B.4 COCAINE

LEGAL SOURCES AND LEGAL DISTRIBUTION

Controls on the possession and distribution of cocaine are specified in the Narcotic Control Act and the Narcotic Control Regulations. The Regulations state that only a duly authorized "licensed dealer" may "manufacture, import or export, sell, give, transport, send, deliver or distribute a narcotic", including cocaine. Medical practitioners may only administer, prescribe, give, sell, or furnish cocaine to patients who are under their professional care and who require this drug for the condition for which they are receiving treatment. Hospitals are prohibited from dispensing or administering cocaine without the written order or prescription of a medical practitioner. Pharmacists may supply cocaine to hospitals and, upon receipt of written or verified verbal prescriptions, to private persons.

Penalties with regard to the unauthorized sale or possession of narcotic drugs, including cocaine, are specified in the Narcotic Control Act. Cocaine stocks and records of all transactions of licensed dealers, doctors, hospitals and pharmacists must be open to Department of National Health and Welfare inspection according to the Narcotic Control Regulations. All thefts from the above parties must be reported to the Minister of National Health and Welfare.

During the years 1961 to 1971 the estimated annual medical consumption of cocaine fluctuated between a high of 32.627 kilograms in 1965 and a low of 25.715 kilograms in 1970.3

LEGAL SOURCES AND ILLEGAL DISTRIBUTION

Although only relatively small amounts of cocaine are legally used in Canada, there are still thefts of this drug nearly every year. According to the Bureau of Dangerous Drugs, in 1968 and 1969 five and six ounces of cocaine, respectively, were stolen in Canada.12, 14 In 1970 nearly 15 ounces were stolen and, in 1971, thefts of cocaine rose to approximately 23 ounces. This latter figure represents about one-fortieth of all the cocaine legally used in Canada in 1971.

ILLEGAL SOURCES AND ILLEGAL DISTRIBUTION

ILLEGAL SOURCES AND PRODUCTION
The primary source for illicit cocaine reaching Canada is South America, particularly Bolivia, Peru, Chile, Colombia and Ecuador.27 Since 100 kilograms (220 pounds) of coca leaves yield only about one kilogram (2.2 pounds) of refined cocaine,7, 29 the extraction process (which takes from three to four weeks) is conducted as close to the growing areas as possible in order to reduce the weight of smuggled goods.27 If it is too difficult to complete the extraction process in these remote areas, the leaves are macerated with lime (yielding a pulp or paste which is still lighter than the leaves) and then carried further down the mountain where the extraction is completed.8 The drug may cross various borders as raw leaves, paste, or as refined cocaine hydrochloride powder.29

ROUTES AND ORGANIZATION WITHIN SOUTH AMERICA

Much of the coca leaf and cocaine produced in South America is transported through that continent to serve indigenous users (see Figure B.8).* Bolivian coca products are often smuggled into Brazil, Paraguay and north western Argentina (where a large number of Bolivian coca leaf chewers live and work), or along river routes through these countries to Uruguay. Cocaine reaching Brazilian, Argentinian and Uruguayan ports may then be smuggled into North America and Europe.29 Some Bolivian leaves and paste are also transported into northern Chile for final processing and eventual export or shipment to southern distribution centres.27, 29

Illegal cocaine laboratories have also been found in Peru, Colombia and Ecuador.27 From southern Peru the refined cocaine may be smuggled to Brazil, Bolivia or northwards through Colombia. This cocaine may then be shipped to North American and European markets. The Peruvian paste (as opposed to refined cocaine) may be transported northwards to Ecuador for final refinement and then to Colombia and Venezuela for domestic consumption and international shipment. Some Peruvian cocaine is shipped directly from northern Peru to Panama and North America."

