The Connect- with Johnny Mitchell - How I Made A Fortune Selling Cocaine In College | #17

Episode Date: December 29, 2022

Johnny dissects exactly how to make money selling cocaine, who the players are, and how he made a killing selling coke in college.   Learn more about your ad choices. Visit podcastchoices.com/adchoices

Hey, I know you've got some cash to invest. I got a guy down in San Diego that can get us Coke wholesale. You can get us a kilo. Do you want to go in on it with me? We met him. We shook hands. It was everything that he said it was. We make it back to Eugene on Wednesday night.

And by Sunday morning, that entire kilo was gone. For us to make that kind of money selling weed, we would have had to sell like 16 or 17 pounds. What's up, everybody? Welcome back to The Connect. My name is Johnny Mitchell. As always, make sure to like, subscribe, follow us on all socials. For the bonus content and so many other benefits, go to patreon.com slash the Connect show. This is the best way to support the show you guys. As you know, YouTube is not showing us a lot of love. So for all of the behind the scenes footage, bonus interviews, all of the stuff that we can't show you on regular YouTube, go over to Patreon and support us.

And now, if you guys don't like using Patreon, you can actually subscribe and become a member of the Connect YouTube channel. And that gets you a lot of the same access and benefits as Patreon does. It's $4.99 a month, just like Patreon. You get to participate in the YouTube live chats, the super chats. We have a lot of fun with those. So go over and subscribe to that. You guys, when we get to a thousand combined Patreon and YouTube members, we are going to do something crazy. I'm talking about we're taking a crazy trip to the far reaches of this earth to try to get you the illest, best content that nobody else is touching. All right, let's get into the episode. Today's episode, we are going to talk about cocaine, cocaine. And this is a very sexy topic.

Many of you always reach out and ask me, why didn't you sell more Coke? Couldn't you have made more money selling Coke than you could have selling weed? Well, not necessarily. Cocaine is a completely different economy of scale than the weed business. So in this video, I'm going to break down how money is made in the Coke business and how much money cocaine dealers actually make. So let's take a step back for a second and look at the Coke business overall, the industry. And many of us know this information already, but I'm going to break down the entire supply chain from the Coca-Leaf in South America all the way to the noses of North Americans and Europeans. So we all know cocaine originates with the Coca-leaf, and that has grown in Bolivia, Peru, and now a lot. in Colombia. And it used to be that the big cartels, the Medellin cartel, the Kali cartel

own the coca fields as well as the labs where it was processed into cocaine. Now it's all been decentralized, so everybody has a different role in the supply chain and they operate independently. So the people who are harvesting and picking coca leaves work for themselves. They are the poor Campasinos, the farmers who have lived in the highlands of those countries, Peru, Bolivia, Colombia for generations. And, you know, I think a pound of coca leaf after extracting it and selling it to a buyer probably fetches like 50 or 100 bucks per pound. I mean, it's not a lot of money at all, but it's more than they can make growing other crops,

so they continue to do it. So obviously, at the very low end, not a lot of money at all. So the farmers sell the coca leaf to a buyer, and the buyer is just a guy who's learned how to process the leaf into what's called basse or the coca paste. That's the next step in the chain. And that guy, after buying up a bunch of leaves and making them in, you know, those rudimentary factories that we've all seen on TV in the jungle is then able to turn it into a kilo of basse of coca paste. He then will sell this kilo of coca paste for about $250. So he's making a little bit more money than the first person in the supply chain, which was the farmer.

But still, not that much. And it's that buyer, the guy who makes the coca paste, who is the one that sells it to the drug traffickers. And it's these drug trafficking organizations, these cartels like Los Urabenos, who we've talked about on this show before, who buy the coca paste en masse and produce the kilos of cocaine.

Obviously, they're making huge money. They control the supply of cocaine that makes it all around the world. So they might turn out tons and tons of Coke every year, so thousands and thousands and thousands of kilos. And they estimate that each kilo cost them about 500 bucks to make. After it's all said and done, it costs a drug trafficker in South America about $500.

Okay, so from coca leaf to coca paste to cocaine, not a lot of money is made on those first two rungs of the supply chain. But after the traffickers have the finished product and they sell it to a buyer in Sinaloa, Mexico, or an Albanian group out of London, they are able to charge, let's say, $2,000 a kilo, right? So their profit is $1,500, and they might sell $2,000 at a time. So you see how the millions of dollars add up very, very rapidly. So that is when the money in cocaine gets huge, when you traffic tons and tons of it at a time. time. It's just like any other product. Even if the profit margin is whatever, you do that multiplied by many thousands, you've now got a billion dollar a year operation. But it is not

