"These are the first batch of goods you two will be handling!" In a warehouse in the industrial zone on the outskirts of Chicago, Josh pointed at the wooden crates stacked full around them as he spoke to Lyndon Schneider and Dix. Then he pointed at a nearby crate. "Dix, open it."
Dix stepped forward and opened the crate as instructed.
Upon seeing the contents, Dix's eyes lit up, and Lyndon Schneider's eyes also widened.
"Such high-quality tobacco!" Lyndon Schneider exclaimed. "Is this entire warehouse filled with tobacco?"
"That's right, all of it is coarsely processed dry tobacco. Your job is to figure out how to sell it. Whether you sell it as raw leaves or roll it into cigarettes first, I don't care. Once it's sold, each of you gets a 10% cut, the others get 10% to split among them, and the rest is handed over to me. Alternatively, what you hand over to me can also be other goods I need—like firearms, steel, cloth, food, etc. If you can find a profitable trade, let me know ahead of time. How about it? Any problems?" Josh looked at Lyndon Schneider as he asked.
In later times, when people talk about high-profit illegal industries, the first thing that comes to mind is often drugs and gambling—deadly sins, or arms trafficking.
Especially drugs, which can yield hundreds of times the investment.
But what many don't realize is that in the U.S., drugs have never been the most profitable illegal industry.
By the 21st century, despite annual drug sales exceeding $100 billion in the U.S. and the massive scale of the industry, experts have calculated that due to the high processing difficulty, dispersed market, and high-risk transportation costs, the actual net profit margin isn't that high—not even 20%. The illusion of extreme profitability comes from the many middlemen and layers of markup in the supply chain.
In fact, compared side by side, drugs aren't as lucrative as health supplements.
Take sugary bird's nest drinks, for example. With just 0.001% bird's nest and the rest being sugar water, a small bottle costs at most 3 dollars to produce but sells for 30—netting a 1000% profit.
As for arms, the truly profitable deals are always the legal ones handled by major arms dealers. Illegal trades are just scraps. Even the so-called "Lord of War" only made a little over a billion dollars in his most profitable year.
So what is the most profitable illegal industry in the U.S.?
From 1919 to the 1950s, it was alcohol—thanks to Prohibition.
After the 1950s, it was cigarettes—illegal cigarettes.
Yes, even legal tobacco is a high-profit industry, but illegal tobacco? That's profit within profit.
Take New York in 2021 as an example. Because it had the highest national tobacco tax, the average retail price for a pack of legal cigarettes was $13, with a wholesale cost of $12.50, yielding a profit of only 50 cents per pack.
But for smuggled cigarettes? The cost for smugglers was less than $1 per pack. Even after transportation, it didn't exceed $3. They could sell it to downstream vendors for $5–6, with a profit margin of at least 200%.
Downstream vendors, selling it below market at $12 a pack, still made $5–6 profit per pack—a profit rate of over 100%.
Even in regions where cigarettes were cheaper, the average retail price still exceeded $7…
(In many parts of the U.S., you can buy Chinese cigarettes cheaper than in China itself due to tariff concessions—cigarettes in China aren't cheap to begin with.)
This kind of staggering profit is why over 60% of the U.S. cigarette market is made up of illegal or counterfeit cigarettes.
And compare the risks—how dangerous is drug dealing compared to selling cigarettes?
Except for marijuana, which is gradually being legalized, drug selling and use still carry heavy sentences, and more importantly, strip many civil rights. Punishments used to be even harsher in earlier decades.
But selling cigarettes? Unless caught red-handed by the IRS, most of the time it just results in a fine.
The level of risk isn't even close.
So starting in the 1950s, the Mafia, with its tightly organized structure, operational efficiency, and advanced supply chain management, began shifting its industrial focus to tobacco.
Let the bumpkins in Mexico and Colombia play with drugs.
A side note: since the 1990s, 90% of illegal cigarettes in the U.S. have been Made in PRC (Made in China).
The only issue is that managing an upstream supply of illegal tobacco requires highly competent managers.
That's exactly why Josh valued Lyndon Schneider so highly. This guy was called a criminal expert not just because he was smart and experienced in smuggling, but because he was a legitimate "doctor"—a PhD student at the University of Munich's School of Economics...
Who knows why such a person ended up a thief?
Then again, considering Germany's post-WWI fate…maybe not that surprising.
"How much tobacco is there in total?" Lyndon Schneider looked around the packed warehouse and asked solemnly.
"Forty tons!" Josh said with a smile.
Forty tons??? Lyndon Schneider gasped, his hand trembling slightly.
