34 Americas

The Expansion and Diversification of Mexican

Cartels: Dynamic New Actors and Markets

The Latin American transnational criminal land- diversified the CJNG’s revenue streams and
scape is undergoing a profound, violent evolution. allowed it to enhance its military capacities, which
As it transforms, the organisations able to adapt, are evident in the countless videos the group posts
diversify and exercise territorial control are imposing on social media featuring its members armed with
new operational paradigms across the hemisphere. machine guns, tanks, body armour and armoured
Traditionally, cartels controlled limited geographic vehicles. The organisation has formed new alliances
areas and moved a single product, usually cocaine. from a position of strength as it has expanded its
The new transnational criminal elite, however, move global reach. Among others, it has forged new
multiple products far beyond the geographic and partnerships with Brazil’s First Capital Command
market confines of the recent past (see Figure 1). (PCC) for port access and weapons; emerging
Ecuadorian gangs due to their control of prime real
The CJNG now leading the way estate in illicit pathways in that country; and the
The Cartel Jalisco New Generation (CJNG), based Italian ’Ndrangheta and other European organised-
in Jalisco, Mexico, leads these paradigm shifts. The crime groups to expand illicit markets and diversify
CJNG is known for its violence and military skills money-laundering operations.
in combating both rival cocaine cartels and the The CJNG’s main rival in the contest for diversi-
Mexican state. Beyond moving tonnes of cocaine fication and territorial control is the more traditional
to the United States and European markets and and older Sinaloa Cartel. The CJNG is widely viewed
laundering billions of dollars in illicit proceeds, the as more aggressive, ruthless and less willing to nego-
CJNG has grown into a multifaceted, transnational tiate with rival power centres when moving into new
criminal structure. As the US Drug Enforcement territory than the Sinaloa organisation. Though it has
Administration (DEA) noted, ‘internationally, the been pushed out of many territories in its heightened
Jalisco Cartel has a presence and influence through struggle for routes and dominance with the CJNG,
associates, facilitators, and brokers on every conti- the Sinaloa Cartel remains formidable in the cocaine,
nent except Antarctica’.1 methamphetamine and fentanyl trades. The CJNG
The CJNG’s current documented activities began as an offshoot of a Sinaloa Cartel ally, the
comprise, among other things, supplying Milenio Cartel, more than a decade ago. A series of
methamphetamine and fentanyl to the growing further divisions and arrests led to the CJNG’s forma-
market in the US; sourcing precursors from China, tion. It fought several bloody wars with the Sinaloa
India and Turkiye; controlling illicit gold-mining Cartel, the Los Zetas cartel and other rival groups in
operations in Ecuador and Venezuela in alliance with Mexico as well as the Mexican state.
Colombian and Venezuelan criminal groups; gaining Both the CJNG and the Sinaloa Cartel began as
access to and partial control of key ports in Mexico, cocaine- and marijuana-trafficking organisations,
Central America and the Southern Cone; expanding and both traditionally confined their criminal econo-
cocaine-distribution networks and money- mies to moving cocaine from Central America across
laundering operations into Europe with the Italian Mexico and into the US market. They remain among
’Ndrangheta; controlling new operational centres the top cocaine-trafficking organisations in the
in Argentina, Brazil and Paraguay; controlling key world. Over the past five years, the Sinaloa Cartel
human-smuggling and human-trafficking routes has established close ties with the Colombian-based
through Central America and Mexico; and driving National Liberation Army (ELN) guerrilla group,
the multibillion-dollar counterfeit-pharmaceutical currently mostly operating in Venezuela under the
trade by disguising its synthetic-drug products protection of the Maduro regime, which gave it
as pharmaceuticals. These myriad activities have access to border jungle areas in exchange for military
 Regional Spotlight: Americas 35

Sinaloa Cartel
UNITED
China: A (Local fentanyl-precursors STATES
producers)
BC D
CJNG F A
Italy: BB ‘Ndrangheta: C (Illicit market expansion and money laundering) E
China: D (Local fentanyl-precursors producers)
India: E Turkiye: F

Gulf of Mexico
MEXICO

Americas
1
Caribbean
Sea North
4 Atlantic
HONDURAS 5 4 6 Ocean
3
3 2
2
VENEZUELA
1 COLOMBIA
Pacific Ocean
9 ECUADOR
5
7