the Colombian cartels, as we've stated on this show before, who make the highest profit margin. It is those groups, the Mexican cartels, the European cartels from the Netherlands, from Ireland, from Spain, who actually make the most money. Why? Well, the answer is very obvious, because they buy at a very low price from the source countries and then are able to move it successfully to the countries of consumption the price goes up 20 30 40 times so as you can see the profit starts out very small and then gets huge and then finally when the coke makes it into the country of consumption when it actually gets out to the users the profit starts to shrink again so it's like a reverse hourglass in that way so for an ordinary drug dealer a guy who's

not connected to a big cartel or, you know, some big drug trafficking organization that's got speedboats and people at the ports that are paid off. How does that person make real money selling Coke? A person like I used to be. The key to making real profits selling Coke is in the retail. So we all know retailing weed is a low profit business. So if I buy a pound for $2,000, that's a good price to buy a good pound of weed at. But still, I can only only sell grams for what 10, 15 bucks. It takes a lot of transactions to just turn a nominal profit off of a pound of weed. That's why it's actually easier to wholesale wheat. So to answer your question, fans who want to know why I wasn't wholesaling more cocaine, it's because it's

really difficult to find buyers who want to buy massive shipments of coke. These are usually drug trafficking organizations, right? Gangs from Mexico, China, Colombia, who already have their own connections. More people smoke weed, consume weed, so there's going to be more people selling at wholesale. My strategy selling pot was to sell low and buy very low. That's how I got all of these large scale wholesale buyers. So if my people on the East Coast were paying $3,000 for a pound, I would buy mine at 2,000 and ship 20, 30, 40 at a time. There's enormous profit in that. But people buying 30, 40 kilos at a time, there's only a handful of people in every region that have that operating capacity. For cocaine, the best strategy, in my opinion, is to buy low at wholesale and then

sell high at retail. Let me give you an example of what I mean by that. Okay, so it was the fall of 2006. I was a junior at the University of Oregon and Eugene. It was the first weekend that school was back, and that's a big party weekend at any major college. The football game is on Saturday. People are throwing keggers. Everybody's out. Just debauchery, getting fucked up. And it's a great time for the drug dealer because everybody is drinking and smoking and use it. So my friend comes to me, we'll call him Brandon. And Brandon says, Hey, I know you've got some cash to invest. I got a guy down in San Diego that can get us Coke wholesale. You can get us a kilo. Do you want to go in on it with me?

And it sounded like a pretty good strategy. And at this time, there was a drought. on weeds so I didn't have anything to do anyways. I was scrambling, I was burning a hole in my pocket, and I had some cash to pony up, so I said let's do it. So it was me, Brandon, and one other kid who we knew that we just paid to have him come keep us company and switch off driving. We took off on Tuesday morning for San Diego. We drove 17 hours straight, stopping just to take a piss and get something to eat all the way to San Diego to meet this guy. who had a kilo for us. We met him, we shook hands. It was everything that he said it was. We each took a snort. It was the best Coke we'd ever tasted at the time. This is before Columbia. This is before I had the Sina Loans in my pocket. I knew almost nothing about cocaine. And this particular guy sold us the Coke for 25,000 bucks. And he was a white guy. So he was probably buying bricks at wholesale himself from Mexicans for 21, 22,000. So right there, you're just a white guy. So right there, you know, he was probably buying bricks at wholesale himself, from Mexicans, he was a white guy. So right there, he was probably buying bricks at wholesale himself, he was a at wholesale himself from Mexicans for 21, 22,000.

So right there, you see his profits only about 3,000 bucks when he sells it wholesale to guys like us, the retailers. And I'm telling you, we picked up that kilo. We didn't even stop by Brandon's family's house to say hello. We turned around and we jetted straight back to Eugene, up the I-5. Now it's 24 hours into our journey. We're only halfway through the state of California.

We're ripping lines off the kilo. We're taking turns driving. We make it back to Eugene on Wednesday night, and by Sunday morning, that entire kilo was gone. We sold it off in grams, eight balls, and half ounces. Our profit, probably $15,000 each. So as you can see, we made five times what the guy who sold us the Coke made.

And that's what I mean by buying low at wholesale and selling high at retail. Buy in bulk at a cheap price, if you have a good connection, and that's a big if, by the way. And then you take it back to whatever territory or market that you inhabit, and you sell it off in retail, little by little, at the highest price.

So we each made $16,000 selling 1,000 grams of Coke. For us to make that kind of money selling weed, we would have had to sell like 16 or 17 pounds. And that's really the difference between selling Coke and selling weed. If you wanna make big money selling weed, The most important people to have are buyers. If you want to make money selling Coke, it's the opposite.

