Trouble is, people tend to dream up new, exotic ways of "getting high", some of which no drug company would touch. For example, I can't envision any drug company selling crack cooking kits.
As for allowing the government to get involved, look at how cigarettes and alcohol are being regulated right now: Every year brings yet another "sin tax" increase.
One thing's for sure, the current system isn't working. Not only is drug use and drug-related crime rampant in our own country, but it's made life pure hell for the citizens of other countries. Random highway stops and car searches by heavily-armed Federales are commonplace in Mexico, and the elected officials who aren't murdered outright are often offered a "lead or silver" ultimatum by local drug lords. Life has changed in many of the countries to our south, and much of the change as come as a consequence of our own nation's renewed efforts in the war on drugs.
Much more so when the less potent ways are also illegal---much like Prohibition boosted the populatity of liquor versus beer and wine.