They would be sanctioned and heckled by other city governments.
They may even have their drug enforcement programs carried out by other governments, like when Canada sat back for years while Marc Emery sold Marijuana seeds worldwide.
The DEA basically coughed and the RCMP had Emery arrested on the spot and extradited to the U.S.A. to face charges in a country he was not even a resident of.[0]
I am sure there was a bit more to it than that. The USA probably insinuated some very strong consequences for Canada if they didn't turn him over. But that's entirely speculation.
Marc Emery aka "the prince of pot" remains incarcerated in the U.S.A. to this day.
[0] http://en.wikipedia.org/wiki/Marc_Emery#2005_arrest_and_extr...