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"The profit incentive would simply be moved to Corporations"

Exactly! Corporations that are licenced and forced to operate within narrowly defined guidelines. If they step out of line they lose their license and someone else gets to make the profits, marginal as they are. Again, the idea is to legalize and regulate the traffic to the degree that it wipes out the profit motive. I'll go a step further and suggest something else in addition to my first proposal.

From what I have learned from the history of drugs in society, it is that there are two extreme conditions that can lead to a majority of any given population ending up addicted to any given drug.

The first extreme condition arises from attempts to prohibit all drugs. This leads to extreme demand from a small percentage of the population that leads to very high prices and profits being realized by those who supply said demand. The profit incentive leads the suppliers to want to expand their markets, and it's off to the races.

The second extreme condition arises from oversupply of drugs, as happened with the "nickel gin" plague that hit England in the 18th century. Because gin was so plentiful and so cheap, a large percentage of the population became addicted.

So, getting back to my proposal, I have to amend my suggestion to include the idea of setting prices high enough to discourage addiction, while keeping them low enough to short-circuit the black market.

If they step out of line they lose their license

MMM... Like Phillip & Morris? Trust me, when your profit margins are in the billions, you have quite a bit of sway with the government.

The English gin story is interesting. The upperclass drank mainly whiskey at the time, they did nothing to curtail it's use.

I've proposed to Freepers that all drugs be licensed.

You would need a license to purchase and use any recreational drug (alcohol and tobacco included). Much the same as you need a license to operate a car.

To obtain a license, you would be required to have health insurance. This puts the health burden on the user, not the common citizen.

You would be required to read the latest literature regarding the known dangers of the drug and sign a release form. This puts the legal responsibility on the user.

All employers and health insurers of the user would be notified. Thus the financial burden is on the user. Employers would have to make their policy known for each type of drug before the user applies for a license though. The employer would have the right to continue the user's employment or not, based upon previously stated policy.

The license applicant would then pay some small administrative fee to process the application (like what is done for a drivers license). The benefit to the user is that he would be able to go to a licensed dealer, purchase the drugs for much less than the cost from an illegal dealer, with better quality, and without fear of prosecution.

The restrictions of the license may vary from drug to drug. Some of the harder drugs may restrict usage to personal residences only. Tobacco may have the fewest restrictions - just don't give it to minors.

Violation of the license would be a felony.

Why a license? Responsible users will have no problem with this. The burden of use will be all theirs. Problem users will be locked away for a long time. The illegal market then dries up.