephedrine products (see Chart 3). Moreover, in September 2006 the federal Combat Methamphetamine Epidemic Act of 2005 became effective nationwide, setting restrictions on the retail sale of pseudoephedrine and ephedrine products; this Act appears to be contributing to continued decreases in domestic methamphetamine production, according to seizure data through November 2007.

Chart 3. Number of Reported Methamphetamine Laboratory Seizures, 2002-2007*

Chart showing the number of reported methamphetamine laboratory seizures from 2002 through 2007.

Methamphetamine laboratory seizures in the United States have decreased dramatically since 2004.

Source: National Seizure System.
*Data as of November 21, 2007.

The steady decline in domestic methamphetamine production since 2004 may be contributing to a decrease in the percentage of state and local law enforcement agencies that perceive methamphetamine as the greatest drug threat to their areas. National Drug Threat Survey (NDTS) 2007 data reveal that the percentage of state and local law enforcement respondents who identified methamphetamine as the greatest drug threat to their areas was lower than that for cocaine for the first time since 2004. Moreover, the percentage of law enforcement agencies reporting methamphetamine as their greatest drug threat declined annually between 2004 and 2007. During this period, the percentage of state and local law enforcement agencies reporting cocaine as their greatest drug threat increased (see Chart 4). The apparent shift in perception among law enforcement regarding the threat of methamphetamine may be due to the sharp decrease in domestic methamphetamine production between 2004 and 2007.

Chart 4. Greatest Drug Threat: Percentage of State and Local Agencies Reporting

Chart showing the greatest drug threat between methamphetamine and cocaine and crack based on the percentage reported by state and local agencies.

The percentage of law enforcement agencies reporting methamphetamine as their greatest drug threat declined yearly between 2004 and 2007; during that time the percentage of state and local law enforcement agencies reporting cocaine as their greatest drug threat increased overall.

Source: National Drug Threat Surveys 2002 through 2007.

Methamphetamine availability trends in U.S. drug markets are mixed; some markets in western states have reported sporadic and temporary shortages, while markets in other regions have reported increasing availability. Law enforcement reporting indicates atypical trends in methamphetamine availability in the first half of 2007. Law enforcement agencies in Phoenix, (AZ); Bakersfield, Los Angeles, Modesto, Oakland, Sacramento, and San Diego (CA); Honolulu (HI); Boise (ID); Minneapolis (MN); Las Vegas (NV); Portland (OR); and Seattle (WA) reported decreases in the availability and purity of methamphetamine in their areas during the first 6 months of 2007; a number reported a concurrent rise in methamphetamine prices (see Table 1 in Appendix C). Conversely, law enforcement agencies in Huntsville, Birmingham, Mobile, and Montgomery (AL); Batesville, Conway, Jonesville, and Little Rock (AR); Pueblo (CO); Orlando and Tampa (FL); Chicago (IL); Indianapolis (IN); Minneapolis (MN); Hannibal (MO); Atlantic City and Newark (NJ); Akron (OH); Oklahoma City (OK); Memphis and Nashville (TN); Salt Lake City (UT); and Richmond and Shenandoah (VA) reported increasing availability of Mexican ice methamphetamine in their areas; most also reported that the influence of Mexican DTOs in their areas is growing.

Ice methamphetamine prices have increased significantly in some drug markets in California, Colorado, Florida, Hawaii, Idaho, Nevada, and South Carolina. Wholesale-level prices of Mexican ice methamphetamine have increased in a number of cities, according to NDIC Field Program Specialist (FPS) reporting (see Table 1). The increased prices may be the result of decreased availability in those drug markets.