The most important person is the supplier. Do you have a good supplier that can get you high-quality shit for the low price? But if you don't have a good Coke supplier or, say you do like me and Brandon, but we wanted to make even more money, you can always stretch it. Today's episode is sponsored by BetterHelp. You guys, life doesn't always come with the user manual. Last year, I went through a very painful breakup, and it was one of the hardest things I've ever had. had to go through, thank God I had access to BetterHelp online therapy. You guys, BetterHelp is the world's largest therapy service. It has matched over 3 million people with professionally

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If you're not sure what to pick, their friendly guides can help. Find what you love and love what you find only at Total Wine and More. Shop total Wine and More in store or online. Spirits not sold in Virginia and North Carolina. Drink responsibly. B-21. Stretching the Coke, stepping on it, doing the two-step, doing the dance, whatever you want to call. it, that has changed the Coke business and it's evolved over the years as more and more players

have gotten into the industry. So it used to be that Colombians monopolize the whole trade, they were the ones who got it directly into the U.S., and there was no intermediaries, there was no middlemen. That's completely changed. Now it could pass through three, four, even five hands before it finally makes it to the U.S. And every step of the way, each of these groups makes money by, by buying. buying the coke and then cutting it up, stepping on it or stretching it, and then passing it along to the next buyer in the chain for a markup.

And at the highest levels of international trafficking, you probably don't step on it that much or else you can fuck up a major deal. Somebody could end up getting killed. But once it's in the hands of U.S. dealers like myself, anything can happen. Brandon and I could have, if we wanted to, taken this kilo of coke that we bought and say it was 80% pure and stepped on it and stretched it to the point that it was maybe only 65, 70% pure and we had that much more coke to sell. We called that turn in 36 into 45 or 48. And what that means is you take 36 ounces out of a kilo and then you end up with 48 at the end of the stretching.

And to be honest, these kids in college wouldn't have known the difference anyways. And in various parts of the world, you'll find Coke that's either heavily stepped on or not very much at all. In Brazil, for instance, the cartels in the favelas, the drug gangs, have a stranglehold on all of the drug operations. So, therefore, you get coke that is shitty. Like, I bought some coke when I was in Rio. I swear to God, it was like it had cornmeal in it. That's how stepped on and useless it was. And that's because they don't have any competition.

Same way when you go to a tourist resort in Mexico. The cartels have it completely sewed up, so they have it completely sewed up. So they have no incentive to sell you good blow. They can step on it almost to the point that you're literally just sniffing B-12 vitamins. But you go to New York or L.A. These are very Coke-savvy places where you've got a lot of high-end people that really, really know their product. You can't get away with that. If you want to get $100, $120 for your gram of Coke as a dealer in Hollywood, you have to sell the purest shit that's available.

That's how I like to do it. I didn't like to get it messy or step on it. I like to buy it the cheapest for the highest quality and just sell it the way I got it because you get more customers that way and you get more customers retained and coming back to you. So you make more money in the long run. But stretching Coke, you could argue, has changed the world in many ways. It's given rise to all these drug gangs that couldn't have existed before. It has created crack cocaine.

I mean, talk about stretching it and stretching it and stretching it and stretching it till finally you've got a base rock. That's exactly what happened in the mid-80s. Crack served basically a glut in the market. So inner city people couldn't afford $100 grams. And even when more cocaine got flooded into the city, they still couldn't afford $50 grams. But that cocaine cooked down into a $5 rock,

now you can afford it. So, you know, a guy could buy an ounce of cocaine for $1,000 bucks, cook it down into $5 rocks and make $2,500, $3,000 just off one ounce. And it got to the point where they arrested this crack dealer in MacArthur Park in downtown L.A., and this was like, I think, 91, and he was selling $2 rocks. So you think about how flooded and how stretched the Coke can be. It can create an entire ecosystem, a new market for drugs. And as we know, unfortunately now, fentanyl is being used to step on and stretch

Coke in the United States. And that's a big problem, in my opinion, it's killing off Coke demand, and it's just not good business practices. But nevertheless, that is another form of stretching. And in fact, when fiends or junkies hear about an overdose, it actually will make them go to that dealer even more. So that's a real dirty, dirty, cruel way to stretch Coke. But that's the reality. That's what's going on today. So you know the best markets around the world. world to sell coke. We've talked about that ad nauseum at this point. Australia, Europe, all these places where the prices are the highest? But where are the best venues to sell coke once the coke has made it to your country of consumption and you're a guy like me, just a young kid, and you want to be

able to get off retail coke as fast as possible to the best kind of clientele possible. Let's go look at a couple of these places. The first is college campuses. Like I said, major college campuses. especially the party schools, Florida, Texas, Arizona State, all of these places where 30, 40, 50,000 kids living off their parents' money or the government's money, kind of like, you know, the projects, but with rich people. When I was at U of O, I used to sell Coke to my teachers. I sold Coke to different fraternities. The Jewish frat, oh my God, around testing time, around midterms, those dudes had vacuum noses. They were studying to become lawyers. And I should have actually got their number because I needed a lawyer later on.

