Pipelines are one of the most popular investments with the infrastructure community, although lately, in light of the ongoing oil glut and its impact on the energy markets, they have been plagued by commodity risk.
Some entrepreneurial souls along the Mexican/US border, though, decided to put a different spin on commodity transportation. To do that, they built an underground tunnel between a restaurant in Mexicali, Mexico and a house in Calexico, California. The tunnel, which ran the length of four football fields, was designed to transport an expensive, high-demand commodity completely uncorrelated to the wider economy: marijuana.
The problem? Regulatory risk reared its head when US law enforcement officials descended on the Calexico house and shut down the tunnel, seizing over 1 ton of marijuana in the process. US attorney for the Southern District of California Laura Duffy had this to say:
“For the builders, the financiers and the operators of these passageways, there is no light at the end of the tunnel [Nice pun – Ed.]. We will seize your drugs and your tunnel before you even have a chance to use it.”