How do Mexican cartels and Colombian producers divide profits and control along cocaine supply chains?
Executive summary
Colombian actors—ranging from organized crime syndicates to armed groups and rural growers—remain the primary producers of coca and initial processors of coca paste and cocaine hydrochloride, while Mexican cartels dominate procurement, transit, and wholesale distribution into the United States, often capturing the largest slice of downstream revenue [1] [2] [3]. That division of labor is fluid: Mexican groups now finance production, push agronomic changes, supply weapons and sometimes relocate refining to Mexico, all moves designed to lower costs and boost margins, even as exact profit splits remain opaque in public reporting [4] [5] [6] [7].
1. Production and the first cut: where Colombia keeps control
Colombia remains the world’s leading producer of coca and has long hosted the jungle labs that convert leaves into coca paste and cocaine hydrochloride, meaning Colombian groups control the raw-material rents and much of the initial value added at the farm and lab stages [1] [8]. Local criminal organizations, ex-guerrilla dissidents and militias often supervise cultivation and labs, extracting payment from farmers and charging for processing services, a layer of control that anchors production-based profits within Colombia even as downstream sales are externalized [7] [9].
2. The Mexican buying desk: financing, quality control and wholesale power
Mexican cartels deploy emissaries, negotiators and quality verifiers to Colombian territories to secure supply lines and set prices, effectively operating the buyer’s desk for huge cocaine volumes bound for the U.S., which gives them leverage over Colombian sellers and lets them internalize the more lucrative wholesale margins [2] [3]. Some Mexican organizations go further by financing cultivation and paying farmers in advance, a strategy that twists supply dynamics in their favor and creates clientelistic dependency among producers [4] [7].
3. Payments, weaponization and alternative currencies in the trade
To avoid moving bulky cash across borders and to cement alliances, Mexican cartels have used weapons, fuel and other contraband as barter for cocaine—an arrangement Colombian authorities say has intensified local violence and become an alternative store of value and leverage in transactions [5]. These in-kind payments represent a form of profit capture and laundering that is invisible in price-based accounting but materially shifts bargaining power toward actors who control access to those goods.
4. Logistics, refining and where the biggest margins sit
Historically Colombian groups captured margins at production and early processing while Mexican groups moved product wholesale into U.S. markets; today the largest downstream margins accrue to those controlling distribution and access to U.S. retail markets, which are mainly Mexican cartels, prompting them to seek cost reductions such as moving refining to Mexico so they can increase profit per kilo [3] [6] [2]. The economic logic is simple: shifting conversion, inventory and transport risks to suppliers or to areas under the cartel’s stronger control concentrates value with whoever owns the distribution chain.
5. Changing tactics: seeds, labs and the rise of networks over hierarchies
Mexican emissaries have introduced higher-yield coca strains and advised production practices, raising output per hectare and changing where value is created, while transnational networks—rather than single vertical cartels—now spread supply risk and allow multiple buyers (including Brazilian and other international groups) to source from Colombian producers, diffusing simple “producer vs. buyer” accounting [4] [10]. This networked marketplace increases competition among buyers but also provides resilience for traffickers, complicating who pockets what share of global cocaine revenues.
6. Violence, control and the invisible costs that erode profits
Control over routes, ports and local authorities is often enforced through violence and corruption; money spent on bribery, protection, retaliation and arms (including weapons supplied as payment) acts like a hidden tax, altering effective profit distribution and incentivizing actors to capture logistical chokepoints rather than just raw supply [5] [8]. Different groups therefore prioritize different slices of the chain—some specialize in production and local control, others in transit and market access—reflecting comparative advantages shaped by geography, capacity and risk tolerance [7] [3].
7. Bottom line, caveats and unanswered questions
Open-source reporting consistently shows a pattern: Colombia supplies and processes much of the raw cocaine, Mexican cartels buy, traffic and capture the largest downstream margins, and both sides blur roles through financing, arms-for-drugs deals and shifting refining locations to maximize profit [1] [2] [5] [6] [4]. However, public sources do not provide precise percentage splits of profits along the chain—estimates vary by route, cartel, year and the clandestine accounting of barter payments—so any numerical division remains speculative based on available reporting [9] [10].