In this era, the price of cigarettes varies due to different purchasing power.
A carton of cigarettes costs about $10.
That doesn't seem expensive, but adjusted for purchasing power, it's actually costlier than in later times—after all, by gold comparison, the dollar in 2021 had depreciated nearly 40-fold.
Forty tons of tobacco, if you go by the honest standard of 1 gram per cigarette, equals 40 million cigarettes, 2 million packs, 200,000 cartons, worth about $4 million.
But illegal cigarette makers aren't exactly honest. Roll them looser, or mix in some dry grass, and production doubles—$8 million.
Even subtracting downstream sales profits, there's at least $2 million to be made.
Even if they only keep 20%, that's still $400,000.
Isn't that way better than stealing jewels?
A million dollars in gems might get you 30% at most.
And cigarette sales are less risky.
"Can I do it? Of course I can!" Lyndon Schneider's eyes were glowing red.
Selling illegal cigarettes isn't just about high profits and low risk.
Often, cigarettes can be bartered for things money can't buy.
Especially in chaotic regions—like Europe right now…
If he could get this tobacco to Europe, Lyndon Schneider could practically trade it for a mountain of gold!
"But Mr. Kane, to smoothly distribute this much tobacco, I'll need some starting capital—and I'll also need more weapons and manpower!" Lyndon Schneider said after calming down a bit.
"Dix has already prepared the men and weapons. As for money, here's $50,000. Also, I'll introduce you to someone. Come out, Lieutenant Dietrich!" Josh clapped his hands.
A man in plain clothes stepped out from the warehouse.
It was Sheriff Dietrich, who had appeared several times before.
"Mr. Kane! Long time no see. Mr. Schneider!" Sheriff Dietrich respectfully greeted Josh, then turned to Schneider with a touch of arrogance.
"So it's Sheriff Dietrich!" Schneider greeted him with a strange look, instantly understanding why Josh introduced this cop.
The tobacco's profits were the carrot, and this sheriff was the stick.
But having a cop like this on their side really would make tobacco sales much easier.
"By the way, Schneider, your early release was largely thanks to the sheriff's efforts. Also, he and his colleagues will get a share of the tobacco profits too. You'll be working closely together," Josh said with a smile. "We're all smart here—we understand what this business means. And this is only the first batch. If you do well, I guarantee you'll all be rich. But if anyone starts getting funny ideas…I suggest they think very carefully about the consequences first."
The men quickly voiced their agreement.
"Well then, I'll leave the rest to you. I have other matters to attend to." After giving instructions, Josh didn't linger and left.
Was Josh worried Schneider might steal the tobacco? Not at all.
He had two layers of protection.
Dix's men were all cowboys from Kentucky—family men with roots. Even Dix himself was tied down by Louis' widow.
If Schneider wanted to hijack the tobacco, he'd need their cooperation.
The other layer of protection? Sheriff Dietrich.
A full-blown crooked cop, Josh had dirt on him collected while helping clear Schneider and Dix's names. Plus, this cop had a family too.
With both pressure and incentives, the corrupt sheriff had easily switched sides.
Especially considering the profits from a few dozen tons of tobacco would normally be enough to line the sheriff's pockets for a decade.
As for betrayal? Josh didn't care.
Selling illegal cigarettes isn't a big crime. And as long as Josh was willing to spend money, not only was it unlikely he'd lose a lawsuit, even if he did, with Margot's help and a bit of cash, he'd still walk free.
But those other guys…ha.
The only real concern was if these people got desperate and turned violent.
But that was highly unlikely. When you know that sticking with Josh means steady, massive profits, who'd be dumb enough to pull a one-time scam?
Unless they could bypass Josh and get to the source.
But where's Josh's source?
Westeros!
Go ahead and take it if you can!
That's right—aside from his legitimate trades, tobacco was a new high-profit business Josh discovered through his dealings with Daenerys.
But in Westeros, tobacco isn't smoked—it's chewed, like betel nut. That was actually the earliest way humans used tobacco. Because of its sour taste, it was called "sour leaf"—finished tobacco isn't sour, but alkaline, because it's mostly flue-cured. Fresh leaves are full of citric and malic acid. These acids are extracted during curing, leaving a white powder.
Thanks to its medicinal properties and high addictiveness, tobacco was popular among nobles and thus widely cultivated in Westeros.
Even more so on Daenerys' lands. It was Slaver's Bay—labor was free, so costs were extremely low.
But for a queen focused on conquest, this stuff was useless.
So she sold it to Josh at a very low price—giving him another huge surprise.