Source: Fortune.com
Summary
Mexico’s ban on the sale of electronic cigarettes has handed the market to organized crime groups, who are now consolidating their control over the sector. The ban, which took effect on January 16, prohibits the sale of vapes except for personal consumption, but the law is unclear and has raised concerns about corruption and extortion. Experts believe the ban will strengthen the cartels by giving them another revenue stream, and that consumers will be forced to turn to the black market for vapes. The ban has also raised concerns about the safety of vapes, as the cartels may sell adulterated products.
Our Reading
The announcement sounds familiar.
Mexico’s ban on vapes is a classic example of a policy that sounds good on paper but has unintended consequences. By banning the sale of vapes, the government has created a power vacuum that organized crime groups are eager to fill. The cartels are already presenting themselves as suppliers and formal businesses, and are even buying disposable shells from Asian manufacturers to fill themselves. The lack of regulation raises the potential for adulterated products from organizations that already handle illicit drugs.
The strategy enters a familiar phase: the cartels are cornering the market, and the government is left to deal with the consequences.
The numbers tell one story: 130,000 electronic cigarettes were seized in the port of Lazaro Cardenas, and authorities have carried out raids and seizures. But the real story is the one that’s not being told: the rise of organized crime in the vape market.
One thing is clear: the ban on vapes has created a lucrative opportunity for the cartels, and it’s only a matter of time before they take control of the entire market.
The situation is a perfect storm of corruption, extortion, and violence, and it’s only going to get worse.