Table 1. Wholesale-Level Ice Methamphetamine Prices, U.S. Dollars per Pound, Reported to NDIC in December 2006 and June 2007; Markets Experiencing Significant Price Increases

City, State December 2006 Price June 2007 Price
Fresno, CA 7,500-9,000 15,000-20,000
Los Angeles, CA 8,000-12,000 15,000
Sacramento, CA 8,000-14,000 16,000
San Diego, CA 9,000-11,000 9,000-17,000
San Francisco, CA 8,000-12,000 10,000-20,000
Colorado Springs, CO 5,000-6,000 14,000-16,000
Denver, Co 13,000 16,000-20,000
Jacksonville, FL 10,000-12,000 16,000
Miami, FL 10,000-30,000 15,000-30,000
Honolulu, HI 20,000-30,000 20,000-45,000
Boise, ID 10,000-12,000 17,000
Las Vegas, NV 8,000-11,200 16,000-18,000
Reno, NV 8,500 19,200
Greenville, SC 12,000-15,000 25,000-27,000

NDIC FPS reporting revealed that between January and June 2007 the wholesale price for ice methamphetamine increased significantly in some drug markets in California, Colorado, Florida, Hawaii, Idaho, Nevada, and South Carolina. Such increases are very likely attributable to decreased availability of the drug in those drug markets.

For a list of methamphetamine prices in major U.S. markets, see Appendix C.

Law enforcement pressure and chemical controls in the United States and Mexico appear to be contributing to intermittent methamphetamine shortages in some western drug markets. Several factors, including declining domestic methamphetamine production, precursor chemical controls and import restrictions in the United States and Mexico, and law enforcement pressure in both countries, quite likely are contributing to recent methamphetamine shortages in some markets in western states. Limited domestic methamphetamine production--primarily the result of domestic precursor chemical controls--has resulted in decreased supplies of domestically produced methamphetamine nationwide and a subsequent dependence on Mexican methamphetamine. Precursor chemical controls and import restrictions in Mexico have challenged Mexican DTOs' ability to access bulk quantities of precursor chemicals and, reportedly, have impacted their ability to maintain high levels of production in Mexico. However, Mexican DTOs have been able to maintain stable (or possibly slightly decreased) methamphetamine production at clandestine laboratories in Mexico from which they supply U.S. drug markets. Nevertheless, decreases in the availability of methamphetamine have reportedly occurred in a number of U.S. markets, particularly those in western states that are generally dependent on Mexican methamphetamine.

Methamphetamine abusers and distributors are increasingly engaging in identity theft to fund drug purchases and distribution operations. Some methamphetamine abusers engage in various forms of identity theft in order to obtain the drug. For example, methamphetamine abusers often generate cash by stealing and subsequently cashing personal checks or by using stolen credit cards to purchase merchandise that they sell for cash or trade for methamphetamine. Some abusers also trade stolen credit cards or personal documents (such as checks, bank statements, workplace pay statements, etc.) to distributors in exchange for methamphetamine. The distributors then sell the stolen credit cards and documents or provide them to methamphetamine producers as payment for the drug. For example, the Central Valley California High Intensity Drug Trafficking Area (HIDTA) reports that DTOs and criminal groups that traffic methamphetamine in the HIDTA region organize groups of methamphetamine abusers and direct them to steal personal identity documents in exchange for drugs or cash. Identities traded for methamphetamine are then used by the DTOs and criminal groups in a variety of ways, including:

Law enforcement officials often uncover evidence of methamphetamine-related identity theft during execution of methamphetamine-related search warrants; methamphetamine-related identity theft appears to occur most often in southwestern and western states, where distribution and abuse of the drug are most prevalent. Law enforcement reporting indicates that methamphetamine is the drug most commonly implicated in drug-related identity theft complaints. For instance, law enforcement officials in Arizona, Arkansas, California, Colorado, Kansas, Oregon, and Washington indicate that stolen mail and other documentation consistent with identity thefts have become increasingly commonplace at locations investigated under methamphetamine-related search warrants. Moreover, the National Association of Counties (NACo) 2006 Survey of U.S. Counties reveals that the percentage of sheriffs reporting methamphetamine-related identity theft in their county increased 15 percent--from 27 percent in 2005 to 31 percent in 2006.1 (2007 survey data are not yet available.) However, a precise comparison of the rate of methamphetamine-related identity theft with rates of identity theft associated with other drugs is not feasible because drug-specific identity theft statistics are not currently collected by a sufficient number of federal, state, or local agencies. Nonetheless, the latest data available from the Federal Trade Commission (FTC) show that in 2006 rates of reported identity theft were highest in states that have high and sustained levels of methamphetamine distribution and abuse. For example, Arizona, Nevada, California, Texas, and Florida (all states with well-documented and long-standing concerns regarding high levels of methamphetamine distribution and abuse) ranked first through fifth, respectively, for identity theft complaints per 100,000 population in 2006 (see Table 2).