PERU BRAZIL
11
BOLIVIA

Sinaloa Cartel
Colombia: 1.1 Gulf Clan Venezuela: 4. 4 ELN
10 10
(cocaine supply) 2.
2 ELN 3.
3 (cocaine supply)
EMC (cocaine supply) Ecuador: 5.5 Los Choneros PARAGUAY
(cocaine-route protection and
territorial control) 10
CJNG 8
Honduras: 1. 1 MS-13 (production 8 Local criminal
Argentina: 8. URUGUAY
of drug supply is often outsourced groups (drug trafficking, port CHILE
to this group) access and money laundering) South
ARGENTINA Atlantic
Colombia: 2. 2 Gulf Clan (cocaine Ecuador: 9. 9 Local criminal Ocean
supply) 3. 3 ELN (cocaine supply) gangs, including Los Lobos (real
4 EMC (cocaine supply)
4. estate, illegal gold mining and
5 Second Marquetalia
5. financial support)
(cocaine supply) Paraguay, Uruguay, Chile:
Venezuela: 6. 6 Colombian NSAGs, 10 Local criminal gangs (drug
10. Main Mexican drug-trafficking organisations’
most notably ELN, and local trafficking, port access and transnational connections and operations
criminal groups (cocaine and illicit money laundering)
gold mining) Bolivia: 11 PCC (production of Sinaloa Cartel
Brazil: 7.7 PCC (port access and drug supply is often outsourced CJNG
weapons, and to a lesser extent to this group)
illicit-drug supply) Main coca-crops areas

Note: Arrow width indicates comparative significance of the relation.

Sources: OjoPúblico; IISS analysis ©IISS

Figure 1: Main Mexican drug-trafficking organisations’ transnational connections and operations

and economic support. As the ELN pushed into the in Latin America’, introducing new extra-regional
cocaine trade, the Sinaloa Cartel became its primary actors and economic prospects. As an opportunistic
international ally to move product to market. enterprise, the CJNG added additional products to
However, global markets have shifted and its global portfolio. Although there is little hard data
expanded beyond cocaine, as described in The Armed to quantify the values of the surging global synthetic-
Conflict Survey 2023 Americas Regional Spotlight drug market, the United Nations and the US DEA
essay, ‘Shifting Dynamics and New Conflict Zones believe that the sheer volume of users and ease of
36 Americas

