I don't agree with the recreational use of narcotics, but fully understand that people are going to find ways to indulge in whatever they want to. As a Taoist my general view is "do what you will but do no harm". Narcotic/alchohol abuse is one of the most destructive forces we know since it preys on the vulnerabilities of the human psyche. Perhaps legalization would not only destroy the criminal element but provide the resources to deal with those who have descended into substance abuse. Essentially, this is the "prohibition" of our generation. And much like technology, science, information and other things modern it is much more pervasive than alcohol ever was.
If the government basically began growing and producing narcotics, on state owned and operated farms and facilities, the economic and social impacts would be extensive and positive. The thought of what it would do to the criminal elements of the industry is particularly satisfying! It'd be hard for them to compete against a product manufactured with strict quality control that's available over the counter at your local pharmacy.