Abstract
This paper draws on the emerging economic theory of organized crime to investigate the role organized criminal gangs play in outdoor illicit cannabis cultivation in New Zealand. Organized criminal groups are most likely to control illicit markets where there are cost advantages from larger-scale production, the need for specialized skills, capital equipment or large amounts of startup capital, and visible targets for violence aimed at discouraging competition. Examination of the illicit production of cannabis suggests the productivity gains that could be achieved from larger-scale cannabis cultivation are undermined by the difficulties of monitoring crops, the vulnerability of crops to ground and aerial detection, and legal penalties based on size of crop. The effectiveness of violence in discouraging competition in cannabis cultivation is constrained by the difficulties of identifying rival cultivators and discovering the location of rivals’ cannabis plots. Several reasons are put forward to explain why the New Zealand police nevertheless claim that cannabis cultivation in New Zealand is controlled by gangs.
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