I recall one article put most of the blame for the rise of organized crime in the US on Prohibition and that it wasn't really the dedicated work of the FBI that stamped out the mafia in the US, it was the aging and eventual death of the entire generation that had risen to wealth and power during those times.
It looks live we've really set ourselves up for long-term pain with the drug war, even with total de-criminilization like Portugal has done, it will probably be at least another generation before the worst effects of the criminal organizations fade away. By which time enough people will have forgotten the price of the drug war and be gung ho to start some new socially-destructive campaign.
It's similar to how all manufacturing happens in China because it's a way for countries to export their social issues and environmental impact to another country that is willing to take it.
If you think they would make less money under the new scheme then that would be a good thing because it would lower the benefit of doing the crime and thus fewer people would risk being involved.
And honestly there isn't really a market for slaves (at least in the US), so the organizations would mostly collapse, with the remnants smuggling counterfeit goods, which is an outcome I would be okay with.
Pay for the the treatment industry and you will get recovering addicts and fewer cartels.
Pay for the punishment industry and you will get criminals and cartels.
"in your choices lies your talent..."