Understanding the illegal drug supply chain structure: a value chain analysis of the supply of hashish to Europe

Despite the social, health, law enforcement, and economic importance of illegal drug supply, information on these supply chains is scarce. This paper disaggregates the structure of the hashish supply chain from Morocco to Europe to explain value contributions at each level, end-price formation, and supply chain management practices. Using a mixed-method approach, primary data were gathered from field interviews with cannabis producers and dealers, and secondary data from official statistics, research papers, reports, and documentaries. Framed through supply/value chain and cost–benefit lenses, findings show unequal value contributions across distribution levels, with end-user prices rising by about 7000% over production cost along the chain. The chain features high variable and limited fixed costs, fostering instability and constant adaptation. Dealers show reluctance to raise end-user prices but readily adjust quality. Implications include: dealers’ creation of a supply-push system leveraging information sharing; insights for law enforcement on operational functioning and chain resilience; quantification of economic parameters for financial investigations; evidence for development agencies to promote alternative livelihoods; and for health authorities, the potential deterioration in hashish quality and added health risks resulting from seizures and prohibition.