The numerous illegal cocaine laboratories in Peru, Bolivia, Chile, Ecuador and Colombia are independent enterprises which do not restrict their sales to individual syndicates.27 The market is generally not well organized or tightly controlled and cocaine buyers need not establish criminal credentials before purchasing the drug.1

ROUTES AND ORGANIZATION OUTSIDE SOUTH AMERICA

* In the major producing countries of Bolivia and Peru (where coca plant cultivation is legal), production of coca leaf is officially estimated at 13,000 tons per year. International medical, scientific and industrial (soft drink flavouring) needs are estimated to be 300 tons of coca leaf (i.e., about three tons of cocaine) per year. "Consequently", according to the United Nations Commission on Narcotic Drugs, "at least 97 per cent of the world production serves no useful purpose".25

Before the Cuban revolution Havana was a major trans-shipment point for Bolivian and Peruvian cocaine, as well as European heroin.8 The situation has since changed and cocaine is now more likely to be transported by hired seamen and diplomats (acting as couriers) or private entrepreneurs. The United States Bureau of Narcotics and Dangerous Drugs claims that their,

. . . investigation of Chilean traffickers has revealed the existance [sic] of a well organized, highly sophisticated international narcotics smuggling organization. . . which is responsible for smuggling vast amounts of French heroin and Chilean cocaine to United States recipients.'

Organizations such as this recruit seamen couriers to transport the cocaine to various United States port cities (particularly east-coast cities such as Miami, Savannah, Norfolk, Baltimore, Philadelphia and New York), or hire individual couriers (such as diplomats or pilots) to carry the cocaine into European, Canadian, Mexican and American ports of entry via commercial airlines. According to the American Bureau of Narcotics and Dangerous Drugs, these couriers are usually paid $1,500 per kilogram for United States deliveries and $500 for each kilogram of cocaine delivered to Canadian and Mexican cities. In the latter case, additional couriers are then hired to cross the Canadian-American or Mexican-American borders.28 Several air freight lines have also been utilized to smuggle cocaine into the United States via Panama to Miami, the major port of entry.28

Although the United States probably represents the largest single cocaine market outside of South America, there is considerable traffic in the drug in Mexico,8 parts of Europe 29 and the Middle East.8' 18 Police seizures of cocaine in India, Poland and New Zealand in 1969 indicate the international nature of such distribution.26 The Canadian market is relatively small, although the demand for cocaine is certainly increasing among youthful multi-drug users. According to Commission sponsored field investigations, most of the cocaine available in Canada is purchased by individual entrepreneurs in large American cities or is imported, in small amounts, from Peru, Bolivia, Ecuador or Chile.8, 19 Although these persons may establish United States or South American dealing contacts which are utilized on several occasions, they do not represent permanent and well organized criminal syndicates of the type which characterize the heroin trade and much of American cocaine trafficking.

SEIZURES

While police seizures, at best, only account for between five and ten per cent of the amount of illicit drugs actually distributed,25 they still serve as a useful index of changes in trafficking patterns. Statistics on seizures in the United States since 1966 indicate the recent and growing popularity of cocaine in North America (see Table B.9). From these figures (which represent only federal Bureau of Narcotics, and Dangerous Drugs seizures) it appears as though cocaine distribution is accelerating in a fashion similar to that experienced by cannabis a few years ago. According to the R.C.M. Police, Canadian cocaine seizures have risen consistently from an "unappreciable quantity" in fiscal year 1969/70 to 2.65 pounds in 1971/72.22 Total Canadian distribution, however, is unlikely to exceed 150 kilograms a year, while the B.N.D.D. has estimated that twice this amount may be smuggled into the United States every month.l. 28

PRICES AND DISTRIBUTION

While the American cocaine market appears to be ultimately controlled by organized criminal syndicates, there is presently no evidence of such systematized and monolithic control in Canada. Cocaine is increasingly available in Canada's larger urban centres (particularly Montreal, Ottawa, Toronto, Winnipeg and Vancouver), but it is unlikely that a single importation exceeds five kilograms and the largest Canadian sales are usually fractions of a pound.

Canadian cocaine importers are generally young adults who have had extensive experience in dealing (and occasionally importing) drugs such as marijuana, hashish, hallucinogens and, very rarely, opium. These persons, either individually or in small groups, travel to the cocaine growing or refining countries in South America where they arrange to purchase 'pure' cocaine for between $1,000 and $3,000 a kilogram. (In the larger South American cities, a kilogram of cocaine may cost as much as $5,000 if the middlemen cannot be bypassed.) Transportation, hotels and incidental expenses may add as much as $3,000 to each of these buying expeditions.

