The illegal drug trade is a global black market consisting of the cultivation, manufacture, distribution and sale of illegal controlled drugs. Most jurisdictions prohibit trade, except under license, of many types of drugs by drug control laws. Some drugs, notably alcohol and tobacco, are outside the scope of these laws, but may be subject to control under other laws.
The illegal drug trade operated similarly to other underground markets. Various drug cartels specialize in the separate processes along the supply chain, often localized to maximize production efficiency and minimize damages caused by law enforcement. Depending on the profitability of each layer, cartels usually vary in size, consistency, and organization. The chain ranges from low-level street dealers who may be individual drug users themselves, through street gangs and contractor-like middle men, up to multinational empires that rival governments in size. The UN report said the global drug trade generated an estimated $321.6 billion in 2003. With a world GDP of 36 trillion in the same year, the illegal drug trade may be estimated as slightly less than 1% of total global commerce.
Illegal drugs may be grown in wilderness areas, on farms, produced in indoor/outdoor residential gardens, indoor hydroponics grow-ops, or manufactured in drug labs located anywhere from a residential basement to an abandoned facility. The common characteristic binding these production locations is that they are discreet to avoid of black market players, corruption is a problem, especially in poorer societies.
Consumption of illegal drugs is widespread globally. While consumers avoid taxation by buying on the black market, the high costs involved in protecting trade routes from law enforcement lead to inflated prices.
Additionally, various laws criminalize certain kinds of trade of drugs that are otherwise legal (for example, untaxed cigarettes). In these cases, the drugs are often manufactured and partially distributed by the normal legal channels, and diverted at some point into illegal channels.
Finally, many governments restrict the production and sale of large classes of drugs through prescription systems.
The trade of drugs has existed for as long as the drugs themselves have existed. However, the trade of drugs was fully legal until the introduction of drug prohibition. The history of the illegal drug trade is thus closely tied to the history of drug prohibition. In the First Opium War, the United Kingdom forced China to allow British merchants to trade in opium with the general population of China. Although illegal by imperial decree, smoking opium had become common in the 1800s due to increasing importation via British merchants. Trading in opium was (as it is today in the heroin trade) extremely lucrative. As a result of the trade an estimated two million Chinese people became addicted to the drug. The British Crown (via the treaties of Nanking and Tianjin) took vast sums of money from the Chinese government in what they referred to as 'reparations' for the wars.
Mafia groups limited their activities to gambling and theft until 1920, when organized bootlegging manifested in response to the effect of Prohibition. An example of the spectacular rise of the mafia due to Prohibition is Al Capone's syndicate that "ruled" Chicago in the 1920s.
Some governments that criminalize drug trade have a policy of interfering heavily with foreign states. In 1989, the United States intervened in Panama with the goal of disrupting the drug trade coming from Panama.-- On December 20, 1989, U.S. President George H.W. Bush ordered the U.S. military to invade Panama to "protect U.S. lives and property, to fulfill U.S. treaty responsibilities to operate and defend the Canal, to assist the Panamanian people in restoring democracy, and to" capture their long time friend, Manuel Noriega. On December 22, the Organization of American States passed a resolution deploring the invasion and calling for withdrawal of U.S. troops, in addition to a separate resolution condemning the violation of the diplomatic status of the Nicaraguan Embassy in Panama by U.S. Special Forces who had entered the building to remove the evidence of the elite involvement with Noriega. On 29 December, the UN General Assembly voted 75–20 to condemn the U.S. invasion of Panama as a flagrant violation of international law. --> The Indian government has several covert operations in the Middle East and Indian subcontinent to keep a track of various drug dealers. Opium production in Afghanistan is a current impediment in the development of an illicit economy for that country.
In the late 1990s in the United States, the FBI estimated that 5% of murders were drug-related. In addition, drug smuggling can lead to harsh penalties, including the death penalty, in certain countries (for example, Singapore).
Many including the recently sacked UK government advisor, Professor Nutt, have argued that the arbitrariness of drug prohibition laws from the medical point of view, especially the theory of harm reduction, worsens the problems around these substances.
