Criminal Commodities Series: Methamphetamine

Methamphetamine production is on the rise in Mexico. More cost-effective to produce than other illicit drugs, meth presents distinct advantages to Mexico's criminal organizations: Unlike other drugs, it can be manufactured independent of environmental or climatic considerations. Equally advantageous is that it can be produced in small spaces on both small and industrial scales.


However, production is limited by the quality of precursor chemicals used and the integrity of the manufacturing process. These precursor chemicals are regulated to varying degrees around the world, though most of them can be legally obtained because they have licit, industrial applications. Therefore, in assessing the dynamics of Mexico's methamphetamine market, and by approximation the U.S. market, the legal regulations of precursor chemicals is critically important. The effectiveness of law enforcement to enforce the laws regulating these chemicals is likewise important, as is the manufacturer's ability to circumvent the laws in countries where precursor chemicals are obtained -- and in the countries where the final product is manufactured and sold.

Methamphetamine: An Introduction

Meth is a potent stimulant of the amphetamine drug class. It heightens alertness and activity, decreases appetite, induces euphoria and provokes overall feelings of increased personal power and strength. Its effects also last longer than other stimulants, such as cocaine. Meth can be fabricated into a pill, capsule, crystal or even a powder, which means the drug can be ingested, smoked, injected intravenously or snorted. The preferred method for most users is inhalation because the effects are instantaneous.
Meth has not always been illegal. Long after methamphetamine was created by a Japanese chemist in the 1890s, the German military provided the drug, under the name Pervitin, to soldiers during World War II because of its stimulating and long-lasting effects. In the 1950s, meth was prescribed in the United States to treat weight loss, narcolepsy, sinus infections and depression, and it was available over the counter as recently as the 1960s. Illicit manufacturers caught on to its popularity, and in the 1990s they began producing the drug on a larger scale.
Mexican criminal organizations began profiting in the meth market in the 1980s, when they helped U.S. criminal motorcycle gangs acquire precursor chemicals that were more strictly regulated in the United States than in Mexico. Since then, Mexican criminal groups have intensified their production efforts and have serviced the increasingly demanding U.S. meth market.
Meth remains the most widely manufactured amphetamine worldwide. According to a 2011 U.N. Office on Drugs and Crime (UNODC) report, half of all global meth seizures in 2009 -- roughly 15.8 metric tons -- were made in East and Southeast Asia. North America accounted for some 44 percent of total world seizures that same year. The UNODC 2011 World Drug Report said that at 7.5 metric tons and 6.1 metric tons, respectively, the United States and Mexico were the main contributors to the North American total.
With the February 2012 seizure of 15 metric tons of meth in Guadalajara, Jalisco state, the amount of meth confiscated in Mexico this year has already surpassed that of 2009, indicating that production in Mexico is on the rise.

Manufacturing Methods

Based on evidence obtained from raided laboratories in the United States and Mexico, it appears there are two primary methods of methamphetamine production in those countries: the phenyl-2-propanone (P2P) method and the reduction method.
Sometimes referred to as "building up," P2P is considered the more difficult of the two methods. It requires more chemicals and materials and more sophisticated chemistry. In fact, the chemical process is so technical and complex that it requires several days to complete, necessitating a skillset akin to that of licit chemists. It also entails a purification step that increases the potency of the final product. While P2P produces a more potent final product, the method is subject to the competence of the manufacturers and the quality of the chemicals being used. P2P is the method most employed by Mexican criminal organizations because its two primary requisite precursor chemicals, methylamine and phenyl acetic acid, are loosely regulated in Mexico.
Reduction is the manufacturing method primarily used in Asia and the United States. This method involves mixing ephedrine or pseudoephedrine with a few easily attainable precursor chemicals. With reduction, a manufacturer can cook a small volume of meth (a few ounces) in as few as eight hours. Indeed, the key difference between the manufacturing methods is that reduction requires less time and less sophistication than P2P, and ultimately it produces an inferior product.
It should be noted that the manufacturing method has nothing to do with production scale. Either method can be used to cook large or small quantities of the drug. It can be manufactured in a hotel, apartment, home, car trunk or backpack. However, to produce meth on an industrial scale, a manufacturer would need more space. Past seizures have taken place in large warehouses (around 1,600 square meters, or 17,000 square feet), small ranches (6-40 hectares, or 15-100 acres) or even mid-sized homes.
Cost of production also differentiates the two methods. While meth is more cheaply rendered by reduction, both methods are extremely cost effective. Depending on the price of chemicals used -- determined by the quantity of chemicals purchased and the legitimacy of the supplier -- the cost of manufacturing 1 kilogram (2.2 pounds) of meth comes to anywhere between $150 and $4,000. The use of methylamine, which is highly regulated, expensive and, as stated, only used in the P2P method, is the key factor in this price range; substituting methylamine with a mixture of methanol and anhydrous ammonia drastically reduces the cost. According to the U.S. Department of Justice's National Illicit Drug Prices Mid-Year 2009 report, the wholesale market price for meth is $19,720 per kilogram while its street value is $87,717 per kilogram. Needless to say, this is a huge markup.
But it is not necessarily the overall cost that determines the production method of Mexican criminal organizations, or any meth manufacturer. Rather, it is the availability of precursor chemicals that matters. Mexican manufacturers could save vast sums of money by exclusively using the cheaper reduction method. But the Mexican government's strict regulation of ephedrine and pseudoephedrine compels criminal organizations to use other methods, such as P2P, that require less-regulated precursor chemicals.