production have expanded the market so much that groups (NSAGs) that raise tens of millions of dollars
it now rivals the global cocaine market in importance. a year, extorting protection money from thousands
The Sinaloa Cartel is engaged in some of these new of small businesses that operate in territories con-
markets, but it does not command the market share, trolled by the groups. The groups’ territorial control
global reach or sophistication of its rival. One recent also allows them to raise millions of dollars through
study of synthetic-drug trafficking in Latin America the local retail sale of cocaine and synthetic drugs in
found that the CJNG and the Sinaloa Cartel buy their areas of dominance, provided by the Mexican
and move synthetic drugs in bulk, getting paid a groups, who often pay the gangs in product rather
premium for their services, but, once the drugs are than cash.3 The groups’ diversification goes beyond
sold wholesale, retail of the drugs falls largely to local drugs to other commodities. Los Lobos, for instance,
criminal networks. This keeps the high-profit part of also directly controls at least 20 centres of illegal
the supply chain in the hands of the cartels but leaves gold mining, using CJNG muscle and support to
the labour-intensive, lower-profit side of sales to local push out smaller local groups. The group report-
groups looking for ways to move up in the drug- edly collects protection money, known as vacuna,
trafficking structural pyramid. from another 30 mines. In each place, ‘the criminal
structure has established ties to the police, military,
Ecuador: the violent-rivalry epicentre state agents and the justice system to guarantee its
The two Mexican cartels’ power and their conflict are protection and impunity’.4 This trade is particularly
most visible in Ecuador, which for decades had been valuable to Mexican cartels because gold can easily
one of the least violent countries in the hemisphere. be used to launder illicit proceeds into an economy
The CJNG and the Sinaloa Cartel now compete there that is dollarised.
for territory, allies and routes; access to ports and These groups and their Mexican allies showed
the Panama Canal; control of cocaine-production their power in the 9 August 2023 assassina-
centres on the Colombia–Ecuador border and cocaine tion of leading presidential candidate Fernando
warehouses in Ecuador; and control of the poorly reg- Villavicencio, gunned down in the capital of Quito
ulated banking system operating in US dollars that following a campaign event. Ecuadorian investi-
has made Ecuador a money-laundering hub. gators say the assassination of Villavicencio, an
Violence is driven by the contest between the outspoken anti-corruption candidate, was planned
two largest local gangs in Ecuador – Los Lobos and in the Cotopaxi prison by Los Lobos with the
Los Choneros, allied with the CJNG and the Sinaloa CJNG’s backing and carried out by Colombian
Cartel respectively – as well as the CJNG’s aggres- hitmen hired by the Mexican cartel. In January
sive push into new areas controlled by local gangs, 2024, a series of bloody events led President Daniel
cocaine-trafficking groups linked to the former Noboa to declare a 60-day ‘state of exception’
Revolutionary Armed Forces of Colombia guerrillas, followed by an indefinite and unprecedented dec-
and an assortment of criminal bands. In 2023, for the laration of a ‘state of internal conflict’, allowing the
first time ever, Ecuador claimed the title of the most military to deploy to the streets and take over the
violent country in Latin America, with the national nation’s prisons.5
homicide rate rising by 74.5% year-on-year from 22.5
per 100,000 inhabitants in 2022 to 44.5 in 2023. The Synthetic drugs in diversification plans
homicide rate rose by 800% over the past five years.2 The expansion of both the CJNG and the Sinaloa
Both the older and more established Los Cartel pushed illicit markets toward the synthetic-
Choneros – which takes its name from its original drug trade, which now rivals cocaine as a bedrock of
hometown of Chone – and Los Lobos provide route cartels’ business models. Synthetic-drug consump-
protection and territorial control for their respec- tion is on the rise, is highly addictive and is often
tive Mexican allies. The Mexican cartels supplied lethal. It is now considered by the US and much of
weapons, military training and financing to the Latin America to pose a greater health danger and
Ecuadorian groups to fight for vital illicit pathways conflict risk than cocaine. The director of the US
along the coast, primarily centred on the main port DEA said the agency’s ‘top operational priority is to
of Guayaquil. This allowed the once-local street relentlessly pursue and defeat … the Sinaloa Cartel
gangs to evolve into powerful non-state armed and the Jalisco Cartel[,] … [which] are primarily
 Regional Spotlight: Americas 37

responsible for driving the current illicit fentanyl that the CJNG and the Sinaloa Cartel will continue
and drug poisoning epidemic in the United States’.6 increasing their territorial control and product
Synthetic drugs, primarily methamphetamine placement, with the accompanying violence their
and fentanyl, offer several advantages in compari- rivalry brings. With the CJNG now visible on
son to cocaine and heroin for cartels. As the UN the ground in Argentina, Chile, Paraguay and
Office on Drugs and Crime (UNODC) found, syn- Uruguay in drug-trafficking, port-access and
thetic drugs incur lower operational costs, face money-laundering activities, these countries risk
fewer production impediments, have a lower risk following Ecuador’s path toward rising violence
of interdiction, are not tied to a fixed geographic and empowered local gangs.9 None of these coun-