Most of the effects of the illegal drug trade are not unique to the drug trade -- they are endemic and to be expected with any black market and should be expected to worsen with increased efforts to eliminate the market with no decrease in demand. The countries of drug production, which are usually developing countries, have been seen as the worst affected by global drug trade. The drugs are seen as a doorway to a better life; while in reality drugs produce long term consequences and problems in societies, such as health problems (spread of HIV/AIDS), and further socio-economic and political instability. []
The U.S. government's most recent 2005 National Survey on Drug Use and Health (NSDUH) reported that nationwide over 800,000 adolescents ages 12–17 sold illegal drugs during the twelve months preceding the survey; such adolescents also admitted to know or be linked to other drug dealers across the nation. The 2005 Youth Risk Behavior Survey by the U.S. Centers for Disease Control and Prevention (CDC) reported that nationwide 25.4% of students had been offered, sold, or given an illegal drug by someone on school property. The prevalence of having been offered, sold, or given an illegal drug on school property ranged from 15.5% to 38.7% across state CDC surveys (median: 26.1%) and from 20.3% to 40.0% across local surveys (median: 29.4%).
Despite over $7 billion spent annually towards arresting and prosecuting nearly 800,000 people across the country for marijuana offenses in 2005 (FBI Uniform Crime Reports), the federally-funded Monitoring the Future Survey reports about 85% of high school seniors find marijuana “easy to obtain.” That figure has remained virtually unchanged since 1975, never dropping below 82.7% in three decades of national surveys.
Many countries in the developing world have large numbers of homeless children, as a result of widespread poverty, urban migration, and breakdowns in the social service sector following structural adjustments. In large Indian cities such as Mumbai, Kolkata, and New Delhi it is estimated that there are over 100,000 street children, many of whom are involved in drug use. [Is their homelessness due to drug use, or is their drug use due to homelessness? Neutrality] In recent years, similar patterns have developed in Southeast Asia and Cambodia. Laos and Vietnam now have “substantial populations of street children [involved in] consuming drugs, living precariously with little or no family support or guardians”. These homeless children receive no education or training that would allow them to participate in national development.
According to the DEA, the price of heroin is typically valued 8 to 10 times that of cocaine on American streets. [And?] Generally in Europe (except the transit countries Portugal and the Netherlands), a purported gram of street heroin, which is usually between 0.7 and 0.8 grams light to dark brown powder consisting of 5-10%, less commonly up to 20%, heroin base, is between 30 and 70 euros, which makes for an effective price of pure heroin per gram of between 300 and 2000 euros.
The purity of street cocaine in Europe is usually in the same range as it is for heroin, the price being between 50 and 100 euros per between 0.7 and 1.0 grams. This totals to a cocaine price range between 500 and 2000 euros.
According to the Office of National Drug Control Policy, anabolic steroids are relatively easy to smuggle into the United States. Once there, they are often sold at gyms and competitions as well as through mail and internet operations.
Most of the high grade cannabis sold in the U.S. is grown in hidden grow operations indoors. The number one producer is California with an annual revenue of nearly 14 billion dollars in production, Washington state is second with 8 billion in production, Tennessee is third with nearly 5 billion in production, Kentucky is fourth with around 4.5 billion, Hawaii is fifth with close to 4 billion, 
In some areas of the world, particularly in and around the Arabian peninsula, the trade of alcohol is strictly prohibited. For example, Pakistan bans the trade because of its large Muslim population. Similarly, Saudi Arabia forbids the importation of alcohol into its kingdom, however, alcohol is smuggled in very high quantities. In other areas it is considered like any other beverage,
Pure alcohol or liquids with high alcohol content over a certain percentage or proof, calculated by volume or weight, are also banned in many countries.
The illegal trade of tobacco is motivated primarily by increasingly heavy taxation. When tobacco products such as name-brand cigarettes are traded illegally, the cost is as little as one third that of retail price due to the lack of taxes being applied as the product is sold from manufacturer to buyer to retailer. It has been reported that smuggling one truckload of cigarettes within the United States leads to a profit of 2 million U.S. dollars.
The source of the illegally-traded tobacco is often the proceeds from other crimes, such as store and transportation robberies.
Sometimes, the illegal trade of tobacco is motivated by differences in taxes in two jurisdictions, including smuggling across international borders. Smuggling of tobacco from the US into Canada has been problematic, and sometimes political where trans-national native communities are involved in the illegal trade.
The kingdom of Bhutan made the sale of tobacco illegal in December 2004, and since this time a flourishing black market in tobacco products has sprung up. In 2006, tobacco and betel nut were the most commonly seized illicit drugs in Bhutan.
Temazepam, which is a strong hypnotic benzodiazepine, is being illicitly manufactured in clandestine laboratories (called jellie labs) to supply the increasingly high demand for the hypnotic drug internationally. Most clandestine temazepam labs are in Eastern Europe. The way in which they manufacture the temazepam is through chemical alteration of diazepam, oxazepam or lorazepam. Clandestine "jellie labs" have been identified and shutdown in Russia, Ukraine, Czech Republic, Latvia and Belarus.
