A nice summary from Demidan at
boingboing.net that I pretty much agree with. Especially after having learned more about the US prison industry.
If you legalize drugs: You take money away from terrorists, lower the price, raise the quality, raise tax revenues, lower violent crime rates, take money out the CIA's pocket, fund recovery for those who want to quit, lower the number of crack hoes, lower the number of people in jail, you could grow marijuana for hemp paper and help green the planted one tree at a time, sell hemp seeds which are very high in protein, topple drug lords, stop drug wars, and many other things that are not so fun. Lots of positives and the only losers are people in law enforcement (less needed) and investors in privately owned prisons...