Wordnet 3.0
NOUN (1)
1. 
 an area that has been taken over and is controlled and corrupted by drug cartels and where law enforcement is effectively nonexistent; 
- Example: "this Mexican town has become a narco-state that ships 100 pounds of cocaine to the United States every day"
WordNet (r) 3.0 (2006):
narco-state
    n 1: an area that has been taken over and is controlled and
         corrupted by drug cartels and where law enforcement is
         effectively nonexistent; "this Mexican town has become a
         narco-state that ships 100 pounds of cocaine to the United
         States every day"