In the United Kingdom, temazepam is the most widely-abused legal, prescription drug. It's also the most commonly abused benzodiazepine in Finland, Ireland, the Netherlands, Poland, Czech Republic, Hungary, India, Russia, China, New Zealand, Australia and some parts of Southeast Asia. In Sweden it has been banned due to a problem with drug abuse issues and a high rate of death caused by temazepam alone relative to other drugs of its group. Surveys in many countries showed that temazepam, heroin, cocaine, MDMA, cannabis, nimetazepam, and amphetamines rank among the top drugs most frequently abused.
International illicit trade in opium is relatively rare. Major smuggling organizations prefer to further refine opium into heroin before shipping to the consumer countries, since a given quantity of heroin is worth much more than an equivalent amount of opium.[Citation?] As such, heroin is more profitable, and much stronger, because heroin metabolizes directly into the main naturally occurring psychoactive substance in opium—morphine.
Afghanistan is the world’s largest producer of opium poppy[Cite?], a plant in which the milky sap that contains opiate alkaloids, are extracted to produce narcotics such as heroin. Drug production is one of the most alarming and critical setbacks[neutrality] facing Afghanistan, which ultimately poses a threat to the regional security of the country. Eighty-seven percent of the supply of opium poppy in the world comes from Afghanistan[cite?]. Opium trade makes up approximately 40 to 60 percent of Afghanistan’s Gross Domestic Product[Cite?]. Opium in Afghanistan was outlawed under the Taliban regime, But now that U.S. forces have ousted the regime, Afghanistan leads the world in opium production.
It has been assumed that money generated from drug trade is used to enable the Taliban regime to stay in power. There has also been speculation [by whom?] that heroin profits are provided to fund al Qaeda and terrorist organizations. It has been stated [by whom?] that drug trafficking has weakened states throughout the former Soviet Union and Eastern Europe, increased public corruption, as well as putting countless [How many?] people at risk for HIV/AIDS through drug dependence [How?]. There have been plans [Whose plans?] to end narcoterrorism in Afghanistan by increasing security and law enforcement. Plans to destroy the opium poppy crop have also been discussed.
Pharmaceutical drug abuse is an increasing problem in many developing countries, with a lessening supply of, and the continuing rise of street drug prices such as heroin in India and other developing cities, many people are switching over to easily available and accessible pharmaceutical drugs without prescription. This is becoming a widespread problem in many developing countries as increased drug use can cause drug addictions. 
Heroin is smuggled into the United States and Europe from areas such as the Golden Triangle (Southeast Asia); with Afghanistan currently being "the world's largest exporter of heroin". In 2007, 93% of the opiates on the world market originated in Afghanistan. This amounts to an export value of about $64 billion, with a quarter being earned by opium farmers and the rest going to district officials, insurgents, warlords and drug traffickers.
Heroin is a very easily smuggled drug because a small, quarter-sized vial can contain hundreds of doses. From the 1930s to the early 1970s, the so-called French Connection supplied the majority of US demand. Allegedly, during the Vietnam war, drug lords such as Ike Atkinson used to smuggle hundreds of kilos of heroin to the U.S. in coffins of dead American soldiers (see Cadaver Connection). Since that time it has become more difficult for drugs to be imported into the United States than it had been in previous decades, but that does not stop the heroin smugglers from getting their product onto U.S. soil. Purity levels vary greatly by region with, for the most part, Northeastern cities having the most pure heroin in the United States (according to a recently released report by the DEA, Camden, New Jersey and Newark, New Jersey and Philadelphia, have the purest street grade A heroin in the country).
Penalties for smuggling heroin and/or morphine are often harsh in most countries. Some countries will readily hand down a death sentence or life in prison for the illegal smuggling of heroin or morphine, which are both, internationally, Schedule I drugs under the Single Convention on Narcotic Drugs.
Heroin is widely (and usually illegally) used as a powerful and addictive drug that produces intense euphoria, which often gradually disappears with increasing tolerance. This 'rush' comes from its high lipid solubility provided by the two acetyl groups, resulting in a very rapid penetration of the blood-brain barrier after use. Once in the blood stream, heroin is rapidly converted to morphine. The morphine then binds to the opioid receptors in the brain and spinal cord, causing the subjective effects. Heroin and morphine can be taken or administered in a number of ways, including snorting and injection. They may also be smoked by inhaling the vapors produced when heated from below, usually on aluminum foil (known as "chasing the dragon").
