Most of your post I am entirely in agreement with.

The problem is thus:

Currently we are discussing cannabis legalization. I for one could see myself being convinced, and even supporting, it's legalization at some point (certainly my attitude has changed in the last 12 months!). However, in realistic terms, that is not going to reduce overall crime related to the illegal drugs trade - dealers will simply shift focus to other drugs (I admit that there could well me a small reduction where dealers find it too much hassle etc.).

For your scenario to take affect all drugs have to be legalized. I cannot see a reasonable argument for making Heroin, a highly addictive and dangerous substance, legal. I'm fairly sure that many people behind the legalization of cannabis would feel the same way.

And even then I feel the problem would not go away - at least in the long term. Illegal markets will always exist. Sure we can keep legalizing them - but at what point does the danger become too great, at what point does designer drug X become too dangerous? I posit that such a point will come (given rampant legalization) and as such the illegal trade will continue to flourish.

Essentially what you are arguing is the idea of shifting poisonous assets (crime) elsewhere to allow positive gains in certain areas (cannabis industry/use). Which is fine but a) you have to be aware of where those poisonous assets are going to (can you control them?) and b) those assets still exist and you have to deal with them at some point.

That is economics :)

With regards your other post, which you deleted, I can't (and wouldn't anyway!) down mod your replies [for obvious reasons] but I suspect the reason was because of the first comment - the tone of which is usually frowned on here.