To date, much of the literature on the financing of terrorism and insurgency has focused at the macro-level on groups involved in financing their organizations through involvement in the drug trade. This paper discusses some of those implications, but argues that to better understand the threat faced by the new generation of jihadists in the West, security forces and intelligence services must also look at the micro-level of how lower level trafficking, drug dealing and petty criminal activity, combined with prison radicalization and ties to the black market and illicit underworld, combine to present a new spin on a longstanding threat. To be sure, the micro-level is even more difficult to counter, given already poor community-police cooperation and relations in the marginalized communities throughout the West. Further, the threat from drug trafficking at the micro-level can be equally as nefarious, as smaller cells are given greater autonomy to finance plots, recruit new members and ultimately conduct attacks in developed democracies. The paper concludes with some policy recommendations geared toward helping host-nations build capacity in critical areas, including law enforcement and intelligence, from the local to the state to the federal level.