From ordinary narcos to CEOs: the diversification of Los Chapitos and the Sinaloa Cartel

Learn about the evolution of the Sinaloa Cartel and how Los Chapitos, the sons of El Chapo, have adapted to a changing drug market through synthetic drug production and diversification into other illegal ventures.
  1. The Sinaloa Cartel, formerly led by Joaquin “El Chapo” Guzman and now by his sons Ivan Archivaldo, Jesus Alfredo Guzman, Ovidio, and Joaquin Guzman Lopez (known as “LosChapitos”), has adapted to changes in the international drug market by focusing on the production and trafficking of synthetic drugs, particularly fentanyl and methamphetamine.
  2. In addition to drug trafficking, LosChapitos have also diversified into other illegal ventures such as marijuana sales, illegal fishing and mining, and migrant smuggling. They have also won government contracts for construction projects in several Mexican states.
  3. LosChapitos have largely abandoned the strategy of securing the loyalty of local populations through acts of supposed generosity, instead imposing commercial practices on anyone who does not comply with their rules. Unlike other criminal groups, they have not engaged in extortion.

Los Chapitos might succeed where other more famous figures like their fatherly figure El Chapo, the Colombian Pablo Escobar, or the Sicilian Mafia had failed: to diversify their businesses and overcome their condition as drug kingpins, going from narcos to modern business owners.

Gone are the days when the big drug barons were seen as the heroes of the poor.

Figures like Joaquin “El Chapo” Guzman or Pablo Escobar, “El Patron,” narcos who became famous for trying to sell the Robin Hood figure in their respective hometowns, are increasingly a thing of the past.

If the poorest villagers in the Sinaloa highlands needed help, “El Chapo’s” people would show up to solve the problem. This may have been more of a strategy than a genuine act of generosity, as the Sinaloa Cartel secured the support and loyalty of the popular classes.

However, that method of securing the people’s loyalty in certain territories has no longer been pursued with the same vigor by the group headed by Ivan Archivaldo, Jesus Alfredo Guzman, Ovidio, and Joaquin Guzman Lopez, better known as “Los Chapitos.”

Instead, Chapo Guzman’s sons have opted more for a super-capitalist business model based primarily on diversification, production, and labor, as noted by the security website Insight Crime.

Los Chapitos take control

The logo of "El Ratón", the brand of one of El Chapo's sons. (Twitter/@c4jimenez)
The logo of “El Ratón,” is the brand of one of El Chapo’s sons. (Twitter/@c4jimenez)

The year that is about to end was a clear demonstration of the ability of “Los Chapitos” to work autonomously and, at the same time, take control of most of the fentanyl and methamphetamine trafficking in central and northern Mexico.

They took control of drug sales in the Sinaloa capital, Culiacan, and other strategic locations in Sonora and Chihuahua.

The strong bet of El Chapo’s sons has been the production of synthetic drugs. The main activity of the criminal group formed by the four brothers is international drug trafficking.

“Los Chapitos” have been able to adapt to changes in the international drug market. Their success is in contrast to the increase in deaths in the United States from overdoses of hard opiate drugs such as fentanyl.

Such emphasis is reflected in recent seizures of synthetic drug laboratories across Mexico. Between May and June 2022, Mexican authorities seized 72 clandestine laboratories that primarily produced methamphetamine (crystal meth), according to the head of the National Defense Secretariat (Sedena), Luis Crescencio Sandoval.

Marijuana, mining, totoaba fish, and migrants

Culiacán is the state where the largest number of drug laboratories have been detected (Sedena)
Culiacán is the state where the largest number of drug laboratories have been detected (Sedena)

According to the defense secretary, 65 of these laboratories were located in Sinaloa, specifically in the municipalities of Cosalá, Culiacán, Elota and Badiraguato.

However, although synthetic drugs have been their forte, the marijuana market, despite no longer having the same value in the United States due to its legalization in several states, continues to be a profitable business at the local level.

This was revealed in an investigation by Business Insider, which reported on the new business model of “Los Chapitos,” copied from the US, with the installation in Sinaloa of various stores where you can buy merchandise derived from THC (tetrahydrocannabinol) from cigarettes to edible products.

Their goal is to move away from how weed is sold on the street and replace it with establishments offering manufactured goods, an alleged member of the Sinaloa Cartel, identified as “the godfather,” told the U.S. media in a report by journalist Luis Chaparro.

“Los Chapitos” have also been known to venture into spheres outside the drug business, such as illegal fishing, mining, and migrant smuggling.

The Ministry of Foreign Affairs assured that Mexico continues to seek alternatives to guarantee the protection of endangered species (SRE)
The Ministry of Foreign Affairs assured that Mexico continues to seek alternatives to guarantee the protection of endangered species (SRE)

The criminal organization collects rents from the illegal trafficking of totoaba, a species of fish that has been brought to the brink of extinction in Mexico due to the greed of its swim bladder (considered a medical remedy in China).

They have even won several construction contracts with the governments of Sinaloa, Sonora, Durango, and Chihuahua, reported Insight Crime.

Finally, one thing that distinguishes them from other criminal groups is that they have not turned to extortion. According to the organization, there have been almost no reports of them engaging in this type of regular payment.

Instead, they have allegedly opted to impose commercial practices in which anyone who does not adapt to their methods, prices, and schedules is wiped off the map.