Why the Biden Administration's Nicotine Ban Could Be a Boon for Drug Cartels

June 9, 2023

A Biden administration proposal to sharply limit the amount of nicotine in cigarettes may have the unintended consequence of boosting Mexican drug cartels.

The rule, which the Food and Drug Administration is expected to finalize in this fall would effectively ban cigarettes as they are currently made in the United States, forcing the business underground.

Observers say this could be a boon for criminal syndicates involved in the illicit tobacco market, which the State Department has called "a growing threat to U.S. national interests" that has "been linked to the financing of terrorist organizations."

The Biden administration’s proposed rule comes as the White House grapples with the largest border crisis in American history. Law enforcement has recorded more than 5.5 million illegal border crossings since President Joe Biden took office, as well as a surge of drugs that include the deadly opioid fentanyl.

"Along our open borders it's not just sex trafficking, criminals and fentanyl coming through. Other items are smuggled, including tobacco and cigarettes," Rep. Paul Gosar (R., Ariz.) told the Washington Free Beacon. "The Biden policies will supercharge the illicit tobacco market and serve as a gift to the same cartels that are killing thousands of Americans."

The Government Accountability Office, a federal watchdog agency, concluded in 2017 that smuggled untaxed cigarettes provided a cash stream to "organized crime" and "international criminal organizations that use the smuggled cigarettes to launder money." As much as 21 percent of all cigarettes consumed are untaxed, one study found. The current illicit cigarette market costs local and state governments up to nearly $7 billion a year.

House Republicans have pledged to block the rule, which would require all cigarettes sold domestically to have a "negligible" amount of nicotine, the organic drug found in tobacco. Altria, the second-largest tobacco company in the country, previously said the FDA rule would constitute a "de facto ban of all cigarettes." Last month, the House Appropriations subcommittee that oversees the FDA’s funding, approved a 2024 spending bill that reverses the menthol and nicotine ban.

A group of Republican senators called on the White House in May to sanction Tobacco International Holdings over its alleged affiliation with the Jalisco New Generation Cartel. The Swiss-based tobacco company, according to the lawmakers, is the subject of a Mexican government investigation over its monopolization of the tobacco market that was allegedly made possible by threats from the criminal organization.

The Jalisco New Generation Cartel, considered one of Mexico’s deadliest, is accused of murdering eight call center agents who worked for a phony call center that scammed American tourists.

The potential revenue stream for cartels is the latest example of how new cigarette regulations could create unintended consequences. Law enforcement veterans have warned that other proposed regulations, such as a ban on menthol cigarettes, could disproportionately harm the black community.

A variety of left-wing activist groups, including the ACLU, wrote in a 2021 letter to the White House that the new regulations on menthols "have serious racial justice implications" and cited the death of Eric Garner, a black man who was killed by an NYPD officer in 2014 during an altercation over the sale of untaxed cigarettes. The National Survey on Drug Use and Health found that nearly 85 percent of black smokers prefer mentholated cigarettes, compared with just under 30 percent of white smokers.