The average IQ of most western countries, including the US, is around 100. That's probably significantly lower than the average reader here on Hacker News. I'm not sure if a person with an IQ of 100 ever asks themselves intelligent questions like yours...
Also you're assuming some sort of strong correlation between IQ or some other measure of intelligence and good political judgement.
Considering that many smart people believe in opposing ideologies, many of those being extreme and some which I think are really stupid, I can't believe that. I'd consider empathy and open-mindedness much more likely to correlate with support for good policies. Also people tend to disagree on what policies are good. People disagree on what good basic principles are, what the likely outcomes are, and whether those outcomes are good or not. There is disagreement even among smart people, even after the stupidity of much of the drug war.
IQ attempts to measure the speed of the brain, via a proxy designed by humans who probably on average think a bit highly of their own intelligence. No risk of cognitive bias there....
That said, in my mind short of violent action, I find it hard to see how having to serve more than two decades in prison is any kind of justice for any kind of non-violent crime. I also find that seeing the U.S. prison population at near 1% is rather depressing, and that most drugs probably shouldn't be criminalized and their use are more representative of other social issues at hand.
When black markets exist to the extent that the drug trade does, it usually indicates that the law is probably wrong. A black market for anything will always exist, but when you're starting to see it affect even 1% of the population as it does in this case, that should indicate that legally, the position should change in a way that reduces the need for such markets. However, time and time again governments try to push in the other direction, the U.S. revolution from England is in a large part based on this.
Bernie Madoff got 150 years.