You're not using the word "criminalizing" correctly. The drugs are illegal, they aren't criminalized. Criminalizing is something you do to the act of using or selling drugs. The drugs themselves are simply banned.
Assume for sake of arguendo that no drugs were illegal so there was no money to be made smuggling and distributing them under the radar/off the grid. Where would the easy money be then? I'm sure you can think of a few things, like pros ution (hey, legalize that too), stolen cars (legalize stealing cars), chop shops with stolen auto parts (legalize that as well). So we legalize everthing, no one is breaking the law. Now we have no in in jail and you cannot have a society of normal day to day life. That's the extreme, but you seem to think if you just legalize the soft stuff that the same people wouldn't look for the next quick score.
The answer isn't to stop putting Jr in timeout when he acts out. It's to make a stiffer penalty. We wring our hands too much trying to rehab career criminals. Do what China did to theirs.