In San Diego, US and Mexican officials have discovered a sophisticated, cross-border tunnel which the drug cartel has been using to transport cannabis from Mexico over the US border into California. This is the second discovery of a cross-border "drug tunnel" in one month.

On the Mexican side, the tunnel entrance is in the kitchen of a home in Tijuana. At nearly half a mile long, the tunnel terminates in a warehouse in an industrial district of San Diego. Investigators noted that the tunnel had a rail system, ventilation, and fluorescent lights. Officials on both sides of the border made eight arrests in connection with the discovery and seized over 27,000 pounds of cannabis.

Earlier this month, California voters rejected Proposition 19, which would have legalized the cultivation, possession, and use of cannabis for recreational purposes. If the controversial ballot initiative had passed, it may have corrected the very economic incentives that drove Mexican drug lords to build these tunnels (among the 75 other less sophisticated cross-border tunnels that authorities have discovered over the last four years).

So long as cannabis use remains illegal, the market for cannabis will be dominated by the violent drug cartel. As gun enthusiasts often say: "If you outlaw guns, only outlaws will have guns." Likewise, "If you outlaw the sale of cannabis, only outlaws will sell cannabis." But if Californians could legally grow cannabis in their gardens or purchase some from a law-abiding retailer which gets its supply from a peaceful, law-abiding California farmer, the violent Mexican drug cartel would stand to lose a lot of business.

In addition to losing sales of cannabis, the drug cartel would lose profits from each sale. After legalization, the market would be flooded with marijuana and the risk of growing or selling it would diminish- steeply driving down the price of cannabis and destroying the artifically high profits that helped fund the creation of these sophisticated tunnels, as well as the high-powered weaponry that has resulted in thousands of deaths at the hands of Mexico's drug cartel in recent years.

The law of supply and demand is simple, intuitive, and an uncontroversial axiom of economic inquiry. The more scarce a thing is, the more valuable it is, and the more suppliers can charge for it. By seizing 27,000 pounds of cannabis in their raid on this second San Diego drug tunnel, authorities have simply acted to drive up the price of any cannabis that remains in the market, and padded the bottom lines of whichever drug gang didn't sustain losses from this month's tunnel raids.

California and the U.S. Federal government can continue pouring money into finding, raiding, and shutting down these tunnels, only to bolster the profits other gangs need to build more tunnels and buy more weapons.  Or, instead of fighting the symptoms of the problem, authorities can fix the root of the problem itself, which are the perverse incentives and market distortions created by our policy of prohibition.