The cocaine is then smuggled into Canada, usually by commercial plane or air freight, through various resourceful methods. Additionally, small shipments of cocaine are occasionally mailed to Canada from South America or, if possible, a less conspicuous posting location. The powdery composition of the drug and its very high per-weight value make small quantities of cocaine easy to hide and, consequently, difficult for customs officials to detect. Despite the increased smuggling of this drug, a large importation seizure has yet to occur in Canada.

Upon arrival at its Canadian destination the pure cocaine is divided among those who subsidized the purchase. Some of this pure cocaine is occasionally distributed to other dealers (some of whom may operate in other cities) for between $12,000 and $14,000 a pound, but most of it remains with the importers who initially dilute the drug with lactose or dextrose by 50 to 100 per cent and sell it in ounces to local sub-dealers.

In American cities the distribution network is somewhat different as importing syndicates sell pure kilograms to large distributors who, in turn, sell diluted pounds, or parts thereof, to dealers lower in the cocaine distribution hierarchy. The United States prices are also lower than those in Canada, perhaps reflecting the greater availability of the drug. As reported by Woodley,

In the illegal drug business, cocaine is sold cut [diluted] in $10 or $20 capsules...; teaspoons [between $65 and $75] and tablespoons [$150] ...; "pieces", which are four tablespoons, or about an ounce [$550]; parts of "keys" (kilograms, 2.2 pounds) from eighths, quarters [about $4,500], halves, all the way to whole keys of pure cocaine, which cost, in New York anywhere from $14,000 to $20,000."

In contrast, Montreal and Toronto cocaine distributors ordinarily sell approximately 50 per cent pure cocaine for around $750 an ounce (pure ounces, which are very rarely available, command at least $1,000 each), while similarly diluted half- and quarter-ounces are sold for between $400 and $500 and $200 and $300, respectively. The purchaser of these 'weights' is likely to further dilute the drug and sell it in grams (for between $40 and $60 each, depending on its purity and the number of grams bought simultaneously) or half-grams (at between $25 and $35 each). If cocaine were commercially available from a pharmacist, his normal mark-up would indicate a retail price of no more than $50 an ounce.

The relatively unorganized nature of the Canadian cocaine distribution system is reflected in the irregular availability of the drug and the lack of price, purity and quantity standardization even within the same city. As the cocaine-using population (almost all of whom occasionally 'snort' rather than inject the drug) continues to expand, the market is likely to be serviced by better organized and more experienced drug distributors who recognize the significant profits to be made from such ventures. At this time, however, the cocaine market more closely approximates the Canadian marijuana market of the early 1960s than the heroin distribution network which cocaine is erroneously but often considered a part of.