And the way I operated was I never told a customer that I was the Coke dealer. If I knew them personally or if they got referred to me, I would say, oh, yeah, I could probably help you out. I think I know a guy who has it. And so I kind of would take the burden off of me and would pretend like I was just doing them a favor. and I always gave them more than their fair share. So if it was a first-time customer and they were buying a gram from me, I might give them like a gram and a half. Who knows?

Depends on how much I paid for it, right? But that way I knew that I had them on the hook. And as they kept coming back to me and being more and more addicted, I would reduce the size of their bags. And I valued customer service above all else. So you could get a hold of me between Thursday morning and Sunday night. you can get a hold of me basically 24 hours a day. That's how I operated.

And when you find a couple of those good cokeheads, people that have money to spend are middle class, upwardly mobile, don't complain a lot. They will very quickly tell three or four of their friends, and they'll tell three or four of their friends, and before you know it, you got 20 or 30 people bringing you $10,000 every couple of weeks. That's how drug addicts operate. They do it together.

So you just got to have good product for one or two people and that quickly spirals into a whole network of consumers Nightclubs is a big one, especially in Europe and South America Nightclubs are a big outlet for drug kingpins to move their product retail. I remember when I was in Argentina living there during college we went to this boliche they called them this big I'm talking like 5,000 people in a big warehouse right on the river in Buenos Aires. the Rio Parana. And you would walk into the bathroom and the line would be out the door, but nobody was using the stall, if you catch my drift. Everybody was just lined up to buy little like half grams rolled up in not even bags they give you down there. It was like pieces of

cardboard ripped out of magazines and you would just open it up and you just throw it into your fucking your nose, basically. But, you know, multiply that petty cash times, I don't know, hundreds of transactions at night at six nights a week. You can turn hundreds and hundreds of thousands of dollars a year from each of those nightclubs. That's how we were told that the Sinalowans in Kulia Khan, that's how they move their cocaine down there. A lot of nightclub owners are even in on the operation. So they're either supplying it or they're taking a percentage from the dealers to be allowed to operate in there. Because what it does is people using Coke want to stay up longer and drink more.

So it's a win-win for the dealer and the nightclub owner. I've never told anybody this, but if you watch my videos, you know that one of my goals back when I was a dealer was to launder my money into hotels down in Columbia. and one of the operating strategies besides the legal, you know, renting out rooms and things like that, I was going to sell Coke to the tourists who came and stayed in my hotel. So, yeah, that's a big business. And obviously, as you know, I used to sell tons of Coke this way in Colombia at these backpacker hostels. So all these Europeans that came through who were, you know, accustomed to paying $150, $200 for a gram of blow.

I gave it to him for 20 bucks. I had the whole thing sewed up. At the end of the day, though, if you want to make real money selling Coke, you got to get organized. It might not be possible anymore like it was in the 70s for a cartel like the Colombians to control every step of the supply chain, all the way from the growers of Koka Leaf to the distribution of it in the consumption country. But there are gangs out there making real money now because they supply and control their own markets. So the Albanians in London is the best example. They go all the way to Columbia and purchase wholesale from the cartels there, 2,500, whatever they're paying for a kilo, and they're buying tons at a time. They control it all the way to England where they distribute it

retail. They don't sell it out wholesale even like the Senaloans do when they get the Coke to the border of the U.S. They just shove it. off wholesale to U.S. dealers and say, here you go, bye-bye. The Albanians take it all the way to the end. They control the ports where the wholesale coke gets imported. They have the distribution and the warehouses where they press the bricks, stretch the 100% pure cocaine all the way down to 75 or 50%. And then they control the nightclubs throughout London where the grams get sold. So they are maximizing their profit off of every single brick they buy, and they're doing it over and over again, thousands of kilos at a time. So what that guarantees, that kind of organization and logistics, is stability of price.

They know that they're paying the lowest price possible in the source country in Colombia and Peru, et cetera, guarantees quality because they're not going to step on or stretch their product too much because it's their own. They're selling it to themselves on the other side. in London. And finally, it guarantees that they dominate market share because they have the best product and all of the venues in which to sell it. So they're just going to get the most customers coming back. And to be honest with you, that's what my friend Brendan and I were doing back in the day on the campus of the University of Oregon. We were monopolizing a market because we had access to a product that no other dealers had. And therefore, we knew how much money we were going to make. And we We guaranteed a monopolization of customers because we had the best shit.

Everybody was coming back to us. And that's how it's done. All right, you guys, that's been today's episode. Thank you so much for watching. As always, if you love the show, if you want to support us, head over to patreon.com slash the Connect show. You get access to all that amazing bonus footage. And of course, if you want, if you like using YouTube instead, go over and become an exclusive member today.

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