Alcohol is already legal, so why gangs are not gone?
Alcohol is legal. The gangs that formed around producing, smuggling, and selling alcohol (e.g. Capone) are gone.
The hope is that once other drugs are legal, the same thing happens to their producers.
That prompted me to ask "why is moonshining illegal", and the best (wrong) answer I could come up with was for production and delivery to dry counties.
Turns out, it's just a matter of taxation. Moonshiners are welcome to go legit, but they then have to pay $2.14 for each 750ml bottle they make, which cuts into profitability.
As they likely don't have reputations and/or massive marketing budgets, they still and distribute illegally, which turns it into a pure profit + overhead scenario.
"The number of jurisdictions which ban the sale of alcoholic beverages is steadily decreasing which means that many of the former consumers of moonshine are much nearer to a legal alcohol sales outlet than was formerly the case. Moonshine-like distilled beverages with names like Collier and McKeel White Dog,[27] Everclear, Virginia Lightning, Georgia Moon Corn Whiskey, Ole Smoky Tennessee Moonshine,[28] Platte Valley Corn Whiskey Cat Daddy and Junior Johnson's Midnight Moon are produced commercially and sold in liquor stores, typically packaged in a clay jug or glass Mason jar. As a result of these changes and aggressive law enforcement, moonshine production is far less widespread than it was formerly." [1]
Obviously there is a point at which taxation is virtually equivalent to prohibition (1,000,000%?) so the aim of a good tax in this arena is to (1) discourage consumption (2) provide some revenue to offset against social costs of the activity (healthcare costs of smokers, for example) while (3) not being so outrageous as to push the activity underground altogether.
I agree that the main element is taxation.
Very many cigarettes sold in England are smuggled in from EU because of tax. But now people are counterfeiting so some cigs are both smuggled and fake - the quality of some of the smuggled product is alarmingly poor. (But it's tricky to get any sensible information about this because the only people releasing information are the customs / police who want to make it seem as scary as they can.)