Table 2. Top 5 States for Identity Theft Complaints per 100,000 Population, 2006

State Complaints per 100,000
Arizona 147.8
Nevada 120.0
California 113.5
Texas 110.6
Florida 98.3

Source: Federal Trade Commission.

Methamphetamine use appears to be stable; however, treatment for methamphetamine abuse has more than doubled since 2000. Data from the National Survey on Drug Use and Health (NSDUH) show that the number of past month methamphetamine users remained relatively stable at approximately 0.7 million between 2002 and 2006, the latest year for which such data are available. NSDUH data also show that rates of past year use for methamphetamine were relatively stable between 2002 (0.7%) and 2006 (0.8%) for individuals aged 12 and older. Despite apparently stable rates of use, methamphetamine-related admissions to publicly funded treatment facilities increased each year from 2000 (67,568) to 2005 (152,368), according to the latest data available from the Treatment Episode Data Set (TEDS) (see Chart 5). A likely contributor to the rise in methamphetamine treatment admissions is the increase in availability of Mexican ice methamphetamine that has been occurring in the United States since approximately 2001. Ice methamphetamine typically is a more pure form of methamphetamine that is usually smoked. According to reporting from the National Institutes of Health, smoking methamphetamine results in a more rapid onset of addiction to the drug than does snorting or ingesting. The result is quite likely a higher percentage of addicted users who would be seeking treatment for addiction within the methamphetamine user population.

Chart 5. Number of Primary Methamphetamine Treatment Admissions to Publicly Funded Treatment Facilities, 2000-2005

Chart showing the number of primary methamphetamine treatment admissions to publicly funded treatment facilities from 2000 through 2005.

Treatment admissions for methamphetamine have significantly increased since 2000, more than doubling from 67,568 in 2000 to 152,368 in 2005.

Source: Treatment Episode Data Set.

Flavored methamphetamine has emerged in some western drug markets. Law enforcement and treatment providers in Nevada and California have reported the distribution and/or abuse of flavored methamphetamine. In February 2007 the Nevada Department of Public Safety issued a report advising that pink, strawberry-flavored methamphetamine had been seized a month earlier in Carson City. The report described the drug, called Strawberry Quick, as small, pink chunks. In March 2007 NDIC FPSs received reports from public and private treatment providers in central and northern California indicating that some teenagers were abusing red, cherry-flavored methamphetamine, called go-fast. A number of the teenagers administered the drug by placing small pieces under their tongues or along their gums and allowing the pieces to dissolve. Additionally, some of the teenage abusers reported purchasing the cherry-flavored methamphetamine from Hispanic gang members in Stockton and Sacramento, California.

Some law enforcement and public health officials believe that flavors, which may mask the usually bitter taste of methamphetamine, could make the drug more attractive to young methamphetamine abusers who are just beginning to use the drug; however, the officials do not believe that long-term methamphetamine addicts, who are physically dependent on the drug, would seek out flavored methamphetamine because of taste. Flavoring would be effective only in oral administration or inhalation; smoking or injection would render the flavoring useless. Limited reporting from other areas of the United States indicates that other flavorings have been added to methamphetamine, including cola, orange, chocolate, and root beer.

In response to reports that methamphetamine may have been flavored to enhance the drug's appeal to young people, Senator Dianne Feinstein (CA) and Senator Chuck Grassley (IA) introduced legislation in the U.S. Senate on April 25, 2007. The Senate Bill (S. 1211), entitled "Saving Kids from Dangerous Drugs Act of 2007," is intended to amend the Controlled Substances Act to provide enhanced penalties for marketing controlled substances to minors. In particular, the bill would double the maximum penalties applicable to drug crimes if a criminal defendant manufactured, offered, distributed, or possessed with intent to distribute a controlled substance that is flavored, colored, packaged, or otherwise altered in a way that is designed to make the substance more appealing to a person under the age of 21.

End Note

1. National Association of Counties (NACo), The Meth Epidemic in America: The Criminal Effect of Meth on Communities, A 2006 Survey of U.S. Counties, July 18, 2006.

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