Counties doesn't cut it either. It has to be a unit in which everyone agrees. As a practical matter, that has to be very small.
But let's look at this logically, even then, what county, in it's right mind would legalize hard drugs? I think one reason it should be kept at the state level is because if one county were to legalize it, it woudl bring down all the surrounding counties.
The only reason we would need communities smaller than counties is if our societies standards were grossly diverse. That is not the case. The case is that most of America agrees that hard drugs should be illegal.