In some areas of the United States and Canada, the trade of methamphetamine is rampant. Because of the ease of production and its addiction rate, methamphetamine is a favorite amongst many drug distributors. The most common "street names" for meth are "crystal" and "ice" and "crystal meth".
According to the Community Epidemiology Work Group, the numbers of clandestine methamphetamine laboratory incidents reported to the National Clandestine Laboratory Database decreased from 1999 to 2004. During this same period, methamphetamine lab incidents increased in midwestern States (Illinois, Michigan, Missouri, and Ohio), and in Pennsylvania. In 2004, more lab incidents were reported in Missouri (2,788) and Illinois (1,058) than in California (764). In 2003, methamphetamine lab incidents reached new highs in Georgia (250), Minnesota (309), and Texas (677). There were only seven methamphetamine lab incidents reported in Hawaii in 2004, though nearly 59 percent of substance abuse treatment admissions (excluding alcohol) were for primary methamphetamine abuse during the first six months of 2004. As of 2007, Missouri leads the United States in clandestine lab seizures, with 1,268 incidents reported. Often K9 units are used for detecting rolling meth labs which can be concealed on large vehicles, or transported on something as small as a motorcycle. These labs are more difficult to detect than stationary ones, and can be often obscured with the legal cargo on big trucks.
Methamphetamine is sometimes used in an injectable form, placing users and their partners at risk for transmission of HIV and hepatitis C. "Meth" can also be inhaled, most commonly on aluminum foil or through a Pyrex test tube or light bulb fashioned into a pipe. This method is reported to give "an unnatural high" and a "brief intense rush" to its users.
In South Africa the abuse of methamphetamine has reached epidemic proportions in especially the Cape Flats area of Cape Town where it is called "tik" or "tik-tik". Youngsters as young as eight are abusing the substance where it is smoked in crude glass vials constructed from light bulbs. Since methamphetamine is easy to produce the substance is manufactured in staggering quantities in "backyard" factories. After the new South African government came into power, the South African Narcotics Bureau (SANAB) was disbanded, allowing dealers an unprecedented freedom of operation and causing a simultaneous drop in prices and rise in availability.
The case study focusing on the emergence of the opium economy in the Badakshan province of Afghanistan shows light on the fact that the prevalence of the illegal drug trade is affected on the international, national, and village level. Although Opium is the drug of focus, this argument can be applied to the general concept of the illegal drug trade.
The increased prevalence of Opium trade in Afghanistan is related to the breakdown of superpower patronage and control. Parties trying to take control must develop economic stability on their own, and thus look towards the taxation of Opium. Also, the lack of strong central authority in neighboring countries such as Tajikistan has increased the ability for trade, and thus increased profits from Opium.
The removal of state subsidies for wheat caused an increase in wheat prices, and thus pushed poor farmers to switch from the production of wheat to poppy, which has a much higher value. Also, the collapsed state caused a power vacuum, in which other military and politicians tried to step in as new leaders. The military and political structures must gain economic sustainability, and therefore relies on the taxation of Opium as revenue.
Due to poor economic conditions, farmers switch from the cultivation of wheat to poppies, which not only requires less irrigation than wheat, but also provides many benefits such as medicinal and monetary values.
The U.S. federal government is a vocal opponent of the drug industry, however state laws vary greatly and in some cases defy federal laws. Despite the US government's official position against the drug trade, US government agents and assets have been implicated in the drug trade and were caught and investigated during the Iran-Contra scandal, implicated in the use of the drug trade as a secret source of funding for the USA's support of the Contras. Page 41 of the December 1988 Kerry report to the US Senate states that "indeed senior US policy makers were not immune to the idea that drug money was a perfect solution to the Contra's funding problem.
Highly decorated US military Special Forces veteran Colonel Bo Gritz (retired) has accused the USA of collaborating with and supporting Manuel Noriega in his drug trafficking operations. In his book Called To Serve, Gritz details his role as a key US Government employee tasked with protecting the USA's relationship with Noriega.
Contrary to its official goals, the US has suppressed research on drug usage. For example, in 1995 the World Health Organization (WHO) and the United Nations Interregional Crime and Justice Research Institute (UNICRI) announced in a press release the publication of the results of the largest global study on cocaine use ever undertaken. However, a decision in the World Health Assembly banned the publication of the study. In the sixth meeting of the B committee the US representative threatened that "If WHO activities relating to drugs failed to reinforce proven drug control approaches, funds for the relevant programmes should be curtailed". This led to the decision to discontinue publication. A part of the study has been released.