Americas
location or climate conditions, and have shorter tries are prepared for NSAGs’ rapid emergence as
production times. These are significant advantages significant forces in the near term, as they lack the
to trafficking structures with global reach and alli- necessary law-enforcement training, banking reg-
ances, and the premier group of that nature is the ulations, anti-money-laundering and other legal
CJNG. The Mexican cartels import precursor chemi- frameworks, and overall situational awareness of
cals and produce their own synthetic drugs, usually the dynamics of the evolving criminal economies.
in the form of pills that cost ten cents to make and Beyond the growing synthetic-drug trade, other
are sold for US$5–U$25 each.7 While the Mexican illicit economies are expanding, both through crimi-
groups function as the CEOs in these drugs supply nal hydras like the CJNG and through local and
chains, much of the actual production is farmed regional groups that control specific territories that
out to smaller criminal groups such as the Mara make these economies viable. These include wild-
Salvatrucha (MS-13) gang in Honduras and the PCC life trafficking; the swelling human-smuggling and
in Brazil and Bolivia.8 human-trafficking business; the unregistered move-
A study of the precursor flow into Mexico iden- ment of strategic minerals such as lithium, cobalt
tified two provinces in China as producing and and rare-earth minerals; and counterfeit pharma-
exporting most precursors reaching Latin America ceuticals. All these markets have enormous growth
largely via cargo ships. The products arrive in potential where the model of territorial control,
Mexico camouflaged through mislabelled bills of coupled with alliances between super groups like
lading, front companies and false invoices, and are the CJNG and local groups, is likely to succeed. At
protected by webs of corruption. The chemicals are the same time, states under siege have struggled to
marketed and sold on the internet and dark net successfully challenge the Mexican cartels and their
through networks of fixers who keep the CJNG and seemingly endless financial resources, willingness
other groups’ production facilities supplied. to resort to extreme violence and almost blanket
impunity. Given its proven ability to embrace new
More diversification on the horizon economies far from the traditional cocaine-based
The expanding illicit economies and the weak model, the CJNG will likely be the dominant illicit
state responses to these challenges make it likely actor in the hemisphere for the foreseeable future.

Notes
1 US Department of Justice, ‘Statement of Anne Milgram, 4 ‘Narcomafias del oro: grupo criminal Los Lobos opera más
Administrator, Drug Enforcement Administration, U.S. de 20 minas en Ecuador’ [Gold narcomafias: the Los Lobos
Department of Justice, Before the Senate Committee on Foreign criminal group operates more than 20 mines in Ecuador], Ojo
Relations, for a Hearing Entitled “Countering Illicit Fentanyl Público, 7 January 2024.
Trafficking”’, 15 February 2023. 5 The immediate cause of the January wave of violence was
2 Juliana Manjarrés and Christopher Newton, ‘InSight Crime’s the discovery that José Adolfo Macías Villamar, alias ‘Fito’,
2023 Homicide Round-up’, InSight Crime, 21 February 2024. the leader of Los Choneros, had escaped from a prison he
3 This summary is drawn from author interviews with police had turned into a luxury resort. According to Ecuadorian
intelligence officials and transnational-organised-crime experts police intelligence officials, Macías probably escaped before
in Quito, Ecuador, March 2024. Christmas, at least two weeks before he was declared a
38 Americas

fugitive. The ensuing prison raids set off coordinated riots BBC News, 9 January; and author interviews in Quito,
in six prisons, the takeover of a major television station Ecuador, March 2024.
in Guayaquil by a group of armed men threatening to 6 US Department of Justice, ‘Statement of Anne Milgram,
kill the employees on live television, and the kidnapping Administrator, Drug Enforcement Administration, U.S. Department
of several policemen. Cristina J. Orgaz, ‘Quien es Adolfo of Justice, Before the Senate Committee on Foreign Relations, for a
Macías, “Fito”, cuya fuga de una prisión en Ecuador llevó Hearing Entitled “Countering Illicit Fentanyl Trafficking”’.
al presidente Noboa a declarar el estado de excepción en el 7 Ibid.
país’ [Who is Adolfo Macias, ‘Fito’, whose escape from a 8 The author visited an MS-13 methamphetamine laboratory
prison in Ecuador led President Noboa to declare a national in San Pedro Sula, Honduras, in August 2023, controlled by
state of exception], BBC News, 9 January 2024; ‘Los rehenes the CJNG, which bought the product for resale on the local
contaron como fue la toma del canal de TV en Ecuador: market, in Mexico and in the US. In author interviews with
“Hemos vivido el terror en vivo”’ [The hostages tell how the Brazilian police intelligence in November 2023, the officials
TV station in Ecuador was taken: ‘We lived the terror live’], possessed documentation of PCC methamphetamine and
Infobae, 9 January 2024; Vanessa Buschschlüter, ‘Ecuador fentanyl production.
Prisoners Take Guards Hostage After Drug Lord’s Escape’, 9 Author interviews in each country, June–November 2023.
Regional Spotlight: Americas 39

Americas