I always see this argument when it comes to drug violence in Mexico but I don't think it is that simple.

If the goventment gets involved I'm sure it will want a highly regulated system, just like it does with all of the alcohol regulations on the books now. If the government says that only X supplers or growers are allowed to legally sell drugs then I can't see how this is going to be cheaper than stuff that is out on the street. If the government wants to make drugs on par with high end drug cartels that customers like I see it being overrun in bureaucracy and will cost the buyer much more than if they hit up their local dealer for better product at a cheaper price.

If the government can't beat the price + quality then people are going to continue to buy from suppliers in Mexico, which will keep fighting it out for this market.