Sounds nice, if it weren't for the insatiable and destructive appetites of so many drug afficionados. Why did some heroine addicts on methadone maintenance (back at its inception, before they corrected it) use to hold the liquid methadone in their mouths until they got outside the clinic, and then—having spit it into cups— sell it on the street for...money...for what?
For heroine. You can't get properly stoned on methadone maintenance, which is a clue to why your neat market formulae do not apply to psychoactive substances. You are thinking much too rationally for the world of drugs and pleasure.
You do want to legalize all substances don't you? Maybe I'm a bit dense, but does anyone else have difficulty imagining, in this litigious society, that a pharmacist might be tempted to say NO to selling a suspiciously jittery person ANOTHER 8-ball of pharmaceutical cocaine? Or that said person will bat an eyelash before running to the nearest still-thriving dealer he knows who'll be glad to?
You're absolutely right about our litigious society and the potential for that jittery person to sue said pharmacist for refusing the sale. That is why we also need tort reform to accompany decriminalization. If we just fix one problem (by decriminalizing drugs) but not the others (politically correct judges and juries) we haven't accomplished anything. If we decriminalize drugs but don't fix the problems with our legal system people who support the status quo will treat decriminalization like California's so-called "deregulation" of the energy industry. They will say, "See we told you the free market doesn't work," when it was never a free market to begin with. California tried to have it both ways, deregulating one segment of the market but not the rest; this is crony capitalism, not the free enterprise capitalism our founders understood and embraced. Libertarianism really is an all or nothing approach; for a free society to work it has to have people who are willing to take all of the responsibility that comes with that freedom. Since the welfare state (created and supported by both Democrats and Republicans) has been such an integral part of our lives for the last 40 years it will take a lot of time for people to rediscover this truth and see the wisdom of our approach; it took me almost 10 years to see the GOP for what it really is and I prided myself on being part politically savvy. Someone who doesn't know or care much about political realities will probably take a lot longer.