Marketplace Special Series: Underground Economy


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November 13, 2001 Pot to Your Door, In 30 Minutes or Less RealAudio The White House Office of Drug Policy estimates that last year Americans spent more than $67 billion on illegal drugs, down from almost $100 billion a decade ago. And while reliable statistics about the current size of New York City’s drug industry are hard to come by, it is certainly a multi-billion-dollar-a-year business. In the third part of our weeklong look at the inner workings of the “Underground Economy,” Marketplace’s Stephen Henn reports how the Big Apple, always on the cutting edge of new business innovations, has updated its thriving illegal drug market. It’s the way that drug dealers have adapted that’s interesting. Knowing New Yorkers -- who are mostly carless and love ordering in -- dealers have taken a page from grocery stores, delis and restaurants. For thousands of New Yorkers, illegal door to door drugs are just a phone call away. Jody, who understandably doesn’t want to use her real name, spent last summer delivering pot to customers in uptown Manhattan. And as she wrote in her diary during her summer of selling drugs, "It’s not bad work if you can get it." Jody: "I’m feeling an incredible affinity for this job lately -- three day work week, ambling around the city, looking at people in shop windows, dogs, trees, going into everyone’s apartments and seeing how they live, handling thick piles of cash, feeling like a general bad ass." Jody dressed the part. Skirts below the knees -- and scholarly, square glasses. When you are delivering drugs door to door, discretion is key. Drug runners, with pockets full of cash and satchels stuffed with marijuana, need to disappear into crowds. It’s a necessity of doing business.” Jody: "How many times in your life have you counted out $3,000 or $4,000 in cash? To be dealing with that kind of wad every day -- there is something sort of thrilling about it, you know, especially if you are in a really fancy apartment and some bald rich guy in his underwear is handing it to you out of a little black satchel." This particular customer was a good one. Never mind that he didn’t bother to wear pants. This is not Avon calling. But back to business. Jody: "Once a year this guy comes into town making big buys. He lived in an extraordinarily fancy apartment with a killer view of the city, and he lived part of the year on a yacht. And he would order a lot at a time. You’d get this really good feeling because we were making commission, basically." And sometimes couriers like Jody could pocket $1,000 in one-stop -- selling pot. This customer didn’t know Jody, and he didn’t have to because Jody was just a "mule" -- the drug world’s equivalent of a pizza delivery boy. Jody’s company has dozens of runners like her and close to 4,000 regular clients. It works like this: Customers call a number, often a thinly disguised answering service." Answering Machine: "Thank you for calling Special Reserves Promotions. We are open for 2 p.m. to 10 p.m. Please leave a numeric message -- no voice messages." A few minutes later, a dispatcher calls back, asks for a code and sends the drug order on its way. Cohen: "Wow, if only companies like Kozmo.com could have been in that business, they’d still be in business today, right." Larry Cohen is a marketing consultant who works on contract for technology firms in Seattle and San Francisco. He says it’s pretty clear at least some dealers in New York are bringing real-world business experience to the table. Cohen: "That is a great example of focusing on distribution -- and that is key." Jody’s company had a very "corporate" approach. They had a database, tracking customer buying habits, bonuses for customers who referred new clients. And, as with any selling job, Jody had to be accountable. She filled out detailed paperwork about her transactions at the end of her shift. Jody: "It was like inventory. We had to mark down what we started with, what we ended with, how many freebees we had given away -- because if you bought six you got one free, so we had to keep track of that." Jody had expense reports and was reimbursed. If Jody's company ever had a Christmas party, the room would have been packed. There were employees from inventory, warehouse workers, dispatchers and other couriers. There was even a company lawyer to call if Jody was busted -- but it never happened to her. Not being arrested is one of the little secrets about the drug delivery business in New York. If you don’t deal in public, it’s not much of a problem, according to anthropologist Travis Wendel, who studies the drug industry at John Jay College of Criminal Justice in New York City. Wendel: "I’ve said to narcotics officers in the past that you are never going to eliminate the drug markets. And they accept that. What you need to do is train your drug dealers not to bother people. The rise of the delivery industry represents the NYPD -- maybe not consciously -- training drug dealers not to bother people who don’t want to buy drugs." Wendel believes New York City police enforce drug laws almost like nuisance ordinances. As long as dealers aren’t too obvious, and aren’t bothering their neighbors, they can go about their business. The NYPD decline to speak to Marketplace. But their annual reports show, while New York’s finest spend a lot of time busting juveniles for smoking joints in public, felony drug arrests have actually fallen off since the mid-1990s. And according to Travis Wendel, while it may have gotten a lot more difficult to smoke pot in public these days, delivering drugs to the privacy of peoples homes has -- if anything -- made the business a whole lot easier. In New York, I’m Stephen Henn for Marketplace. Back to the main Underground Economy page...