Featured on VICE. Author: Allie Conti
The amount of cash it takes to cop four commonly-used drugs in the United States has increased by over 40 percent, according to the latest edition of the annual Bloomberg Global Vice Index, which dropped last week. The measurement tool is sort-of like the Consumer Price Index, but instead of fruits or cereals, its proverbial "basket" contains a gram each of opioids, cocaine, weed, and some sort of amphetamine.
That array of substances, the Index found, collectively cost $846 in the United States, or more than the average worker between the age of 25 and 34 brought home per week in the second quarter of last year. (Overall, the Index found the share of average weekly American income needed to purchase a "basket" of drugs would be about 70 percent.) Given that millennials in America are known to spend up to 45 percent of their take-home pay on rent by age 30, the data, which is based in part on income numbers from the International Monetary Fund, suggest that having both a roof over your head and a bacchanalian consumption habit is next to impossible in the modern era. The numbers simply don't add up.
In fact, the only place where Bloomberg found it more pricey in US dollars (rather than as a share of income, which the Index tracked separately, and where the US also ranked highly) to obtain all this stuff was the Antipodes, a.k.a. Australia and New Zealand. But according to the Index, it cost a significantly higher share of one's weekly income to get fucked up in places like China and Japan (about 94 and 95 percent, respectively). All four cases may be a product of the countries' relative distance from some traditional zones of drug cultivation, as well as varying drug laws. Meanwhile, Luxembourg was said to be the most affordable place to get high, as a share of weekly income, in large part due to the fact that the average person there makes six-figures.
This all seems to run counter to the longstanding narrative that drugs are getting cheaper and more potent over time. In fact, the New York Timesreported around this time last year that even meth was "purer, cheaper, and more lethal" than ever before. But according to Greg Midgette, an assistant professor of criminology and criminal justice at the University of Maryland and expert on drug markets, there are a number of reasons the drug market may be behaving differently than we thought.
VICE: I feel as if the common conception is that drugs are cheaper and stronger than ever, thanks in part to trends toward legalization. What's going on with these numbers? Forty percent in a year is astounding.
Greg Midgette: Yeah, 40 percent is astounding. I think there is a good chance that the index is capturing volatility in the underlying data for the US. If cities providing price data change over time, or if the average size of the purchase changes over time, either could swing prices dramatically. Prices can vary a lot from city to city, and quantity discounts can be really large for illegal drugs.
Prices have been declining in states' recreational marijuana markets, and it would be tough to argue illicit market prices would increase substantially while states' legal market prices were dropping. From the most recent publicly-available data from DEA through the end of 2016, cocaine and meth prices were decreasing. Heroin prices were up in 2016, but not by 40 percent. Other indicators of cocaine and meth use were up in 2017, which suggests prices might have increased. The 40 percent is still astounding though, especially if marijuana prices are flat or decreasing.
How does the Trump crackdown at the border affects the price of drugs? I could see it making cocaine skyrocket, but I'm also curious about marijuana.
I, too, am curious about that. Generally, interdiction should reduce supply, which should increase prices. More punitive polices should increase prices too. If I could go to prison for five years for getting caught with an ounce of crack, or if the chance that I’ll get caught increases, I'll charge my buyers more for that crack. For illegal markets, a portion of the price a buyer pays is the "risk premium," or what a seller would want to be compensated to take the chance of getting arrested and going to prison. That’s likely part of why, at least according to the Bloomberg Vice Index, prices are higher in the US than countries with similar incomes like Denmark and the Netherlands that are less punitive toward drug possession.
In states with recreational markets, legal weed is more expensive than black market weed for a few reasons. First, you probably won’t pay state and local taxes to your dealer. Second, recreational stores pay for stuff like licenses, testing, marketing, rent and utilities, and they need to charge more to make up for that. Third, that “risk premium” that a dealer in the illicit market faces is potentially smaller in recreational market states where possession of a small amount is legal in the eyes of the state. Finally, legal weed is typically higher potency, higher quality, and is less likely to have contaminants than illicit product, all of which can help command a higher price.
But legal weed can actually drive some prices down, right?
Recreational legalization might drive down prices in both legal and illegal markets because it spurs investment in cultivation practices and product development, which yield more reliable harvests, higher potent flower, and lower costs of extraction for other marijuana products. Those new developments are available for the legal and illegal markets. Furthermore, as equipment for methods like CO2 extraction becomes cheaper, the risk premium in the illegal market shrinks since it’s easier to conceal a near-odorless 90 percent THC extract than a skunky brick that is five times its physical size.
Are there trends you've seen about meth specifically versus the larger category of amphetamine-type substances? What about ecstasy?
Ninety percent or higher purity meth is apparently now the norm based on DEA data, so Walter White wouldn’t be special today. With the higher purity, we have also seen big increases in meth treatment admissions and seizures. That suggests meth consumption is growing, and potentially pretty rapidly. If the opioid epidemic wasn’t so terrifying and justifiably attention-consuming, I think we’d be really worried about meth. Psychostimulant-related overdoses were actually up 200 percent between 2012 and 2017—300 percent if you count cases that include fentanyl. It's also worth noting that we can’t separate out meth from other psychostimulants in toxicology reports.
What can you extrapolate from the rise of street Oxy prices—as cited by the Index—in terms of how the government is handling the opioid crisis?
That’s a really tough question, and we always need to consider the potential for apocryphal data on illicit drug prices. I’m not sure what influence responses to the opioid epidemic at the local, state or federal levels of government have had on street Oxy prices. Abby Alpert, David Powell, and Rosalie Pacula have a recent paper that provides evidence that heroin overdoses increased when Purdue reformulated OxyContin to make it more difficult to crush. A fairly straightforward hypothesis is that a share of dependent Oxy users turned to heroin when inhaling and injecting Oxy was made harder. Prescribing practices for opioid painkillers have also been put under scrutiny, and prescribing rates have fallen by 22 percent between 2013 and 2017. Fentanyl also started showing up in bootleg Oxy and in heroin over that period, making those drugs really toxic. One plausible, but purely speculative, explanation is that real non-counterfeit prescription opioids including Oxycodone could become really valuable in the illicit market because the legal alternatives are scarce and the other illicit alternatives are scary.