If we did this, what happens to all the people employed in the drug war business (agents, prisons, weapons, etc)? Jobs, jobs, jobs will be lost!

In the 40 years since U.S. President Richard Nixon declared a “war on drugs,” the supply and use of drugs has not changed in any fundamental way. The only difference: a taxpayer bill of more than $1 trillion.

A senior Mexican official who has spent more than two decades helping fight the government’s war on drugs summed up recently what he’s learned from his long career: “This war is not winnable.”
[…]
Growing numbers of Mexican and U.S. officials say—at least privately—that the biggest step in hurting the business operations of Mexican cartels would be simply to legalize their main product: marijuana. Long the world’s most popular illegal drug, marijuana accounts for more than half the revenues of Mexican cartels.

“Economically, there is no argument or solution other than legalization, at least of marijuana,” said the top Mexican official matter-of-factly. The official said such a move would likely shift marijuana production entirely to places like California, where the drug can be grown more efficiently and closer to consumers. “Mexico’s objective should be to make the U.S. self-sufficient in marijuana,” he added with a grin.
[…]
If the war on drugs has failed, analysts say it is partly because it has been waged almost entirely as a la w-and-order issue, without understanding of how cartels work as a business.

For instance, U.S. anti-drug policy inadvertently helped Mexican gangs gain power.