Sure, a 'free market' for extremely addictive products. Get 'em hooked, raise the prices - then the government steps in and adds taxes. You still end up with people who steal/kill in order to finance their habits. As prices go up, the 'black market' would also grow, thus bringing the concerns you have about rat poison, et al, back into focus.
"People would have to set their own priorities."
They do that now. Don't need to legalize drugs for that to happen.
"we should not look to the law for the definitions of what is moral or even wise."
All laws are about legislating someone's morals. Anything that is legalized automatically becomes more accepted by society (abortion is a good example of that). I don't happen to believe this society needs anything else to bring it closer to falling apart, and legalizing drugs would do just that, in my view.
Do you look to the state for moral guidance?
I would say it's the duty of Free Men to provide moral guidance to the government if our system of self government is to flourish.
I just never saw in instituting a limited government, where the government had control over what we partake in. Perhaps those who get their moral compass from the state do.