First, legitimate competition from suppliers would drive down costs, forcing high risk/high reward illegal operations from other countries out of the market. How can a Mexican drug cartel compete against grand-ma and her backyard?
Secondly, what is the violent side of drug activitey? Again my understanding is that it's mostly revolved around protecting/hiding illegal production, and moving the drugs to a dealer. If you eliminate that supply chain, that vector of violent activity would be cut off.
Thirdly, why do people use drugs. I see three distinct reasons, recreational, escapism, addiction. The first two can easily lead to the third. The second two could be helped/resolved through rehabilitation programs, or solving the cause to need of escapism. (8-14% unemployment can't be helping). The first case, there isn't much a reason to have otherwise productive members of society be in jail.
I don't believe that drugs are marked as illegal because of fear from pharmacy companies, or from paper/cotton companies. I believe it is that same reaction as prohibition, blue collar laws. Bad stuff can happen, bad stuff does happen, and government officials wish to prevent that from happening, on the immediate time line, without generally considering that the long term effects can be disastrous.
One additional thing. As part of decriminalization and in addition to rehabilitation programs, the government should be watching new recreational drugs entering the market, and doing studies to determine the health risks / benefits of these fringe drugs. I seems that like sniffing glue, kids seem to assume that just because a drug has not been classified as an illegal substance, it somehow isn't dangerous, when the case is really that the government is rather slow to address anything of relevance in a timely fashion. (Except steroid abuse in MLB, and communists)