References

1. Campbell, I. Information letter to Commissioners. (Visit to Office of Strategic Intelligence, Bureau of Narcotics and Dangerous Drugs, Department of Justice, Washington.) Unpublished Commission research project, 1971.
2. Campbell, I., & Solomon, R. Interviews with officials of the United States Bureau of Narcotics and Dangerous Drugs, Washington, D. C. Unpublished Commission research project, 1971.
3. Canada, Department of National Health and Welfare, Bureau of Dangerous Drugs. Table showing estimated consumption of the main narcotics for the period 19611971 inclusive. Unpublished manuscript, April, 1972.
4. Eduardo [pseud.] Talkin' to 'the Man'. Part I. Georgia Straight (Vancouver), September 7-14, 1972: 10 & 14.
5. Eduardo [pseud.] Talkin' to 'the Man'. Part III. Georgia Straight (Vancouver), September 28-October 5, 1972: 9-10.
6. Gaffney, G. H. Narcotic drugs: Their origin and routes of traffic. In J. R. Witten-born, H. Brill, J. P. Smith, & S. A. Wittenborn (Eds.), Drugs and youth. Springfield, Ill.: C. C. Thomas, 1969. Pp. 55-61.
7. Gay, G. R., Inaba, D. S., Sheppard, C. W., & Newmeyer, J. A. "High, high, Miss American Pie". New debut for an old girl: Cocaine in perspective. Unpublished manuscript, Haight-Ashbury Free Medical Clinic, San Francisco, Calif., 1972.
8. Green, T. The smugglers: An investigation into the world of the contemporary smuggler. New York: Walker, 1969.
9. Hopkins, J. Cocaine: A flash in the pan, a pain in the nose. Rolling Stone, April 29, 1971: 1 & 6.
10. Kurke, M. I. (Chief, Information Development and Analysis Division, Bureau of Narcotics and Dangerous Drugs, Washington, D.C.) Letter to the Commission, October 16, 1972.
11. Long, D. Cocaine: Ain't it a shame. Vancouver Free Press, April 27-30, 1971.
12. McKim, T. R. (Director, Bureau of Dangerous Drugs, Ottawa). Letter to the Commission, June 9, 1971.
13. McKim, T. R. (Director, Bureau of Dangerous Drugs, Ottawa). Letter to the Commission, February 10, 1972.
14. McKim, T. R. (Director, Bureau of Dangerous Drugs, Ottawa). Letter to the Commission, November 9, 1972.
15. Narcotics Control Digest. Announcement of Customs Commissioner Myles J. Ambrose. Narcotics Control Digest, 1971, 1(9): 2.
16. New York Times. Tips from Interpol linked to seizure of 5 drug plants. New York Times, September 24, 1972.
17. New York Times. U. S. agents try but fail to stop flow of cocaine from Latin countries. New York Times, January 25, 1971.
18. O'Callaghan, S. The drug traffic. Belfast: W. & G. Baird, 1967.
19. Ouellette, K. Monitoring study field reports: Winnipeg. Unpublished Commission research project, 1971.
20. Perry, C. The star-spangled powder; or, through history with coke spoon and nasal spray. Rolling Stone, August 17, 1972: 24-26.
21. Schmeck, H. M., Jr. Cocaine is re-emerging as a major problem, while marijuana remains popular. New York Times, November 15, 1971: 74.
22. Tomalty, G. L. (Officer in Charge, R.C.M. Police Drug Enforcement Branch, Ottawa). Letter to the Commission, December 15, 1972.
23. Toronto Star. Raid nets $100,000 in cocaine. Toronto Star, June 22, 1972: 69.
24. United Nations, Economic and Social Council, Commission on Narcotic Drugs. Plan for concerted action against drug abuse. Part I. United Nations document E/CN.7/538, July 27, 1971.
25. United Nations, Economic and Social Council, Commission on Narcotic Drugs. Suggestions for short-term and long-term measures against drug abuse and illicit trafficking. United Nations document E/CN.7/530, July 28, 1970.
26. United Nations, Economic and Social Council, Commission on Narcotic Drugs. Summary of drugs seized or involved in the illicit traffic during 1969. United Nations document E/IT/1969/85, February 22, 1971.
27. United States, Bureau of Narcotics and Dangerous Drugs. Cocaine and coca leaves. Unpublished manuscript, Washington, D.C., n.d.
28. United States, Bureau of Narcotics and Dangerous Drugs. Cocaine traffic. Unpublished manuscript, Washington, D.C., 1971.
29. United States, Bureau of Narcotics and Dangerous Drugs. Drug traffic in South America. Unpublished manuscript, Washington, D.C., n.d.
30. United States, Department of the Treasury, Bureau of Customs. Customs drug seizures top $100"million. Press release, Washington, D.C., May 3, 1971.
31. United States, Department of the Treasury, Bureau of Customs. Customs drug seizures total $617.3 million in ten months. Press release, Washington, D.C., November 19, 1971.
32. United States, Department of the Treasury, Bureau of Customs. Half-billion drug seizures by customs. Press release, Washington, D.C., July 26, 1971.
33. Volsky, G. Illicit traffic in cocaine in Miami. New York Times, February 1, 1970.
34. White Mountain Press. The gourmet cokebook: A complete guide to cocaine.. New York: White Mountain Press, 1972.
35. Woodley, R. Dealer: Portrait of a cocaine merchant. New York: Holt, Rinehart, and Winston, 1971.
36. Woodley, R. The return of King Cocaine-Conversations with a coke peddler. New York, August 30, 1971: 24-29.