Precursor Chemical Regulation

While extremely cost effective, the manufacturing process has one inherent limitation: the regulation of precursor chemicals. Such chemicals have several industrial, household, chemical and medicinal uses, and they can be obtained legally through legitimate chemical suppliers around the world. As a result, lawmakers, particularly those in the United States and Mexico, have pushed to curtail access to these chemicals.
Regulations on legal chemical supplies have led meth manufacturers to obtain precursors illegally from countries with looser restrictions, such as China. China is one of the world's largest industrial chemical producers, and the country supplies vast amounts of ephedrine and pseudoephedrine to reduction manufacturers in its Asian neighbors -- and to a lesser extent, in Mexico. (India is Mexico's largest supplier of ephedrine and pseudoephedrine.) Chinese lawmakers recently enacted stricter regulations on some of the chemicals, but because the chemical production industry is so large, authorities are hardly able to divert criminally purchased chemicals.
Until recently, the Mexican government had largely refrained from regulating phenyl acetic acid, making Mexico one of the world's top importers of the chemical. According to a 2012 report by the U.S. State Department's Bureau of International Narcotics and Law Enforcement Affairs, Mexico obtains phenyl acetic acid from the Czech Republic, Switzerland, Thailand, India, Bangladesh, China and the United States. In addition, from 2011 to 2012 Mexican authorities made several large methylamine seizures from several labs in some of Mexico's westernmost Pacific states. (This further evidences Mexican manufacturers' propensity for the P2P production method.)
In January 2012, Mexican criminal organizations were also found to be shipping precursor chemicals to Central America, particularly Guatemala. Central American countries are emerging meth-manufacturing hubs because, regulations notwithstanding, authorities there are even more ineffective or disinterested in enforcing regulations. And since the product can be made anywhere and can be fabricated into a variety of forms, it is very easily transported.
For meth manufacturers, lawmakers' attempts to stop meth production and regulate the drug's requisite precursor chemicals are at best temporary obstacles. For example, meth manufacturers in the United States have begun mixing methanol and anhydrous ammonia to circumvent regulations on methylamine. These chemicals can be purchased at a variety of locations, such as hardware stores.
The volume and profit of Mexican methamphetamine producers have decreased and will continue to decrease, albeit slightly, as a result of precursor chemical regulations in the United States. Regulatory measures are reactive and have failed to stop manufacturers from finding ways around the law, giving manufacturers a distinct tactical advantage.
Mexico is the United States' biggest external source of meth -- geographic proximity determines as much -- and it will continue to provide meth to the U.S. drug market because the drug is so cheap and convenient to produce. While regulations continue to be imposed, authorities' ability to enforce these regulations has not curtailed meth production. Asia remains the most productive meth manufacturer in the world, but its criminal organizations are not impacting the supply and demand relationship between Mexican meth manufacturers and the U.S. meth market. Notably, based on recent seizures it appears the Sinaloa Federation, one of Mexico's largest criminal organizations, is emerging as the country's chief meth manufacturer.
As of May 2011 the United States was home to 1.4 million known meth users -- certainly a massive market on which criminal manufacturers can capitalize. Due to the drug's popularity and high profit margins, methamphetamine will continue to be manufactured, distributed and used regardless of regulation.