America’s illegal drug market is huge. The country spent $109 billion in 2010 on illicit marijuana, cocaine, methamphetamine, and heroin, according to new (and very rough) estimates from the RAND Corp. prepared for the White House.
To put that number in perspective: It’s more than we spend at furniture stores ($90 billion) or electronics and appliance retailers ($101 billion) annually, according to U.S. Census data. It’s more than one-fifth of what we spend eating out each year, and it dwarfs the $21 billion we drop at bars.
Most of that $109 billion is spent by what the RAND report calls “the minority of heavy users,” who get high during at least 21 days of a month. And while the total dollars spent (adjusted for inflation) remained roughly stable from 2000 to 2010, the mix has changed. Cocaine use has gone down; marijuana use has gone up. Meth peaked in the middle of the Aughts, though the report’s authors caution that the meth numbers are less reliable than other estimates.
There’s a great deal of uncertainty in RAND’s numbers. No one’s scanning a bar code when they hand over a bag of coke, and criminal enterprises don’t fill out economic data surveys. The researchers tried to size up the drug market by extrapolating from user demand, rather than create estimates based on drugs seized by law enforcement. The uncertainty “is an inevitable consequence of trying to measure sales of something sold in hidden markets or consumption behavior that is both illegal and dominated by a relatively small number of heavy users,” the report says.
The numbers may be off by huge amounts. For example, while RAND’s best estimate of U.S. spending on cocaine (including crack) in 2010 is $28 billion, it pegs the range as $18 billion to $44 billion. Even the upper and lower bounds don’t necessarily capture all the uncertainty in measuring drug spending. RAND says “the range should be considered plausible, but not extreme.”
That said, the numbers show the direction of shifting drug habits, even if the estimates are far from precise. In 2000, Americans spent more than twice as much on cocaine than on cannabis. That changed dramatically by 2010, when marijuana spending was estimated to be almost 50 percent higher than cocaine. (The first three years of marijuana data are not perfectly comparable to the rest of the series because of survey changes, Rand notes.)
Marijuana had far more regular users than the other drugs in Rand’s analysis, and the figure appeared to jump toward the end of the decade. (Note that the study period ends two years before Colorado and Washington State approved legal recreational pot use.)
And here are the estimates for the amount of each drug traded, by weight. Again, the decline in cocaine and rise in marijuana are clear:
RAND’s study period ends in 2010, several years before resurgent heroin use began making headlines, most recently after Philip Seymour Hoffman’s death. But the report may record the early signs of a growing problem: “Heroin consumption remained fairly stable throughout the decade,” the authors note, “although there is some evidence of an increase in the later years.”