The Opioid epidemic is going through society and the solutions are complicated. In a book called Fentanyl Inc – How Rogue Chemists are creating the deadliest wave of the opioid epidemic by Ben Westhoff, published by Atlantic Monthly Press, NY, 2019, the book relates the change from plant based chemicals to synthetic based chemicals.

For a generation or more, we had a war on illegal drugs, from many perspectives it has not worked that well. However, the war has increased the amount of money, government spends on the “war”. Much of the war is based on the movement of plant based drugs – marijuana, heroin and the like. The new drugs are coming from laboratories and the formulas can be shifted to stay in the grey side of legal. Every year, the molecular structure of the drugs changes to something a little different, but still allows the user to achieve a high or no pain.

The issue is always how do drugs interact with the other parts of the body and when will the person need to achieve another high? The synthetic drugs can give a person a greater high, but the side effect is more people are dying from using the drugs, what should the government do? There are many options but what have the cartels done?

The book describes the cartels as evolving because synthetic drugs are cheaper and easier to move than plant based drugs. This means there is greater profit and less risk, because the new drugs are harder to confiscate because the laws are always one step behind the changes in molecular. For example, if the government changes the law on one formula of drug, the drug makers simply alter the formula which is just inside the law or not illegal. It is very hard for law enforcement to change quickly. In addition, the suppliers of raw materials in the chemical world interchange it with legitimate chemicals our society uses for good purposes. The practice is similar to large pharma companies, when a patent comes off a billion dollar drug, they need something in the pipeline to replace it that does similar stuff but can charge premium prices for it. For the pharma companies we think that is good strategy. For the cartels and synthetic drugs, the problem is people will die. The interesting aspect is the people hooked on drugs will find out what the other person is taking and want the high no matter the risk.

Where is the information about what drugs are more powerful than others, the academic journals which are published. The distribution is through the dark web and shipped by the courier companies who promise next day service. It is very difficult to go through the billions of shipments of packages to find the illegal ones or the ones suspected of being illegal.

The USMCA trade deal can help the distribution channels from Mexico and Canada to the US with all the legit cross border shipments, add in the illegal ones and the border is not as secure as one thinks. In China, the labs are in suburban office towers, maybe the same in the US.

Linking to dividend paying stocks, if one examines the cartel trade to a fortune 500 company, there would be many similar aspects which would ensure the long term success. Both need to be innovate, able to distribute across the country, earn the highest margins with the low risk. If you could invest in the cartels, you likely from a financial standpoint would make money. The downside is the cartel people typically have short lives because they shoot bullets at the competition and anyone who goes against them. You can not have it both ways, the better way is to invest in legal companies and enjoy the dividends in your retirement.

There are more questions than answers, till the next time – to raising questions.