It occurred to me that what the police do in The Wire, setting up a drug zone at the abandoned edge of the city where police are there but never arrest anyone for using or selling drugs, might actually work in real life. The police approach it to the drug dealers as follows: "You can sell and use anywhere within this 10 block radius, we will be here to ensure there is no violence but otherwise we will not arrest anyone. But if you try selling outside of this zone, your ass is hauled off to prison for life, you're seriously fucked. You sell drugs here and you're just fine; you sell drugs in our city among our citizens and you're finished."
Then you arrange social services and EMTs and other programs to help ensure people are safe, pass out condoms and free clean needles and all that, hook anyone who wants it up to recovery services or in-patient treatment, and generally just make a little drug city inside the city. This would be the epitome of treating drugs as a public and personal health problem rather than as a criminal problem. It would probably clean up the rest of the city from drug-related violence fairly quickly, and it would bring it more into the open where people can get help and where it can be recognized for what it is, a problem of health and of socioeconomics, not a criminal issue.
I can't see anything wrong with this except that the false (Christian) moralism of the public would oppose it, and also that some of the drug dealers and gangs would oppose it and refuse to participate.. so to this latter problem, you just crack down harder outside the zone and create a situation of incentives whereby it just makes more sense to deal inside the zone, since you can make even more money and there is no risk of violence or getting arrested. I don't think most drug users or drug dealers are really that invested in the criminal culture and lifestyle, and if given the choice they would largely prefer to operate within the law so long as they could still get their drugs and cash. Yes there is the strong element of will to power in the psychology of drug dealers, the gang lifestyle of course, and that isn't going to go away but it could be reduced to a significant degree by these kind of drug use zones. The drug dealers I used to know weren't hardcore gang banging will to power types like you see on the movies , they were just ordinary people who sometimes were forced to do extraordinary things (like use violence, beat someone up for a drug-related matter, posture themselves and arm with guns for protection and image, etc.). But a lot of that is just contingent stuff.
As to the first problem of people's false moralism, I don't really know how to fix that one.